The Oppenheim Group founder said the industry is asking the wrong questions about consolidation. What he is concerned about is not the number of people, but the policy power that comes with it.
Jason Oppenheim doesn’t lose sleep worrying about the wave of mergers reshaping the securities industry. What he is concerned about is what happens next.
“The number of employees is not the area of concern,” Oppenheim said in an interview with Inman ahead of Inman Luxury Connect in San Diego. “Their weight in shaping policy is more of a concern because they end up shaping policy to advance their own interests at the expense of other brokers.”
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Mr. Oppenheim, who heads the Oppenheim Group, which has offices in Newport Beach, San Diego and Los Angeles, said he has been following the integration cycle primarily from the outside. He said luxury brokerages are shielded from the competitive pressures felt by most independent brokerages. However, he became more focused on downstream policy impacts, particularly those related to Compass.
“I think the danger comes when things become anti-competitive,” he says. “Compass is consolidating to increase influence and shape policy, and I think the industry needs to consider that carefully.”
Its policy concerns center on Compass’ private monopoly program, which allows listings to circulate within the Compass network before being posted on the MLS. Mr. Oppenheim criticized that strategy and said his views had changed little.
“It’s really only suitable for one.” [percent] “Compass sells policies to 2% of sellers in very specific circumstances, whereas Compass sells them to nearly 100% of sellers. I don’t think agents should be pushing policies on sellers when they likely won’t be in their best interests, and that’s what’s happening,” he said. The vast majority of sellers are offered policies that are in the interest of the agent and the agent’s broker, but not the seller. ”
He added that the program appears to have limited practical effectiveness. Oppenheim said he believes about 97 percent of Compass’ listings, which began as private exclusives, will eventually make it into MLS. “Obviously, the only function is as a way to get a list,” he said.
In his view, the risks are higher than the listing risks. Oppenheim said a logical consequence of Compass’ strategy to strengthen its market share while managing a private inventory network could ultimately require buyers to work with a Compass agent to access Compass listings.
“I don’t understand why there’s not a class action lawsuit,” he said.
Zillow filed a lawsuit last week against Chicago-area MLS over listing access, and Oppenheim sees this move as a direct response to the same move. He described the situation as a “race to the bottom,” with portals and big brokerages competing for control of inventory, ultimately harming both buyers and sellers.
‘It was a brutal situation’: LA luxury goods stall as other markets move
Apart from the policy debate, Oppenheim’s spring market report is mixed. Newport Beach and San Diego are said to be active. Los Angeles is different.
He said sales above $5.3 million, which is the threshold for the city’s measure ULA transfer tax, known as Los Angeles’ condominium tax, have remained at fewer than 30 transactions a month for most of the past year.
“It used to be 60 to 70 cases a month,” Oppenheim added. “It was brutal.”
Oppenheim wants discussion in Connect
At Inman Connect San Diego, Oppenheim said he would like to revisit the debate he started last year, a live debate over private monopolies, and ideally host a debate with Compass representatives willing to defend the policy.
“I’m a little obsessed with that argument against private exclusives,” he said. “I would love to have a discussion with anyone at Compass who is willing to defend private monopoly.”
He also pushed back on what he called the industry’s obsession with AI and technology, saying this argument is beyond reality, at least when it comes to luxury real estate.
“I don’t think it’s going to affect my market that much. I don’t think it’s going to affect me that much,” he said. “All these new brokerages are trying to pretend it’s very important, but it’s really not.” He argued that agents are insulated from eviction in a different way than most white-collar workers because of the physical, relationship-based nature of their work. Technology can “work around limitations,” he says, but he wants the industry to be honest about its limitations.
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