T3 Insight

Ranking the nation’s largest MLSs and local Realtor associations, an update on new construction and inventory + the US discount brokerage model challenge

Articles in this Edition

In this edition of T3 Insight, T3 Sixty's latest monthly analysis of the residential real estate brokerage industry includes articles on Ranking the nation’s largest MLSs and local Realtor associations, an update on new construction and inventory + the US discount brokerage model challenge. Take a deep dive below.

Released February 28, 2023

An update on the relationship between new construction and low inventory

by: Dr. Paul Bishop

Breaking down the 2023 Organized Real Estate report

by: Paul Hagey

Why doesn’t the discount brokerage model catch on in the US?

by: Paul Hagey

What We're Reading

In addition to the articles, here are a few items we are reading from across the internet.

The pandemic-induced migration

Migration to quieter, more far-flung places has multiple downstream effects on them, both beneficial and challenging. In this article, the New York Times explores the impact on Maine, which saw a large influx of residents starting in mid-2020, which lowered the states average age, contributed to average home price increase of 60% from 2019 to 2022 and has brought life to many of the state’s sleepy towns. Similar areas across the U.S. are experiencing similar impacts of the Covid-induced migration. Questions remain whether this migration pattern will continue or whether the previous norm will return.

New York Times

In sell of Canadian operations and debt raise, OJO Labs secures $200M

OJO Labs, the operator of a national portal and referral network, announced that it had sold its Canadian operations, ojohome.ca, to the Royal Bank of Canada, and raised a debt round. Combined, the actions brought approximately $200 million to the company. The Austin, Texas-based company has made large, aggressive moves to become a major player in the residential real estate lead-generation and portal game. It acquired one of the nation’s most-visited real estate portals in Movoto in June 2020. It has raised approximately $134 million to date. Like many startups who have raised millions of dollars in recent years to revamp real estate, OJO Labs is looking to gain traction and a profitable model for its tech platform and real estate network. We’ll continue to monitor the company and others like it as they evolve.

OnlineMarketplaces

CREA turning its portal Realtor.ca into a standalone company

The Canadian Real Estate Association has announced plans to turn the real estate portal it owns, Realtor.ca, which had a reported 121 million users in 2022, into a standalone for-profit firm. The proposal will be discussed at the trade association’s annual general meeting in April. The potential spinoff of Realtor.ca from CREA echoes a similar move NAR made with Realtor.com back in the late 1990s. It operated under operator HomeStore, which went public in 1999 and in which NAR maintained a large equity stake. That stake has waned over the years as the site’s operator changed to Move and then to News Corp, which is now pursuing a sale of Realtor.com. NAR has lost a lot of control of the site. A national listing site offers many opportunities for an association, especially if it maintains control as the site grows and evolves in a separate company. Will be interesting to track how CREA manages this.

Real Estate Magazine

Are 3D printed homes the answer to housing affordability?

In this profile of 3D home printer Icon, which raised $185 million in February 2022, The New Yorker explores the promise and challenges of 3D homebuilding and its potential for improving housing affordability. 3D-printed homes remain expensive to build, but companies, such as homebuilder Lennar, which has invested in Icon, believe with scale they can become cheaper to build and more affordable for consumers. In addition, the technology can be applied to multifamily, which will bring much more supply than the current single-family applications.

The New Yorker

NAR membership hit record high of 1.58 million in 2022

NAR reported an historic member count in 2022 of 1.58 million, a 1.4% growth from 2021. The trade group has forecasted that the 2023 count will drop by approximately 7% to approximately 1.47 million. Real estate has always see-sawed with the market – in flush times, agents rush into the business and serve the increased number of buyers and sellers. In tighter times, the workforce contracts. The predominant independent contractor structure in the industry accommodates this fairly fluidly. The structure also contributes to a challenge of maintaining high service quality.

Inman

Inside the ongoing reckoning of tech’s startup model

As interest rates rise and money gets more expensive, the models some companies launched with or leaned into in recent years are collapsing under their own weight. Profitability has become all-important and the days of losing big money on a future bet of profits is all but gone. This New York Times article profiles the dilemma referencing companies grappling with the reality, including Zillow Group, Redfin and Opendoor.

New York Times

US home prices fell for fifth straight month in November

The S&P CoreLogic Case-Shiller US National Home Price Index shows that prices dropped 0.3% in November from the month before, representing five consecutive months of drops. Home prices have definitely come down in recent months, but as economics news early in 2023 appears bullish and with inflation potentially curbed, the housing market may stabilize as it heads into the spring selling season.

Offerpad raises $90M and cuts jobs

Like other iBuyers, Offerpad has hemmorhagged money as the market turned and it was stuck with inventory it had to sell at losses. The company recently raised $90 million in a private fundraising effort, which also came with an unspecified number of layoffs. More details of the raise, any adaptations to its model and the layoffs will be laid out on its fourth quarter 2022 earnings release.

Inman

Nation’s largest MLSs to launch consumer portal in April

CRMLS and Bright MLS, the nation’s two largest MLSs, are launching a consumer search portal, Nestfully, expected to launch on April 1. The two MLSs own the site under a joint venture, and REcolorado has signed on as a participant. At launch, the MLSs expect listings from over 240,000 brokers and agents to show up on the site. Other MLS participants are expected. The launch of Nestfully represents the ongoing effort by innovative MLSs to enhance collaborations and achieve the multiple benefits of scale. For more details on these collaborations and the reasons behind them read the 2023 Swanepoel Trends Report chapter, “The Future of MLS.”

Real Estate News

News Corp still discussing sale of Realtor.com operator Move

In its second quarter earnings report of its fiscal year released on February 9, News Corp disclosed dropping revenue, with its digital real estate division playing a key part, and plans to cut approximately 1,250 jobs. In addition, it said it still is pursuing a sale of Move, the operator of Realtor.com. A sale of operator of one of the nation’s most popular real estate sites in Realtor.com to CoStar Group, one of the named suitors in the potential sale, will play a big role in the evolution of online real estate in the U.S.

Inman