The battle over private listings just escalated

Lines are being drawn

Well, as expected, the Fed made its decision today. 

And, as promised, I give you a full breakdown of the Fed’s decision, all the fallout from the meeting, and what it means for our industry in today’s edition.

But the Fed isn’t the only one making headlines today. 

In our second story, we examine a major development in the battle over private listings. Four of the nation's largest brokerages have joined forces to launch an "Open Real Estate" initiative, a clear shot across the bow of Compass and its vision for the industry's future.

If the initiative gains traction, it could fundamentally reshape how the industry operates. But that's a big if.

The battle lines are being drawn.

- David

The Fed holds interest rates steady

The Federal Open Market Committee (FOMC) voted 10-2 on Wednesday to keep the federal funds rate at 3.75% to 4%, according to Real Estate News and Redfin.  

Here are the key points about the Fed’s decision:

• A December hike looks likely: The Fed is widely expected to raise rates at its Dec. 9 meeting if upcoming data comes in as expected. After the announcement, CME Group’s FedWatch tool put the odds of a quarter-point hike at 84.6%, up from 78.3% the day before.

• Two members wanted a hike now: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, both favoring an immediate 25-basis-point increase. Cook’s dissent was a surprise, since she is generally viewed as a dove.

• Inflation remains the main concern: Consumer prices rose 3.7% year over year in September. The Fed is waiting to see how its September rate hike, its first since July 2023, affects inflation before acting again.

• Warsh says the Fed isn’t done: Chair Kevin Warsh said the Fed hasn’t yet reached price stability and wants more data before its next move. Investors are betting on two or three more hikes over the next six to eight months, more than the Fed has projected.

• Mortgage rates stay elevated: The 30-year fixed rate ticked up to 7.35% after the announcement. Economists say homebuyers should expect continued rate volatility in the months ahead.

• Fed meetings will change: Starting in fall 2027, one of the Fed’s eight annual meetings will be reserved for broad strategy discussion rather than a rate vote. In 2028, that will increase to two meetings.

My take

A rate hike in December looks likely, so get your buyer clients ready now. Don’t wait for the Fed to rescue them. Mortgage rates can still dip even when inflation is rising and the Fed is hiking, but those dips may be brief. Be sure you and your buyers know what they can afford at different rates, and that they’re pre-approved, not just prequalified. To understand the difference, scroll down to today’s Foundation Plans.

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The launch of the “Open Real Estate” initiative 

Four of the country’s largest residential brokerage groups have joined forces to change how property listings are shared. 

On October 26, AGNT (parent of eXp Realty and NextHome), HomeServices of America, Keller Williams and Real REMAX Group launched Open Real Estate. It’s a national initiative to make listings more accessible across brokerages, MLSs, and real estate portals, and it arrives as the fight over private listings heats up.

Here’s what to know:

• 7 brokerages are on board so far. The four founding members are joined by three participating brokerages: Brown Harris Stevens, Lamacchia Realty and Samson Properties. Other brokerages are being invited to join at no cost.

• One entry, many destinations. Agents and brokerages would enter a listing once using standardized data fields. It would then be shared with participating members and sent to local MLSs, home search sites, appraisers, and data services at the same time.

• It works alongside MLSs, not against them. The founders call MLSs essential for setting local listing rules. Open Real Estate isn’t another consumer search portal; it’s shared infrastructure so existing platforms can exchange listing data.

• 4 founding principles anchor the effort. They are expanding buyer opportunity, empowering informed seller decisions, protecting data integrity and promoting fair competition.

• A response to the private listing debate. An accompanying open letter warns that privately marketed homes can hide inventory from buyers and shrink sellers’ exposure. The letter never names Compass, but it reframes “seller choice” around informed decisions rather than a one-size-fits-all approach.

• Key details are still unknown. No launch date, governance structure or list of participating MLSs and portals has been announced. It’s also unclear how private listings will be handled.

My take

When four brokerage giants that usually compete for the same agents link arms, it’s worth asking who they’re lining up against. Compass is never mentioned by name, but it’s hard to read this as anything other than a shot across its bow. The clever part is the framing. Rather than fighting Compass on “seller choice,” Open Real Estate claims that argument for itself: sellers can’t make informed decisions without understanding what they sacrifice by keeping listings off the open market. And by positioning itself as a partner to MLSs rather than a rival, the coalition casts itself as a defender of transparency. But issuing a letter and announcing principles is easy. Getting competitors to agree on governance, data rules and private listings is another matter. It’s too early to say whether Open Real Estate will fundamentally change the industry. For now, one thing is clear: The battle over who controls listing data just got a lot more interesting.

Markets where prices are falling the fastest

Asking prices are falling across much of the country, and some of the nation’s largest housing markets are seeing especially steep declines. 

According to Realtor.com, the national median listing price fell 1.4% from a year earlier to $419,250, the 11th straight month of year-over-year declines. 

Sellers are adjusting their expectations: 20.8% of active listings had a price cut in September, the highest share for that month since 2018. Meanwhile, inventory rose 5.4% to more than 1.16 million homes, bringing supply within about 9% of pre-pandemic levels, while the number of homes under contract dropped 4.1%. 

Here are the markets where home prices are falling the fastest:

1. Austin, TX: -9.8%

2. Memphis, TN: -8.7%

3. Tampa, FL: -6.6%

4. San Diego, CA: -6.3%

5. Los Angeles, CA: -5.9%

6. Denver, CO: -4.9%

7. Phoenix, AZ: -4.8%

8. St. Louis, MO: -4.7%

9. Washington, D.C.: -4.6%

10. Providence, RI: -4.2%

My take

This isn’t a crash; it’s a correction, and it’s hitting hardest where prices ran hottest. Pandemic boomtowns like Austin, Denver, and Phoenix drew a flood of buyers when remote work took off, and now those markets are giving back some of those gains as demand cools. Nationally, a 1.4% dip is modest, but the shift in leverage is real: more homes, more price cuts, and fewer buyers signing contracts. For anyone who felt priced out a few years ago, the window may finally be cracking open, though in pricey metros like Los Angeles and San Diego, “cheaper” still means very expensive. The biggest hurdle is getting buyers off the sidelines.

Schematics

The news that just missed the cut

• Instagram is launching long-form video: here’s how agents can use it

• The little-known real estate business riding high on AI

• Home buying in SoCal has slowed to a pace even worse than during ‘08

• Ranked: the best home mortgage lenders

• What to do when your listing isn’t selling

Foundation Plans

Advice from David to win the day

Even though buyers have a lot of leverage right now, so many of them are sitting on the sidelines. The fact that mortgage rates have surged past 7% has spooked a lot of them. As agents, it is our job to help homebuyers overcome these challenges, both financial and psychological. 

So, today, we are continuing in our series on helping buyers and agents navigate the current market conditions. The goal of the series is to set up both agents and buyers for success to quickly and smoothly close deals. You can read Parts 1 and 2 in our series here and here.

Before we get going, I need to share three preliminary ideas with you.

1.  Don’t wait for the Fed to rescue your buyers – It is going to raise interest rates in December, in all likelihood. Yet, mortgage rates can fall even when inflation is rising, and the Fed raises rates. But those dips may be brief. So, make sure your buyers are pre-approved, understand what they can afford at different rates, and have a lender ready who can move quickly when an opportunity appears. And don't build your sales pitch around the return of 6% mortgages. Focus on what can make a deal work today: price reductions, seller concessions, and rate buydowns, especially from builders eager to move inventory.

2. Make sure your clients are pre-approved, not just pre-qualified – Here’s the difference: pre-qualification is just a basic overview of a borrower’s ability to get a loan. You provide a mortgage lender with information—income, assets, debts, and credit—but you don’t need to produce any paperwork to back it up. In return, you’ll get a rough estimate of what size loan your client can afford. However, it’s not a guarantee that they’ll get approved for the loan. 

By contrast, pre-approval is an in-depth process that involves a lender running a credit check and verifying income and assets. Then an underwriter does a preliminary review of your client’s financial portfolio. If all goes well, the underwriter issues a letter of pre-approval, a written commitment for financing up to a certain loan amount. Sellers typically will accept offers only from pre-approved buyers.

3. Don’t change jobs or apply for new lines of credit before a purchase – If your clients do these things right before purchasing a home, that will hurt their chances with mortgage lenders. Applying for multiple lines of credit can make a mortgage lender think that your clients are desperate for money. The lender might change the mortgage terms or even deny the mortgage altogether, even if your client has a closing date on the books. Changing jobs while under contract on a property can create a big issue in the eyes of an underwriter. Mortgage lenders like to see at least two years of consistent income history when pre-approving a loan.

Coming up next Wednesday: I’ll give you some counsel and talking points to help you explain today’s mortgage landscape to clients and give them some perspective. Until then, use these three steps to get yourself and your buyers ready.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a wonderful week

We’ll see you back here on Friday!

- David