MLSs: To Consolidate or Collaborate? Navigating the Future of Real Estate Data

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As the real estate landscape evolves, the debate over whether multiple listing services (MLSs) should consolidate or collaborate intensifies. With over 500 MLSs across the U.S., real estate professionals and organizations face mounting pressure to streamline operations and reduce redundancy. But in a climate shaped by recent National Association of Realtors (NAR) settlement changes, a new trend is emerging: embracing data sharing while maintaining individual MLS identities.

The Case for Data Sharing

In the quest for efficiency, data sharing has become a compelling alternative to full-scale consolidation. Daniel Jones, CEO of the North Carolina Regional MLS (NCRMLS), highlights the benefits of this cooperative approach. “Consolidation often comes with significant sacrifices,” Jones explains, noting potential job losses and governance challenges. Instead, NCRMLS’s “cooperative wholesale” model provides data integrity across regions without forcing MLSs to merge platforms. This model allows MLSs to retain their unique identities while enhancing regional data access.

Evolving Motivations

The rationale behind data sharing has shifted from merely avoiding consolidation to leveraging broader data sets. Clint Skutchan, Senior Vice President of Organized Real Estate at T3 Sixty, describes this as an "expansion-based opportunity." For example, in June, BeachesMLS in South Florida established data sharing agreements with both the California Regional MLS and BrightMLS. Dionna Hall, CEO of Broward, Palm Beach & St. Lucie Realtors, which operates BeachesMLS, underscores the value of such collaborations. “Our extensive data share enhances local market responsiveness while allowing us to integrate neighboring specialized data, ultimately benefiting consumers,” Hall says.

Balancing Competition and Control

As of mid-2024, there are 535 MLSs in the U.S., a notable decrease from over 800 in 2016, though consolidation has slowed. Skutchan attributes this slowdown to a desire among MLS members to maintain local control and limit competition. “In resort communities, for instance, there’s a concern that broad data sharing could invite excessive external competition,” he explains. This perception of control loss drives many smaller MLSs to prefer data sharing over consolidation.

Challenges of Consolidation

Consolidating MLSs remains a complex and contentious process. Patrick LaJeunesse, Chief Data Officer at NCRMLS, points out the inherent challenges: “Consolidation means someone wins and someone loses.” The difficulty of achieving consensus and the potential for financial and operational upheaval make consolidation a less attractive option for many.

Recent industry shifts, including potential membership declines due to the NAR settlement changes, have heightened discussions around consolidation. Skutchan notes that financial stability is increasingly crucial as MLSs grapple with changing subscriber dynamics.

Looking Ahead

The trend toward data sharing is likely to persist, given its ability to integrate data without requiring MLSs to abandon their systems or platforms. While consolidation will continue, it faces significant hurdles, particularly in maintaining transparency and equitable outcomes for all stakeholders.

In a rapidly evolving real estate market, the future of MLSs may well hinge on balancing the benefits of broader data access with the desire for local control. As technology advances, finding the sweet spot between collaboration and consolidation will be key to navigating the future of real estate data management.