Bluegrass Realtors' chief talks court case and housing affordability to Lexington Rotarians

The CEO of the Bluegrass Realtors Association says the class action court case involving agent compensation is a major shift in a 100-year-old process. Richard Gibbons spoke to Lexington Rotarians Thursday. He said part of the ruling changed how a realtor is paid, but not a limitation on how much a realtor can charge. Gibbons says realtor commission is not a major driving factor in the price of housing today.

“Home prices are driven by supply and demand. Demand is high because of generational trends and the impact of COVID on how we live our lives. And inventory is low because of the lost decade of new home building and sellers are unwilling to sell because they are locked into historically low interest rates,” said Gibbons.

Gibbons spent some time dissecting the NAR court case. He said compensation with agents continues to be negotiable and provides more avenues for compensation. Responding to a question about housing prices and sustainability, Gibbons talked about affordability.

“Affordable housing is a tough problem. You kind of have people on both sides of the fence. You have one side would love to build affordable housing but then the other side is not in my back yard. You know everybody wants affordable housing, they just don’t want it here,” said Gibbons.

Gibbons noted it’s a misconception that realtor commissions have artificially inflated home prices. He added there’s been a 47% increase in the median sale price since 2020, well above the often sited 6% realtors’ commission fee.

Gibbons said complexity in buying a home continues to be a factor when calling upon realtors for services. The Bluegrass Realtor Association represents over 4000 members in some 30 Kentucky counties.

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