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Three and a half many years in the past, TV skilled considered one of its best cliffhangers.
The yr was 1990 and Star Trek: The Subsequent Technology was a juggernaut. On the helm of the present was Patrick Stewart’s Captain Picard, a pillar of sound management and ethical rectitude.
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Within the present’s third season finale, the zombie-like Borg kidnapped Picard and turned him into considered one of their very own. The finale ends with Picard as a Borg telling his now-former crew that they, too, shall be become automatons. Picard’s right-hand man offers the order to destroy the Borg, then the credit roll.
Viewers needed to wait months to search out out if Picard or any of the Trek forged would survive (Spoiler: They did).
The second was revolutionary within the pre-streaming period, and many years later, it’s nonetheless described as one of the best cliffhanger in TV historical past.
However it’s price mentioning right here as a result of it affords a form of metaphor for what occurred to the actual property trade in 2024. Because of authorized motion, authorities stress, a tough market and different forces, actual property has confronted one of many roughest and most disruptive years in dwelling reminiscence.
But additionally, like an action-packed TV present, it’s probably not clear proper now the place the story is headed. Will patrons abandon brokers? Will the federal government deliver down the hammer? Will lawsuits destroy the established order? Is resistance futile?
Inman has in latest weeks got down to reply many of those questions in our ongoing year-end protection. But additionally, many questions merely lack solutions. The previous 12 months have been stuffed with tumult, however what that tumult means or the place it leads continues to be to be decided.
In different phrases, actual property finds itself in a situation not not like the one in that outdated Star Trek finale. As 2024 attracts to an in depth, the trade has ended up with a cliffhanger.
So with that in thoughts, listed here are the largest tales that dominated 2024 — and which nonetheless have us on the sting of our seats.
Fee litigation dominated
When the whole lot is alleged and executed, there was actually only one story that eclipsed all others in 2024: antitrust fee litigation. You most likely know the broad strokes, however to refresh: homesellers lately filed lawsuits accusing trade gamers of holding prices excessive, and a jury sided with these homesellers final yr.
However the story took a flip in 2024. Most notably, NAR settled its case within the homeseller lawsuits in March, agreeing to pay $418 million and make numerous coverage adjustments. These rule adjustments went into impact in August, and NAR’s settlement notched its closing approval final month. The NAR settlement lined smaller brokerages, with numerous bigger brokerages settling over the course of the yr.
So, case closed proper?
Mistaken.
Certainly, the fee lawsuits might characterize the largest cliffhanger actual property has ever confronted. Proper now, excellent questions stay over the destiny of appeals and the longer-term response of each regulators and the general public.
Russ Cofano
Leaders who spoke to Inman agreed that there are numerous extra chapters to this story. For instance, Russ Cofano — an trade veteran and CEO of Collabra Know-how — described 2024 as a “point of inflection for the industry.”
“I think it will be looked at historically as being a significant catalyst year in terms of changing business practices for the industry,” he stated. “I think we’re going to see some changes that actually come about in the years to come.”
Rob Hahn
Actual property strategist Rob Hahn provided an identical interpretation, describing 2024 as “the year that changed everything” — however including that it was “the introduction of the first chapter” of actual property’s subsequent act.
“I would say this is like the first chapter of the new book,” Hahn added.
These characterizations had been widespread amongst leaders who spoke to Inman. And so the purpose is to not reply each remaining query, however slightly to notice that the questions stay. We’re in a two-part episode (at the least) and we have now to attend for the following season for the conclusion.
Catch up:
Consolidation looms
Fee lawsuits characterize actual property’s largest cliffhanger heading out of 2024, however there are many others — and Compass epitomizes one of many largest. A part of that has to do with CEO Robert Reffkin main the cost to finish NAR’s Clear Cooperation Coverage (extra on that under).
This brings up mainly two points. The primary is solely that Compass had a very good yr. Certainly, in conversations with numerous trade executives for this story, Compass persistently got here up greater than every other brokerage. And so one of many issues to look at for in 2025 is how nicely Compass can keep its successful streak.
Jason Aleem
The actual property trade has an extended strategy to go earlier than it consolidates to the identical extent because the meals trade. However time and again, consolidation got here up in conversations as each a theme of 2024 and one thing to look at for in 2025.
“I do think that there will be more and more consolidation,” Jason Aleem, Redfin’s chief of actual property providers, stated in a dialog earlier this month.
“I think we’re going to see a lot of consolidation, a lot of opportunities, a lot of companies being sold or coming together,” Chris Heller, president of OJO/Movoto, instructed Inman final month.
Howard “Hoby” Hanna III
“We’re very aggressive and bullish right now in terms of M&A,” Hoby Hanna, CEO of Howard Hanna, stated.
That is however a sampling of comparable commentary Inman collected recently. And the fundamental gist of the argument is that the disruption of 2024 might give an edge to firms with bigger scale. However it stays to be seen who shall be acquired — or, if you’ll, assimilated — by whom.
Catch up:
The patron query
One other large query proper now has to do with shoppers’ subsequent strikes.
Up to now, polling from Inman Intel suggests that the majority patrons aren’t negotiating low charges with their brokers and that the majority sellers aren’t averse to paying patrons’ brokers. So, the established order persists — one thing that’s itself a serious takeaway from 2024.
So, cliffhanger. To be continued.
Ben Bear
In conversations with Inman, some leaders predicted that the long run might look comparatively much like the current, however there are different attainable permutations as nicely. One, floated by TurboHome CEO Ben Bear, is that the NAR settlement might drive patrons to low cost or flat-fee brokers.
“That thesis is proving true,” Bear instructed Inman. “So, we’ve launched in the Bay Area and are rolling out in Texas and Washington State as well. And have done about $18 million in transactions in two months.”
It’s price noting that flat-fee brokerages had a tough run in 2024. As an example, once-buzzy Homie has shrunk and is suing NAR for primarily dooming it. Certainly, the struggles of flat-fee brokerages and different techie housing ideas (see additionally: iBuying) was a big subplot of 2024. However Bear at the least argued to Inman that the NAR settlement will elevate client consciousness of how brokers receives a commission, probably pushing individuals to strive newer fashions.
That’s only one idea, although Bear was not the one particular person to deliver this up. For instance, when Inman requested Hahn if fee litigation would possibly give rise to low cost brokerages, he replied, “Absolutely.” Hahn — who not like Bear doesn’t run a discounter — additionally speculated that conventional brokerages would possibly finally undertake traits historically related to low cost brokerages.
It’s additionally price noting right here that 2024 is proving to be one of many worst years for dwelling gross sales in many years, and that mortgage charges haven’t fallen in the way in which many had hoped. So considered one of 2024’s largest cliffhangers is how quite a few transferring components — charges, stock, litigation, new fashions and extra — would possibly reshape client habits.
Catch up:
The Nationwide Affiliation of Realtors’ tough journey
Although NAR’s fee litigation consumed trade consideration in 2024, a slew of different points associated to the commerce group additionally made headlines — and stay unresolved. Arguably the largest is NAR’s battle with the DOJ, which the commerce group desires the Supreme Court docket to adjudicate. Few leaders had any thought the place that story goes subsequent.
“I don’t think anybody really knows where the DOJ’s head is at,” Cofano, capturing a standard sentiment, stated. “And if they say that they do, I think they’re just blowing smoke.”
It’s additionally essential to do not forget that the DOJ is a fair larger wildcard than common as a result of Donald Trump received November’s presidential election and can thus appoint new management on the company. Most leaders who spoke to Inman didn’t assume Trump’s victory would totally eradicate the DOJ’s curiosity in the actual property trade. However many did speculate that Trump’s win might alter the NAR-DOJ battle.
Other than the DOJ, there’s additionally a simmering battle proper now over NAR’s Clear Cooperation Coverage, which requires brokers to place their listings into an NAR-affiliated MLS. This subject sharply divided leaders in 2024. However to date, NAR has not taken any motion, which means the rule’s subsequent act received’t come till subsequent yr.
Lastly, NAR has confronted a gradual stream of criticism in 2024 for numerous governance points. This story really started with scandals in 2023. These scandals finally led to present NAR President Kevin Sears moving into his function in January . Sears has spent 2024 touring the U.S. to reassure members and break down the group’s stand on issues like fee litigation. Sears seems to have steadied the ship considerably, however NAR has nonetheless confronted rising scrutiny recently over points corresponding to funds and spending.
Amy Lessinger
All of those points make it appear to be 2024 put NAR on the ropes, and lots of who spoke to Inman imagine the stage is now set for change.
“Undoubtedly, NAR is at a crossroads,” Amy Lessinger, president of RE/MAX, instructed Inman. “They are the largest trade organization in the U.S. that has advocated for property rights and supporting real estate professionals. And I think that’s still an important piece of the value they provide. But I think the scrutiny they’ve faced in recent years does highlight the need for meaningful evolution.”
That evolution is but to come back into focus. And that signifies that, like so many different issues in actual property, NAR is ending 2024 on a cliffhanger.
Catch up:
E mail Jim Dalrymple II
