With So Much Data, Why Are Private Markets Eating The World?

July 2, 2025
  • Private Capital Use Is Surging On Wall Street And So Are Private Listings In Real Estate
  • Private Listings Are One Sided And A Pure Business Decision
  • Exclusiveness Of Availability Doesn’t Affirm Higher Value

I was reading Michael Batnick’s post, “The Relentless Ask ,” on his blog and listening to his podcast interview as well as borrowing a piece of its title for this post, “Private Markets Are Eating The World,” and I had this thought. Wealth management groups have benefited from the higher returns of alternative investments as the wealth gap expands. With the spike in mortgage rates over the past three and a half years, the endless supply of public capital has finally dried up, and private capital is emerging as a significant market force. The trade-off is that it provides higher risk with higher returns, but less transparency. We are seeing a parallel universe in the housing market, as the real estate brokerages battle for private listings over public listings continues to escalate. They mistakenly believe that they drive higher prices and are less of a hassle than complete market transparency.

Since this post dropped at 2 pm ET, the world around Compass has been busy. A Housing Note reader forwarded me an email from his local MLS (NWMLS) and a Compass announcement that they will not abide by CCP.

UPDATE: NWMLS Asks Court to Dismiss Compass’ Lawsuit

UPDATE2: Compass ‘has not and will not adhere’ to Clear Cooperation [Real Estate News]

There Seems To Be A Growing Premium On Access To Private Information

Every day that passes, we have infinitely more data to work with, yet there is a growing restriction on access. The economics of privacy is becoming more prevalent in society as the wealth gap expands. Those who do have access to private data are perceived to have the “inside track,” and a premium is paid for that access. Think about the explosion of AI and all the data they “steal” every day for their content. They are spending billions to scoop it up, enriching themselves in the process. At the same time, the average person cannot access most of that data themselves and is not being compensated for the online information they have created that is stolen.

Compass Started The Current Private Listings Brawl

I wrote about the Compass quest for expansion of private listings in depth back in February in The New Compass Plan Seems…2-Sided. Compass CEO Robert Reffkin immediately reached out, and we met in person at his office to discuss my thoughts. He was very cordial and shared numerous insights. One of his focus points that resonated with me was that their “private listings” are available to outside agents on their website. So, on a technicality, those listings are available to other agents outside their firm. However, to determine the specific location of a private listing on their website, the outside agent must contact a Compass agent or consult an outdated listing book in a physical office location, which requires additional steps. Those listings tend to skew towards the higher end of the market. This practice is already polluting the public inventory numbers.

Compass has become one of the larger players in each of its markets. I’ve long referred to the firm as “disrupters by capital.” It also makes sense that the shift in discussion of private listings to the mainstream came from a real estate brokerage firm whose founders are highly skilled Wall Street veterans, where private capital is booming.

Compass knows (well, everyone knows) that NAR is going to be marginalized in a few years, post-settlement. Compass is making its move to eliminate NAR’s Clear Cooperation Policy (CCP) through legal and public relations means, as it struggles for relevance in an industry that wants them neutered after years of bad behavior and out-sized power. Compass is also targeting firms that support the CCP, such as Windemere. Compass has an incentive to shift towards private listings to obtain commissions on both sides of the sale. They likely require a higher market share of two-sided deals to achieve long-term financial stability. Their public relations spokesman claims they never thought of that angle, which I find intellectually dishonest. Make no mistake that Compass is pushing private listings as a business decision, not as a transparency decision. 

As I’ve mentioned before, a private listing network is a vehicle that enables the listing agent and the firm to control the listing better and gain an edge in recruiting new agents. Sellers have more control over the marketing of their properties, at the expense of the buyers who are not fully informed about the listing by design. I suspect that most agents like the ability to have private listings because, as a business decision, not a transparency decision, it gives them more control under the guise of taking the seller’s side and discarding the buyer’s interests. However, hiding information from buyers seems unethical to me, and it also fails to promote transparency. Private listings are a business decision, and brokerages must realize that the playing field is no longer level.

Major Real Estate Brokerage Positions On Private Listings

NAR has very few friends in the real estate brokerage industry these days. The outcome of the Sitzer-Burnett case and other litigation is likely to motivate more MLS systems to continue to drop the requirement that agents who use their search engines be NAR members. That act will separate those MLS organizations from exposure to all the litigation in this matter. My wild guess is that nearly 1 million of the 1.5 million NAR members are inactive, or ‘ghost,’ members, and within a few years, they will stop subscribing because they never needed what NAR offers. That also means a lot less research and lobbying from NAR in the near future.

The real estate brokerage industry is hesitant about private listings, which may violate the CCP. Many agents want them, and agents are the clients of real estate brokerage firms. The challenge with private listings is that they invite future litigation against the real estate brokerage firms and the agents themselves. Real estate analysts on Wall Street have told me this. The fact is that many sellers don’t understand what an MLS is, let alone what a private listing is, and assume their listing will be exposed to many potential buyers. If they find out later on that only a couple of people saw the listing, that creates a legal liability for the agent and the brokerage firm. The same goes for the buy side of the private listing. Compass’s big push includes hiding “bad” data, such as days on market from buyers. Imagine a buyer who was unaware that a listing had been on the market for a year. They would have used that information during the price discovery stage to ensure they are paying a reasonable price, hence why Compass calls it “bad data.” 

Compass is the only firm that makes private listings the cornerstone of its business model. Howard Hannah is going in a similar direction, but their primary focus is to break CCP and stop NAR from dictating how brokerage firms manage their listings. They’re even exploring ways to abandon MLS systems to share their listings. They currently allow private listings but are focused on eradicating the CCP. Windemere and eXp don’t permit private listings, considering them “exclusionary.” Both Redfin and Zillow require that all listings be available on their platforms within 24 hours. Most other real estate firms allow private listings, but do not make it their central business strategy.

Final Thoughts

Compass is leading the charge for private listings to ensure its firm’s survival as the center of the real estate ecosystem. Compass is against NAR and Zillow listing policies. They have had access to a large amount of capital and have utilized it to become a significant player in the housing ecosystem through acquisitions and leveraging their legal expertise. They are not a trusted competitor in the industry, and their unstated, but likely, goal has been to establish a central clearinghouse of data that will draw agents in their direction. They are striving to become the de facto national MLS for private listings in order to recruit agents and likely want to enable more two-sided commissions despite denying it.

For those opposed to the limited transparency that Compass represents, it is interesting to see Zillow portrayed as the “good” guy, when the portal has effectively taken all the data from real estate brokerages, only to repackage it and sell it back to them. The shift in power occurred when Zillow won the consumer over, while the brokerage industry sat on its hands, relinquishing its gatekeeper status. The Compass view on private listings aligns with its business strategy of centralized information; however, most real estate brokerage firms provide only tacit adoption of private listings, largely because some of their agents (i.e., their clients) want them. However, real estate brokerages have significantly more to lose here than individual agents, given the legal exposure they incur.

Being pro-private listing implies that one is pro-CCP or pro-NAR, which is false. NAR is definitely on its own these days, twisting in the wind after abusing its leadership standing with scandals and a lack of ethics for decades. I suspect NAR will continue to weaken as their membership plummets and more and more brokerages ignore their decrees in the coming years.

In the home buying and selling market, the definition of market value relies on the premise of “a fully informed buyer and a fully informed seller to arrive at an agreed-upon sales price. Private listings overlook the buy side, obscuring the transparency required for both buyers and sellers to be fully informed. I am confident that the industry will eventually figure out a path to resolving this conflict. The resolution of this conflict is still a few years away.

The Actual Final Thought – I’m not saying we’re a society on the verge of collapse but…

[Podcast] What It Means With Jonathan Miller

The latest episode [Oh, Canada] is just a click away on the prior link or the image below. The podcast feed can be found below for the three platforms we use:

Apple (Douglas Elliman feed) Soundcloud  Youtube

Click on the image for a recording of the July 1 podcast.

[CRE] Lessons Learned: 5 Years After The Pandemic

I’m looking forward to participating in this one – it should be a great discussion, especially with my friend Jonathan Schein as moderator.

Did you miss the previous Housing Notes?

June 30, 2025

Suspension Of Price Discovery Feels Like Waiting For The Floor To Dry

Image: Redditt

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