In Focus: MLSs face 'staggering and energizing' changes
NorthstarMLS CEO Tim Dain offers his tech-forward view of the future, which includes transparency, consolidation and richer listings content.
MLSs and associations are the backbone of residential real estate, from small but innovative players to regional powerhouses. How are these organizations supporting their members and moving forward in a time of change? We asked their leaders to share their perspectives.
It's been just a year since Tim Dain took on the top leadership role at NorthstarMLS, but a lot has happened in that time.
Consumers and real estate professionals have been confronted with a shifting market that continues to affect their aspirations and livelihoods, and industry leaders have been tasked with making tough calls for their businesses.
Across the real estate spectrum, and in the MLS arena in particular, Dain sees this as a time of "vast and varied change."
He shared his thoughts about where the industry is going, how NorthstarMLS leverages technology to benefit its subscribers and their clients, and why it's chosen to embrace a more consolidated, cooperative MLS landscape.
NorthstarMLS was founded in 1987 as the Regional MLS of Minnesota. We now serve three shareholder and eight client REALTOR® Associations, supporting more than 22,600 subscribers across Minnesota and into Western Wisconsin, and soon into Eastern North Dakota.
As an MLS leader, what are you most excited about right now?
What's got my attention is the vast and varied amount of change. Whether driven by lawsuits, technology or ingenuity, the types and number of changes being made to and by MLSs is staggering and energizing. For example:
1. It feels like we're just scratching the surface of machine automation/assistance (Machine Learning, Artificial Intelligence, etc.). It's an area that is moving quickly and feels like "right-now" — not years from now.
2. Black Knight, CoreLogic and Flex are each launching significant enhancements to their front-end MLS solutions, and Perchwell is still getting started. These primary front-end solutions are evolving quickly.
3. The concept of MLSs as service providers is starting to gain traction. Motivated by ingenuity or fear, it doesn't really matter. Their success will be dependent on building competitive technology.
What is one of Northstar's signature achievements?
As consumers have broadened their search boundaries in recent years, we realized there was an opportunity to cooperate with neighboring markets and beyond, so we created a shared listings database, called Common Data Platform (CDP). MLSs continue to manage their listing data and choice of front end while using our state-of-the-art input/maintenance system to expand the exposure of their clients' listings within CDP.
What makes your market unique?
1. In Minnesota, we have an abundance of lakefront properties that require non-typical data points, such as lake lifts (essentially lakeside elevators that move up and down a hillside on a track), water clarity, etc. Consumers in our region also value specific information about farmland and hunting acreage.
2. Our members cross three state lines, doing business in Wisconsin, Iowa, and N. Dakota.
3. We build some of our own technology (Listing Input and Maintenance, Roster, List Assist), which means we (not vendors) maintain the primary database. That makes it easier for other associations and MLSs to partner with or join us.
4. Providing services to multiple marketplaces (urban, suburban, rural, resort and lakefront) isn't unique, but it's a challenge shared by only a handful of MLSs.
What is the listings environment like right now in your area?
We're still in a historically competitive market. Many homes get multiple offers and contingencies are often waived. The average homes sell for about 1.5% above list price and go pending in around 15 days. Our most competitive price range homes can sell for about 6% above list price and go pending in around 7 days. It's also worth noting that new listings are trending down by 15-18% year-over-year.
What is your subscribers' greatest challenge, and what are you doing to meet it?
In our 2022 Subscriber Survey, a common pain point was the time it takes for listing input/updates to get to the front-ends. We took that feedback to heart and made great strides to speed it up, cutting the wait by more than half. We continue to whittle that time down and are also working on launching real-time listing input with FlexMLS later this year.
One of our largest challenges is addressing mapping differences based on differing standards within our listing system. For example, urban areas use the municipality name as the "city," but rural areas use the postal name as the "city." There are also 200+ lakes named "Mud Lake" in Minnesota. It can be a challenge to ensure people are viewing homes on the "right" Mud Lake. We are adding a RESO-approved field and creating more specific fields within our listing database to address these issues that better reflect local preferences.
Lastly, a good problem to have: We've introduced a number of new tools and expanded listing data this year, which has kept us busy helping subscribers learn how to use these new benefits and put them to work for their clients.
How do you think the residential real estate industry will be different in the next 5-10 years?
Looking at the industry through the MLS lens, two things stand out to me: Consumers will experience more transparency, and real estate professionals will experience consolidation with their MLSs.
Consumer transparency will take a few different forms. First, enhanced video and 3D touring capabilities will continue to enrich listings, giving consumers new and better ways to experience properties remotely and connect with listing agents. Second, listings will be more robust as new data becomes available. We've seen this happen with tax data in recent years, and we're at the forefront of adding green building data and lake/waterway information now. Lastly, consumers will have access to listing data from multiple regions, spurred by the pandemic and the job flexibility that came with it. I should also give an honorable mention to the unknown ways consumers will become immersed in AI that more easily identifies homes that meet their criteria.
To deal with these trends, we will see MLS consolidation. Real estate professionals are going to require more robust tools that offer the technologies and reach consumers expect. Smaller MLSs are going to find it more difficult to support these consumer demands and will want to look for ways to partner or merge with other MLSs who can better meet these requirements.
At NorthstarMLS, we saw the writing on the wall early on and put CDP in place to make this happen. Our territory now includes Minnesota and Western Wisconsin, and we soon will be adding Eastern North Dakota as Fargo joins us later this year.