‘Unfiltered’: Off-MLS trend is taking the industry ‘backwards’ 

Editor's note: The Real Estate Insiders Unfiltered podcast explores the people and forces that shape the real estate industry. Check out our top takeaways and watch the latest episode from NextHome co-CEOs James Dwiggins and Keith Robinson.

The views, thoughts and opinions expressed in the Real Estate Insiders podcast belong solely to the podcast creators and guests.

On this episode of Real Estate Insiders Unfiltered, real estate analytics expert Mike Simonsen shares his thoughts on how economic uncertainty may be shaping the sluggish housing market.

The founder and president of Altos Research said listings volume is growing "for the first time in years," which he attributes in part to homeowners who are done waiting for the perfect moment to sell — and fear the situation will get worse as time marches on.

Simonsen, whose work involves closely tracking housing data, also dipped into the ongoing debate about private listings, which he believes are "worse for the consumer."

"It looks absolutely like we're going backwards," he said.

A 'weaker' sales strategy: After months of anticipation, the National Association of Realtors decided in March to keep its controversial Clear Cooperation Policy but added a "delayed marketing" option. While brokerages like Compass and KW GO believe private listings and office exclusives offer sellers more choice, some studies have found listings withheld from the MLS tend to take longer to sell — and often sell for less.

"It's worse for everybody in the space except for the guy who's got the listings he's not showing anybody else," Simonsen said. "A lot of those current trends remind me of going to the lesser functioning markets around the world."

And leaning into private listings as a way to optimize profits likely won't work for brokerages forever, he added. "If it's long-term not helping — you're not helping the industry, not helping your clients do better — it feels to me weaker long term."

A return to pre-pandemic inventory levels? In March, listing volume began rising — an indication that the market is starting to return to its pre-pandemic pace. Inventory is already 30% higher than this time last year. But why now?

Simonsen thinks there are two reasons for this shift. He suspects some sellers, after "sitting on the sidelines for three years," are now facing life changes and simply "can't wait any longer."

Concern about the U.S. economy is also a likely factor. Though unemployment inched up only slightly in March, consumer confidence about future employment is "at a 12-year low" amid a "weird" labor market with a slow hiring pace, Simonsen said. The recent rise in listings could be the result of some homeowners wondering if they should "get out before it gets worse."

If the trend continues, Simonson predicts "unsold inventory will be back at 2019 levels across the country" by the end of 2025.

Reversing a 3-year sales decline: Will more inventory translate to more sales? Simonsen thinks so, forecasting an increase in home sales over 2024. If that happens, the slowdown that began in 2022 would be reversed. Though 2025 didn't start strong for home sales, two variables — mortgage rates and economic concerns — could affect market dynamics.

Mortgage rates have fluctuated in the wake of President Donald Trump's April 2 tariffs announcement. While market activity tends to lessen with higher rates, Simonsen thinks people "are more sensitive to changes in rates than the absolute levels," meaning the "mortgage rate roller coaster" some experts predicted will need to level off.

"If we settle in and things are at 6.6%, 6.5% for the whole year, I believe that alone will result in growth," Simonsen said. And if rates drop even further? "Getting closer to 6% is when you'll really see the needle move."

Distress about the economy adds complexity, however. While inflation caused some concern in recent years, the overall "vibe" is changing amid low employment confidence levels. "It's a new variable for homebuyers this year — and we haven't had that variable in 15 years," Simonsen said. That "new variable" could cause the market to slow back down even if mortgage rates decline, he added.