Thursday, November 2, 2023

Jury Finds Realtors Conspired to Keep Commissions High

 One of the puzzles of the internet age, when you can take house tours remotely, and see house listings online, is how real estate agents have managed to keep their dominant position in the residential real estate market, including commissions that have remained roughly constant as a percentage of sale price, as sale prices have risen.  There's certainly room for economists to investigate the contract forms that are widespread in the industry.

In the meantime, the WSJ has the story from the legal front:

Jury Finds Realtors Conspired to Keep Commissions High. The National Association of Realtors and big residential brokerages were found liable for about $1.8 billion in damages  By Laura Kusisto, Nicole Friedman, and Shannon Najmabadi

"A federal jury on Tuesday found the National Association of Realtors and large residential brokerages liable for about $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high.

The verdict could lead to industrywide upheaval by changing decades-old rules that have helped lock in commission rates even as home prices have skyrocketed—which has allowed real-estate agents to collect ever-larger sums. It comes in the first of two antitrust lawsuits arguing that unlawful industry practices have left consumers unable to lower their costs even though internet-era innovations have allowed many buyers to find homes themselves online.

Announced in a packed Kansas City, Mo., courtroom, the verdict came after just a few hours of jury deliberations. The case was brought by home sellers in several Midwestern states."

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