Zillow report goes after private real estate listings
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Illustration: Maura Losch/Axios
A new analysis by Zillow suggests that private, or "pocket," listings in Chicago reinforce housing segregation, but proponents of these listings say they're better for the housing market overall.
The big picture: Zillow examined 40,000 listings on the MRED (Midwest Real Estate Data), the listing service for sellers and buyers in Chicago, to determine that listings only accessible to agents and brokers rather than a public marketplace were more often posted in majority-white neighborhoods than majority non-white neighborhoods.
Why it matters: Zillow, an online real estate marketplace open to all viewers, claims these closed-off postings don't give buyers a full picture of available inventory, with one Zillow researcher comparing it to "digital redlining," the discriminatory housing practice in the mid-20th century that kept primarily Black homebuyers out of certain neighborhoods.
By the numbers: In majority white neighborhoods, 7.9% of homes were privately listed compared to 3.4% in majority-non-white areas, which were determined by ZIP code.
The other side: MRED pushed back on Zillow's findings, saying their PLN (private listing network) is open to all registered agents, allowing equal access to represented buyers.
- "We want to prevent the use of shadow networks off the MLS that could lead to discrimination and exclusion," the company said in a statement on its website.
- The statement also notes that more private listings in majority-white neighborhoods could correlate to the fact that there are "three times as many active listings in majority white zip codes as non-white zip codes."
Yes, but: A Zillow spokesperson tells Axios their analysis controlled for location.
Between the lines: The fight over private listings has been an ongoing battle between the MRED and Zillow. The latter announced earlier this year it would not advertise homes that were privately listed, but it hasn't enforced that policy in Chicago yet.
- MRED says the ban is just a move by Zillow to control the marketplace, perhaps pushing more agents to post on Zillow rather than a private listing on MRED.
What they're saying: Compass CEO Robert Reffkin also disagrees with doing away with private listings, telling Chicago Agent magazine earlier this year that forcing sellers to market their home everywhere leads to longer days on the market, and eventually price drops, "making them look like damaged goods."
Editor's note: This story has been updated to remove an incorrect line about Zillow regarding who benefits most from private listing sales.