NorthstarMLS is currently one of 522 independent MLSs that form a tapestry of MLS databases. Third parties leverage these to provide an industry-wide database of property listings and transaction data. While listing data has long powered residential real estate in the United States, the MLS itself is a fairly nondescript business.
Simple at heart, the main functions of the MLS boil down to data collection, storage, and distribution. It also acts as a curator and custodian, ensuring the data is accurate and free flowing to brokers, agents, and their business partners in client service, advertising, and back-office operations.
Despite this “behind-the-scenes” approach to business, the MLS has been and continues to serve as the platform for industry evolution.
, listings have transformed from pages in printed catalogs to simple internet listings to today’s immersive views of properties. Real estate professionals, their investors, and developers rely on this bounty of information to make informed decisions, identify lucrative opportunities, and tailor their offerings to meet the evolving demands of buyers and sellers.
Realizing Greater Potential
The modern MLS also positions listing data for even greater potential. It’s being consolidated and paired with demographic information, market trends, geographic data, and even sentiment analysis from social media. All of this serves to produce actionable insights based upon a comprehensive understanding of market dynamics.
This means MLS data is being leveraged to the benefit of MLS users who can:
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Empower Data-Driven Decision Making. The real estate industry traditionally relied on experience and intuition in decision-making. Agents knew their local markets and guided their clients based on their past experiences with that geography’s housing inventory.
However, as the MLS and their partners continue harnessing the power of analytics and machine learning, Realtors® have started extracting valuable patterns, correlations, and predictive insights.
For instance, by analyzing historical transaction data along with economic indicators, brokers and agents can forecast market trends, assess the impact of external factors, and strategically position themselves in the market.
These data-informed decisions not only minimize risk but also lead toward optimized investments and enhanced return for real estate professionals and their clients.
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Enhance Market Transparency and Efficiency. Transparency is the bedrock of a healthy real estate market. Consolidation of MLS data, when paired with additional property-related data sets, helps build transparency.
It does this by providing comprehensive and reliable market insights, enabling informed decision-making, and offering equal access to data for all Realtor® participants. The transaction process is also streamlined.
Consumers are one set of MLS data users who are not satisfied staying in predefined geographical boxes. Using consolidated views assembled by our nationwide Internet Data Content (IDC) partners, they have pushed past traditional small geographical MLS boundaries and demanded broader market insights. This trend only expanded following the onset of the pandemic.
Domestic migration trends for 2020-21 show a $68 billion drop in taxable income for some large urban areas as people sought new lives in more rural, expanding areas—such as the Sunbelt or Mountain West.
Greater transparency fosters trust, accountability, and a fair marketplace, benefiting all stakeholders in real estate transactions. If we don’t take steps to foster this kind of open marketplace, consumers will look elsewhere for others to build it for them.
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Address Challenges and Ensuring Security. While consolidating MLS data offers tremendous opportunities, it also presents challenges, especially concerning data security and privacy.
Safeguarding sensitive customer information is of paramount importance. Robust data protection measures, adherence to regulatory standards, and transparent data-usage policies are essential to building trust with clients and maintaining the integrity of the real estate ecosystem.
Collaboration among industry stakeholders, including real estate associations, technology providers, and regulatory authorities, is crucial to addressing these challenges collectively and ensuring that data consolidation benefits all parties in real estate transactions.
Benefits of Collaboration
As more MLSs work together consolidating data on previously inconceivable scales, the MLS-driven portion of the industry is rapidly revolutionizing.
Consolidation empowers professionals with unprecedented insights, facilitates data-driven decision-making, and enhances market transparency and efficiency. By contrast, MLSs that continue operating as data moats, keeping professional access to MLS data siloed and not easily accessible or shared, will fall further behind. This hinders efficient data management and collaboration, and often leads to other challenges that impede growth and effectiveness for members and consumers.
As the real estate landscape evolves, consumer demand for more data-driven services from brokers and agents will only increase. By staying at the forefront of data-driven innovation, real estate professionals can shape a dynamic and consumer-focused market, creating a prosperous future for all stakeholders.
Tim Dain is CEO of NorthstarMLS. [6] He has served as vice president and general manager for real estate technology company Remine, as president and CEO of MARIS MLS, as director of MLS for ACTRIS and SIRMLS, and as a Realtor® salesperson and broker-owner. He was named to the Swanepoel Power 200 list of the most powerful and influential executives in the residential real estate industry in 2017 and 2022.