MLS in 2023: The Big Picture on Real Estate’s Multiple Listing Services

The MLS segment of the real estate industry has achieved a major milestone in the past few years. The number of multiple listing services in the United States has dropped below 600 and hopefully further consolidation will decrease this more.

The MLS landscape is complex to understand and the non-consolidation is the primary reason. We will visualize the data in the MLS space to give a big picture overview on the relationships between home buyers & Sellers, real estate agents, brokerages, Realtor Associations and MLS organizations.

The MLS has a database of listings, but the MLS is not only a database. The MLS has an organization behind it will strict rules and its cooperative broker rules allow for a listing database to be created and shared between participating brokers. Participating brokers are members of the MLS with authorization to access and add listing to the database.

Each individual MLS organization has its own fees it charges participants for managing labor resources, relationships with vendors and brokers, and rules for access to its services and listing data. Too many small MLSs in one geographical area is extremely inefficient and therefore causes more fees passed onto the brokerage firms and Realtors.

MLSs can range from organizations with over 100,000 working real estate agents to small cooperatives with just a few dozen members. Some markets are covered by multiple overlapping local MLSs, while others have a single MLS that covers a broad geography or even multiple states. The volume of listings an MLS makes available to members and subscribers–brokers and agents–is a major factor in the relative value these customers place on each MLS organization.

MLS brokerage cooperatives were originally created by brokers, usually within REALTOR® associations, to set rules for sharing each others’ listings and creating certainty that they’d be compensated by one another for sales.

Thousands of MLSs existed at one point, but the numbers have shrunk significantly in recent years. Brokers have encouraged some MLSs to consolidate, to improve cost and staffing efficiencies, as well as to access greater geographic coverage with fewer constraints.

While the agent population ebbs and flows with the market, associations and MLSs have been continually shrinking in unique organization counts. This trend comes from both organic drivers and organized industry action.

Some associations and MLSs have merged organizations to better serve brokers’ increasing needs for technology and more nimble support systems. Others have folded themselves into larger organizations or joint ventures as NAR’s Core Standards requirements (begun in 2014) set a minimum standard of service that they were not able to achieve on their own. NAR provides consolidation resources to help with the process.

The vast majority of agents and listings reside within a small fraction of the MLS organizations in the United States. 150 of the 600 MLSs in existence today have 90 percent of the agent population within their ranks. Half of the agents are in just 20 MLSs.

Nine out of ten listings can be found in fewer than half of all MLSs: 250 organizations. The long tail of MLS organizations is highly pronounced. Note that hundreds of MLSs don’t appear on the cumulative agent concentration graph–their agent count doesn’t register statistically.

State-by-state data creates a picture of where the number of MLS organizations is relatively high in comparison to the local listing, agent, and population numbers. These are indicators as to where there may be more costly organizational overhead and barriers to accessing markets and data.

State data provides a picture of some regional similarities. The number of MLSs, as compared to agent headcount, seems to be highest in clustered areas. The results are similar for MLSs per active listing and per general population. The locations with the highest organizational MLS overhead look much like their contiguous markets.

When looking at regional markers, governing bodies can analyze the variance in organizational structure and listing volume delivery relative to the rest of the country.

Region 1: Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, Vermont
Region 2: New Jersey, New York, Pennsylvania
Region 3: Delaware, District of Columbia, Maryland, Virginia, West Virginia
Region 4: Kentucky, North Carolina, South Carolina, Tennessee
Region 5: Alabama, Florida, Georgia, Mississippi, Virgin Islands, Puerto Rico
Region 6: Michigan, Ohio
Region 7: Illinois, Indiana, Wisconsin
Region 8: Iowa, Minnesota, Nebraska, North Dakota, South Dakota
Region 9: Arkansas, Kansas, Missouri, Oklahoma
Region 10: Louisiana, Texas
Region 11: Arizona, Colorado, Nevada, New Mexico, Utah, Wyoming
Region 12: Alaska, Idaho, Montana, Oregon, Washington
Region 13: California, Hawaii, Guam

The continual modernization of MLS infrastructure is being driven by organizations coming together to strategize over big picture industry issues with quality information. Good data creates a storyline that garners attention, awareness, and buy-in from industry participants. Leaders from REALTOR® associations, MLSs, brokerages, and technology partners can collaborate to create this environment.