The North Texas real estate market is buzzing with change and uncertainty. Recent regulatory shifts and a significant legal settlement have stirred up change and lots of discussion with real estate professionals and clients alike.
The Texas Real Estate Commission announces changes by TREC that require more transparency and accountability in the industry, which means agents will have to reveal more about their services going forward. More specific guidance as to how they should present, and negotiate, and act on behalf of their clients’ commissions. The overall effect should be a market that is more competitive and consumer-focused.
Legal Battles and Industry Reactions
In a parallel development, the National Association of Realtors (NAR) recently found itself in yet another huge lawsuit, this time in Missouri, which ended in a $418 million settlement. According to the complaint, NAR, along with two big brokerages, was responsible for keeping commission rates high through mandatory commission-sharing on multiple listing services (MLS). Now, it has agreed to stop these practices, changing the way commissions are handled all over the board.
Not all are negative, though. Gentry commented, “We now just have to work harder to prove our worth,” and the agents will have to work harder to provide great service and communicate that to prove their worth. And some—well, they agree. Abigail Davis, a realtor in Dallas, said, “While the task in the center of the situation is still just the negotiation, the manner in which the information on the commission is displayed may change,” to stress that.
Market Impact and Prediction
Keefe Bruyette & Woods, a financial firm, predicts that these regulatory changes and the legal settlement can reduce agent commissions by 30% and might even result in cutting down the number of real estate agents by up to 80% if trends continue. The potential shakeup portends that agents will have to prove their worth as North Texas has already seen housing challenges. A study by Stessa shows that, from 2010 to 2020, Dallas-Fort Worth (DFW) was one of the fastest growing metros in terms of residential construction. Despite that growth, the housing supply has not been able to keep up with the skyrocketing population, leading to rising prices and a housing shortage.
A report from Up for Growth states that as of 2020, DFW had an underproduction of more than 85,000 housing units, ranking it 11 for inadequate housing creation. As a result, that has helped push up home prices and rents, and today, it’s a major concern around affordability for a lot of people.
Looking Ahead
The tax onill mix of new regulations, legal changes, market dynamics and existing dynamics is setting the stage for an incredibly challenging landscape in the North Texas real estate market. As agents and their clients adapt to these changes, shifts toward transparency, accountability, and value. That means changing the way business is done. Some real estate professionals see it as an opportunity to enhance their services and further cement better relationships with clients, while others are worried that it could potentially be the opportunity for lower sales due to a decrease in percentages. The far-reaching effects are yet to be unveiled, but change is eminent in the North Texas real estate market.
For more detailed information, go to the Texas Real Estate Commission’s rules and law page
