Blair sees opportunity for CoStar, Zillow from NAR settlement

William Blair analysts see two notable outcomes from the National Association of Realtors’s preliminary $418M settlement that would effectively end the commission-related lawsuits in the residential industry. It would release NAR member agents from liability and it includes a mechanism for brokerage entities with residential transaction volumes that exceed $2B in 2022 to be released from all related claims, the analyst tells investors in a research note. The firm believes the potential changes would likely accelerate commission pressure on buyer agents, and could support overall commission rates around a home transaction trending lower in the near term. Blair also believes the settlement could raise some questions about the role of the MLS system altogether in broadly distributing listings of homes for sale. It thinks this could be an opportunity for players like CoStar Group (CSGP) and Zillow (Z, ZG), but “would give a leg up” to CoStar, saying it has successfully built out the dominant listing distribution in both multifamily and broader commercial real estate. Blair believes today’s news is a modest negative for the brokerage models it covers.