FTC Action Strengthens Online Real Estate Sites

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

FTC Targets Home-Listing Limits

• Summary: The Federal Trade Commission yesterday charged the Austin (Texas) Board of Realtors, a local affilate of the National Association of Realtors, the dominant trade group for real estate agents and brokers, with violating anti-trust law by enforcing a rule that bars discount realtors from sharing their listings with web sites such as Realtor.com via multiple listing services (known as "MLS"). The FTC says it is now approaching other local boards of realtors to clarify their practices. The Austin board said it scrapped the rule last August. Last year the Justice Department filed a suit alleging that the National Association of Realtors' policy to allow brokers to block their listings from appearing on other brokers' web sites restrained competition.
• Comment on related stocks/ETFs: Incrementally positive for Realtor.com owner Move Inc. (MOVE). More fundamentally, real estate agents are fighting a rear-guard action against the Internet's ability to reduce information inefficiency in their market, a key factor in holding up the excessive level of real estate commissions in the US. As more house transactions move to the Internet, other companies that stand to gain include Zip Realty (ZIPR) and HouseValues (SOLD). Eventually a meaningful proportion of real estate transactions will occur without broker involvement, benefitting Tribune (TRB) which recently acquired ForSaleByOwner.com, and IAC/Interactive Corp. (IACI) which owns Owners.com.