Compass-Redfin Partnership Could Unlock Significant Housing Inventory, Report Finds
A new analysis from Redfin’s economic team suggests that a recent high-profile brokerage partnership could meaningfully increase the number of homes for sale in markets nationwide. The report, shared exclusively with Inman, estimates that pre-marketing strategies—like the “Coming Soon” listings now prominently displayed on Redfin through its deal with Compass—could boost annual for-sale inventory by 6% to 12% in regions where such practices are permitted.
The partnership, announced in early February, allows Compass’s private, off-MLS “Coming Soon” listings to be showcased on Redfin before they are widely distributed through traditional multiple listing services (MLS). The move was widely seen as a strategic effort to increase visible inventory amid a prolonged housing shortage and to navigate the complex, varying rules that govern pre-MLS marketing across different local MLSs.
How Pre-Marketing Could Release “Pent-Up” Supply
Redfin’s economists built their estimate on a key behavioral insight: the perceived risks and costs of a traditional MLS listing deter some homeowners from selling, even if they are moderately interested in moving. These “at-the-margin” sellers might be dissuaded by fears of pricing their home incorrectly, losing privacy, or dealing with the logistics of showings immediately.
“We’re just trying to say how many more listings can we end up with within a year, or every year, if it were possible for sellers to have some reduced risk of being mispriced or just having additional privacy,” explained Asad Khan, Redfin’s senior economist.
The report posits that a pre-marketing period—where a home is marketed discreetly to a select audience before a full public launch—allows sellers to gauge interest, refine pricing, and maintain privacy. This reduced friction, Redfin argues, would convince a portion of hesitant owners to proceed with a sale they otherwise would have postponed or abandoned.
Quantifying the Impact and the Ripple Effect
The economists’ model concludes that in compliant markets, the annualized listing count could rise by 6% to 12%. Furthermore, they assign a tangible value to this strategy for sellers, estimating the benefits of improved pricing accuracy and convenience are worth approximately 1.2% to 2.4% of a home’s eventual sale price.
Perhaps more significantly, the report highlights a potential multiplier effect. When a hesitant seller finally lists and sells their home, they often become a buyer themselves, triggering a chain reaction.
“If you brought all this new inventory through reducing these barriers to listing and selling their home, there’s also going to be the subsequent chain effect,” Khan said. “A new seller comes on the market, they sell their house, but then there’s a high likelihood that the buyer who bought that house also then lists their house for sale.”
Redfin conservatively estimates this multiplier at 1.6x. This means that for every 100 new listings generated by pre-marketing, an additional 60 subsequent listings could eventually enter the market as those sellers become buyers and repeat the cycle.
Important Caveats and Market Variability
The economists stress that these are national estimates, and real-world impact will vary dramatically by local market. Factors like overall housing volatility, local pricing complexity, and the specific willingness of sellers in a given area to test the market will influence uptake.
Furthermore, the strategy’s success is entirely contingent on local MLS regulations. Many MLSs have strict “immediate distribution” rules that limit or prohibit off-MLS marketing periods. The Compass-Redfin model is currently active only in those markets where such pre-marketing is explicitly allowed by local rules.
Khan noted that the report’s assumptions are deliberately conservative. The actual effect could be higher or lower, but the analysis provides a framework for understanding how reducing a psychological and procedural barrier to listing might help alleviate the persistent inventory crunch that has constrained the housing market for years.
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