Fed Paper Says Private Listings Screw Over the Elderly

16 minutes read

We are excited to announce that Jonathan Miller, who has long authored the most authoritative report on the residential real estate market, is partnering with The Real Deal. Below, you’ll find his Housing Notes column, which will now run on our site several times a week. In addition, Miller’s quarterly report for New York City, which he published through Douglas Elliman for more than three decades, will now be “The Real Deal report, prepared by Jonathan Miller.” Miller’s data venture, Streetmatrix, which provides hyperlocal data, will provide statistics to TRD Data subscribers.

— TRD editors

A paper on the age gap and private listings

This November 2025 white paper from the Federal Reserve Bank of Philadelphia, “Aging and Housing Returns,” documents that older homeowners systematically earn lower returns when they sell their homes, and links a significant part of that “age gap” to both property condition and low transparency sales channels like private listings, especially when selling to investors.

In this paper, the “age gap” refers to the difference in average housing investment returns between older and middle‑aged home sellers, holding property and market conditions constant. Older sellers don’t make as high a return as middle-aged sellers, and the two primary drivers of this discrepancy are property condition and private listings. The probability of selling off-MLS and the probability of selling to an investor both rise with seller age and jump sharply for sellers 76 and older.

Here’s the white paper’s full abstract (bold my emphasis):

Older home sellers receive lower returns than younger home sellers. Homes sold by older people have fewer major renovations but higher rates of poor upkeep. Older sellers are also more likely to sell off-MLS (“pocket listings”) and to sell to investors, leading to lower prices. These patterns suggest that older sellers may be disproportionately disadvantaged by agents’ incentive to maximize fees through generating high sales volume instead of maximizing sale prices. Age-related cognitive decline makes the elderly more vulnerable. For causal evidence, we show that reforms making private listings more transparent reduced both the prevalence of pocket listings and the magnitude of the age gap in returns.

Midwest Real Estate Data (MRED) breaks from neutrality

Currently, there is a high-stakes legal fight between Zillow and Compass/MRED (the latter is an MLS based in Chicagoland, but has national MLS capabilities and aspirations). Because my definition of a “hipster” is someone who is always looking for irony, which fits my presence on Housing Notes, I thought it was quite ironic that this Fed paper was actually based on a policy change by MRED.

Back in 2016, an MRED policy reform on transparency pushed more “private” sales into public MLS channels: for sellers 75+, the share of homes listed on MLS in Illinois jumped by about 10 percentage points relative to similar sellers in other states. After this policy was instituted, the age gap shrank by about half. This study proved causally that restricting private listings can improve sale outcomes for elderly homeowners.

Pocket listings incentivize double-dipping

More significantly, the Fed study indicated that private listings can diverge from a seller’s goal of maximizing price, because reduced exposure and transparency make it easier to steer deals toward favored buyers (promoting redlining risk). It also does something probably every experienced real estate agent I’ve ever met believes: private listings foster double-dipping.

In fairness, the Fed paper also discusses legitimate reasons why a seller might prefer private marketing (privacy for high-profile owners, limited showings, testing the price, early-phase “coming soon” strategies), but emphasizes that these benefits come with costs concentrated among older owners.

I thought it was especially interesting that the Fed paper looked at the timing, like when the age penalty really ramps up (post-70). The results align with evidence on cognitive decline and misperceptions of their financial situation, which they argue make elderly sellers less able to detect and push back against suboptimal off-MLS strategies.

Just the idea that a PLN is more adversely impactful on the elderly because they are less able to push back on the concept suggests the entire concept is not an ethical solution for the industry. This is made even worse because the new Compass-Anywhere entity is pushing PLNs out at a national scale never seen before.

Compass keeps it in the family with a new incentive

Right after the Compass-Anywhere deal closed, Compass introduced a new internal referral program that pays listing agents 10 percent of the commission earned by another Compass agent when a buyer lead originates from the listing on Compass.com and later closes a transaction. The inquiry first goes to the listing agent; if they decline or choose not to work with that buyer, they can refer the lead to a colleague and receive a 10 percent “finder’s fee.”

In reality, Compass’s 10 percent internal referral is a more aggressive “keep it in the family” routing of buyers, potentially increasing double‑ending opportunities, especially when combined with the company’s size and control over its own listing traffic. In a post‑NAR settlement environment that is supposed to reduce steering and promote transparency, a program that pays listing agents on the buy‑side a commission implemented right after the Anywhere purchase, even when the agent never worked directly with the buyer, seems like a “tell” to me. And that “tell” was that it has always been about double-ending deals at scale. The topic was being brushed off because of concerns about the pending regulatory scrutiny on the Anywhere deal, until it wasn’t.

Compass, Zillow private listings battle + the MRED board

MRED runs a private listing network (PLN) that lets members keep listings semi-hidden before they hit the public MLS, something Zillow has publicly criticized as “digital redlining” because it limits visibility by agent relationship rather than price or qualification. MRED just pulled 43,000 listings from Zillow after Zillow prevented 9 listings from going on their platform per WSJ: Thousands of Chicago Home Listings Just Disappeared Off Zillow. From Zillow’s press release:

MRED’s press release announcing the feed cut leads with this: Zillow lost thousands of Chicago listings over nine Compass listings it refused to display. The framing is designed to make Zillow look like the guilty party here.

Compass is pushing a model where listings can sit in private networks or “private exclusives” before (or instead of) going fully public, letting Compass try to double-end more deals. Why do I think this? Private listings sell for the same or less (not more), and they hide critical information by design that is needed for price discovery.

Zillow says MRED rewrote rules to accommodate Compass’s hidden‑listing model and is using control over Chicagoland data to force Zillow to carry Compass’s private inventory in other states as well (California, Florida, Georgia). Zillow seems to be arguing that MRED is no longer neutral, given that multiple board seats are held by Compass-affiliated brokers. That structure is central to Zillow’s claim that MRED and Compass teamed up to force Zillow into showing private listings nationwide or lose access to Chicago-area data.

Final thoughts

The “age gap” is the difference in return between older and middle‑aged sellers, as off‑MLS and investor sales jump for owners 76 and up. A Fed paper linked this post‑70 penalty to cognitive decline and money misperceptions, making older owners less able to push back on bad off‑MLS advice. This issue alone shows how harmful PLNs can be to consumers. Private marketing can have valid uses, but its costs fall hardest on older sellers. After Compass acquired Anywhere without apparent regulatory scrutiny, it introduced a 10 percent internal referral program to keep more deals within the firm and potentially boost double‑dipping, showing that, despite constant denials, this was probably the plan all along. Compass continues to battle Zillow over PLNs, now using MRED, which is seemingly under their control and no longer a neutral gatekeeper of listing data.

The actual final thought — I’ve seen David Byrne sing “Burning Down the House” on Broadway; the song’s title is a possible analogy for the unaffordability of the housing market, and this is a housing-related platform by a Talking Heads devotee, but my goodness.