New analysis by Zillow claims major disparities in how homes are marketed through Chicago’s private listing network, with homes in majority-white neighborhoods over twice as likely to be listed privately compared to those in majority-non-white areas.
Released today, the research examined over 40,000 residential listings from Midwest Real Estate Data (MRED), the multiple listing service (MLS) covering the Chicago region.
The Zillow findings show that 7.9% of homes for sale in majority-white neighborhoods were listed privately, compared to just 3.4% in majority-non-white areas. These disparities were present even after controlling for factors like price, home type, location and broker activity.
Zillow is currently negotiating with MRED over its internal private listing network, with the portal delaying the implementation of its new restrictions on certain private listing platforms in that area specifically. Zillow previously accused MRED of making “a play” to “protect” its private listings, which a company spokesperson described as a “bait and switch” as Zillow continues a larger campaign against these types of platforms.
MRED did not immediately respond to a request for comment.
According to the analysis, homes in majority-white neighborhoods had 2.2 times higher odds of being listed privately, suggesting racial composition, rather than price, as the primary driver.
“Chicago shows what can happen when parts of the housing market move into the shadows,” said Zillow Senior Economist Orphe Divounguy in a press release from Zillow. “Private marketing might sound appealing, but it risks deepening segregation and limiting opportunity, moving us further from the fair and open housing market consumers deserve. The data show clear disparities, and good intentions are no longer an excuse for expanding digital redlining.”
For nearly a decade, MRED has operated a private listing network where homes are visible only to agents within its network. This means that buyers not working with an insider agent lack access to these listings.
This issue extends beyond Chicago. As some large brokerages push to expand private listings nationwide, Fair Housing advocates warn this could amplify existing inequities across the country.
“Fifty-seven years after the Fair Housing Act promised an end to housing segregation, we are still waiting for that promise to be fulfilled,” Michael Chavarria—executive director of the HOPE Fair Housing Center, which works to eliminate discrimination in housing across much of Illinois—shared in the Zillow release. “Zillow’s decision to confront the data and its calls for the real estate community to open listings to all consumers is an example the industry must follow. Homebuyers deserve the right to see all the homes available in an area—not to have those choices quietly made for them.”
The Zillow press release also cites research by University of North Carolina professor Elizabeth Korver-Glenn that supports these findings, explaining that real estate agents tap their social networks to generate business, and because those networks are racially structured, private listings end up disproportionately excluding Asian, Black and Latino consumers.
“Because white agents’ networks are overwhelmingly comprised of other whites, this means that Asian, Black and Latino consumers are disproportionately excluded from finding out about informally listed homes for sale handled by white agents,” Korver-Glenn said in the release.
Previous Zillow research claims that sellers who transact off the MLS typically earn 1.5% less than those listing publicly—representing a nationwide loss of over $1 billion in the past two years. According to the research, sellers in communities of color lose nearly 3x more on average than those in majority-white areas when homes are sold privately.
