Zillow Argues Private Listing Network Deepens Housing Segregation

Zillow is pointing out the racial makeup of neighborhoods for homes sold without being publicly listed in its latest attack on Chicago’s MLS over its Private Listing Network.

Chicago-area homes in majority white neighborhoods are more than twice as likely to be listed on the private platform compared to homes in majority non-white areas, Zillow highlighted in an analysis published Thursday morning.

Zillow claims exclusive marketing practices like the Private Listing Network threaten fair housing standards and reinforce segregated neighborhoods. Chicago’s MLS operator, Midwest Real Estate Data (MRED), created the network in 2016 as a listing option for Chicago-area brokers that displays offerings to all other agents subscribed to MRED, but keeps them off public platforms like Zillow.

“The data show clear disparities, and good intentions are no longer an excuse for expanding digital redlining,” Zillow Senior Economist Orphe Divounguy said.

The critique comes as Zillow this year rolled out Listing Access Standards that require listings to be made available on public portals within one business day of being publicly marketed. The rules, largely a reaction to office-exclusive listings like the marketing strategy championed by Compass, would also limit how Chicago-area brokers can use the Private Listing Network.

Chicago is one of the few markets where Zillow hasn’t begun enforcing the standards, but under the rules, listings that start on the private network and then move to the standard MLS would be blocked from showing up on Zillow after their transitions.

According to Zillow, it examined more than 40,000 listings available on Chicago’s MLS on Oct. 21, controlling for factors like price, home type, location and broker activity. The study found that 7.9 percent of homes in majority-white neighborhoods were on the Private Listing Network, compared to 3.4 percent in majority-non-white neighborhoods.

The data is a “cautionary example as some large brokerages are pushing to expand private marketing of homes nationwide — a trend poised to amplify inequity if it spreads,” Zillow said.

In a March essay detailing the Private Listing Network, MRED acknowledged the fair housing concerns that private listings present. It argued the MLS-wide platform, which shows listings to all brokers in the MLS, limits those concerns by spreading beyond a single agent or brokerage’s network.

“Requiring listings to be visible to all MLS subscribers helps ensure transparency, broad access, and reduces the risk of discriminatory steering, whether intentional or inadvertent,” the MRED paper said.

MRED has dug in on defending its private network, suggesting Zillow’s standards are a “one-size-fits-all” policy that ignores sensitive life events — like divorce, death or illness — that could cause a homeowner to want more privacy in listings.

Practically, the Private Listing Network is used often by sellers who want to test their home price and limit the number of days on the market before going public.

Zillow has bashed the Private Listing Network and reached out to managing brokers warning that offerings that use the system would violate its standards, but it has not said when it will start enforcing its rules. MRED previously said blocking certain listings may be a violation of its agreement with Zillow that allows the site to display MRED offerings.

MRED also published its own data in the March essay, highlighting stats it said prove the benefits of the private network. According to the paper, the average private listing closed for 90.7 percent of its list price compared to 86.9 percent for public offerings in 2024. Private listings also spent less time on the market on average, at 29 days in 2024, compared to 44 days for public listings.

Zillow’s data, though, reinforces the home search giant’s argument that private listings distort the housing market and lead to unequal access for consumers. The company pointed to 2018 research that found pocket listings can unintentionally contribute to segregation, by limiting private listings to an agent’s network. White agents are more likely to work with white clients, the study said, while Black and Latino agents are more likely to work with non-white clients.

The spat over the Private Listing Network — a feature that among MLSes at large is relatively unique to MRED — is playing out as a hearing is underway in the lawsuit Compass brought against Zillow over its listing rules. Compass has alleged Zillow is unfairly leveraging monopoly power to stifle competition.