HomeServices of America Agrees to End Lawsuits with Payout

BOCA REAL ESTATE MARKET WATCH

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty. Every week, I share market data to keeyou informed with the local real estate market. Here is this week’s Boca Real Estate Market Watch.

Single Family Homes

This past week, we've seen:

• 71 new listings, ranging in price from $330K to $19.5M!
• 41 properties under contract.
• 29 properties pending.
• 47 homes sold, with prices ranging from $367K to $11.8M!

For condos and townhomes, the activity has been:

• 77 new listings, priced from $99K to $4M.
• 44 properties under contract.
• 35 properties pending.
• 70 closed sales, ranging from $100K to $8.3M.

Industry News: HomeServices of America Settlement

In a significant development, HomeServices of America, one of the largest real estate brokerages in the nation, has agreed to pay $250 million and enact changes to its business practices as part of an agreement to settle lawsuits that posed an ongoing threat to the firm.

HomeServices, owned by Warren Buffett’s Berkshire Hathaway, notified the court of its proposed settlement. The stakes were high, with HomeServices potentially liable for the remaining $4.7 billion in damages from an October jury verdict in Sitzer/Burnett, which awarded plaintiffs $5.3 billion. The jury awarded $1.78 billion, an amount that automatically triples.

The settlement is a stunning amount and marks a significant departure for HomeServices, which had vowed to continue its legal fight against the homeseller plaintiffs, who alleged it took part in an illegal conspiracy to keep commissions high. Chris Kelly, HomeServices’ executive vice president, stated, “The financial terms of the settlement represent a sole obligation of HomeServices, with no participation by any parent entity (meaning Berkshire Hathaway), to effectively conclude our involvement in the antitrust litigation.” Kelly continued, “While we have always been confident in the legality and ethics of our business practices, the decision to settle was driven by a desire to eliminate the uncertainty brought by the protracted appellate and litigation process.”

The $250 million settlement amount brings the total damages from the Sitzer/Burnett lawsuit to $876.5 million, including $418 million from NAR, $70 million from Keller Williams, $55 million from RE/MAX, and $83.5 million from Anywhere.

HomeServices’ brokers conducted $165.7 billion in sales volume in 2022, second only to Compass, which wasn’t named in the Sitzer/Burnett lawsuit. Compass was named in other cases known as Umpa and Gibson. It reached its own settlement agreement last month and agreed to pay $57.5 million. So that's a total of nearly $1 billion that will be returned to homesellers over the next few years, less the 30-40% cut, plus expenses, that the attorneys will keep.

Market Trends

The March statistics are in and it's a mixed bag. The average price of a single-family home in Boca Raton is now just over $1.9 million! That's up 55% from a year ago, which is remarkable. However, sales volume is down over 13% and inventory has been creeping up, giving buyers more choices. Despite high interest rates, buyer activity remains strong.

The average price of a townhouse or condo is now $639K, up 24%. However, inventory is up 55%, which is significant. We now have 5.8 months of supply of condos or townhomes on the market. Remember I told you that condos are the canary in the coal mine? Here it is - we are now in a somewhat balanced market, but if inventory continues to grow so rapidly, we will soon have a glut of supply, leading to a potential market correction.

Conclusion

That’s it for today. Thank you for watching, and stay tuned for more updates on the ever-evolving housing market. If you’d like specific market data on your neighborhood, just send me a text or give us a call at 954-799-6867. And if you’re watching this on my YouTube channel and like the information, don’t forget to hit the like and subscribe buttons and the notification bell below. Until next time, this is Joe Hillner with Your Home Sold Guaranteed Realty signing off for now. Go Serve Big everybody! Be nice to each other, and I'll see you next week!