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The practice of selling homes as non-public "pocket listings" has increased by 67% since 2019, rising from 2.4% to 4.0% of all transactions, a trend that housing scholars link to reduced market fairness and access for people of color. This analysis, based on industry data, reveals that in some major metropolitan areas, over 10% of listings are never marketed to the public. This article explains what pocket listings are, their tangible impact on minority homebuyers, the market forces driving their increase, and the concrete steps industry organizations can take to promote a more equitable housing market.
A pocket listing is a property for sale that is not entered into a local Multiple Listing Service (MLS). An MLS is a database used by real estate brokers to share information about properties with other cooperating brokers. When a listing is "pocketed," it is typically marketed only through an agent's private network, excluding the vast majority of potential buyers. While sellers may have privacy concerns, the systemic effect is that the best properties in the most desirable neighborhoods are often the ones sold in secret, disproportionately impacting buyers who are not part of predominantly white social and professional networks.
Study after study has shown that pocket listings have an exclusionary effect. Research involving in-depth observation of real estate agents, such as a comprehensive year-long study in Houston, found that because the social networks of many white agents are predominantly white, minority homebuyers are often unaware that a pocket-listed home is available. This practice limits access to housing opportunities and contravenes the first principle of a fair market: that every listing should be marketed to the public. The consequence is the perpetuation of segregated neighborhoods and unequal access to the education and economic opportunities that are often tied to specific residential areas.
The significant increase is not necessarily driven by overt discrimination but by intense market competition. With the number of homes for sale down significantly from previous years, the incentive for brokerages to use pocket listings is powerful.
When competition is fierce, fairness can become a casualty. With more real estate agents than homes for sale in some markets, the pressure to gain an edge is immense.
Addressing this issue requires action from multiple industry bodies to close existing loopholes and promote transparency.
1. The National Association of Realtors (NAR) Can Strengthen Its Policy. The NAR has already taken a step by prohibiting agents from different brokerages from sharing pocket listings via private channels. However, this created a loophole for "office exclusives," where large brokerages market listings only within their own company. The NAR could support fairness by closing this loophole at its upcoming conference, ensuring no listing is entirely withheld from the broader broker community.
2. Multiple Listing Services (MLS) Can Offer Privacy with Equity. There are legitimate reasons a seller may want to limit marketing. MLSs can solve this by providing agents with tools to control how a listing is marketed, not to whom it is marketed. For example, a listing can be shared with all MLS participants (other agents) but syndicated to public websites with no photos or a hidden price. This approach protects a seller's privacy while ensuring that every qualified buyer's agent has equal access to the listing information.
Pocket listings are a relic of a less equitable era in real estate. The industry has made public commitments to racial justice, but now must follow through with action. The most effective steps are for large brokerages to voluntarily end the practice and for the NAR to close the office-exclusive loophole. By leveraging updated MLS tools that balance privacy with transparency, the industry can ensure that the responsibility of managing the housing market is treated as the public trust it should be.
