Private Listings Could Spark Industry Meltdown, Warns U.S. Network CEO

The U.S. real estate industry is staring down three possible futures—and one of them could dismantle the very structure of the market, according to NextHome co-CEO James Dwiggins.

In a sharp warning to the sector, Dwiggins has outlined what he sees as a looming crisis driven by the rise of private or “off-market” listings—a strategy gaining traction among high-end brokerages and tech-forward firms like Compass.

At the center of the controversy is Compass’s “three-phase marketing strategy,” which deliberately holds listings off the multiple listing service (MLS) in the early stages.

Dwiggins argues the approach could trigger a dangerous shift across the industry.

“There are two likely paths,” Dwiggins told Inman. “One: this ends in massive litigation.

The only reason it hasn’t started already is because there isn’t a large enough class. But it’s coming.”

According to Dwiggins, class-action attorneys already see a clear pathway to trial, with some saying it would be “easier to win than Burnett”—a reference to the landmark commission lawsuit that rattled the U.S. real estate industry.

He predicts lawsuits will begin surfacing within 24 to 36 months as legal teams collect evidence from internal marketing materials, sales data, and CMAs.

The second—and more constructive—outcome involves the market self-correcting, with private listings returning to their traditional use: as a rare exception for clients with legitimate privacy concerns.

“Compass doesn’t get its way, the strategy loses momentum, and we return to serving both buyers and sellers fairly, without distorting the market,” Dwiggins said.

But it’s the third scenario that raises the most concern.

“If brokerages follow Compass’s lead and begin creating their own private listing networks, we’re headed for disaster. It would be catastrophic,” he said.

Dwiggins painted a grim picture: suppressed inventory, distorted pricing, and a market where transparency collapses.

Buyers could be left in the dark unless they’re working directly with agents inside select firms.

“You’d see the worst consumer experience ever created,” he warned.

“All the inventory gets held back. You don’t even know it exists unless your agent is with that firm.”

He believes the consequences of such fragmentation would be severe: unreliable appraisal data, disrupted lending processes, and a wave of consolidation that could leave just 12 to 15 brokerages controlling up to 70% of the country’s housing stock.

And at the epicenter of it all? Zillow.

In this scenario, Dwiggins believes Zillow could transform overnight into the largest real estate brokerage in the United States.

“Zillow already has the eyeballs. If MLS usage collapses and private listings dominate, they flip the switch and send all the leads to their agents.

In 30 days, they’re the biggest player in the country,” he said.

For Dwiggins, the fight over private listings isn’t just about marketing tactics—it’s about transparency, ethics, and the agent’s duty to serve clients honestly.

“Our job is to sit down and ask: What are your goals?

Ninety-nine percent of sellers are going to say the same two things—highest price, shortest time. That doesn’t align with hiding their home from the public,” he said.

Currently, one of the biggest restraints on Compass’s strategy is Zillow’s policy prohibiting off-market listings from being featured.

Dwiggins says if that ban remains in place, it significantly undercuts the appeal of private listing strategies.

“If you can’t appear on Zillow, you’re going to struggle to explain that to any seller,” he said.

As the private listings debate intensifies, one thing is clear: this isn’t just a policy conversation. It could define the future of real estate in America.