Grading Time! The 2021 Predictions

Yes, it’s that time of year again. As always, in advance of my 2022 predictions, I like to grade my 2021 predictions and see just how wrong I was with them. I have a feeling it’ll be bad.

But still, one must soldier on, consoled by the fact that all of my predictions are sure to be wrong, or your money back! (Does not apply to VIP Subscribers.) Here’s where we stand after 11 years:

For those keeping track at home, my record so far:

With a track record like that, it should be obvious that my Predictions series has become less of what should be, what will be, and more of what you should think about. So, let’s see how things went for me in 2021.

1. Say Hello to Your New Lordi, Long Island and Elsewhere – Kind Of

After the big brouhaha in New York State with the Newsday investigations into fair housing violations, I thought that NYS would bring the hammer down on the industry.

I guess they kinda sorta did. It’s hard to really figure out what specifically New York did, and I don’t feel like doing legislative history research just for grading myself, but according to Newsday’s own followup, there’s been some action:

After holding hearings spurred by Newsday’s investigation, the State Senate in February approved a wide-ranging package of anti-housing-discrimination bills, including a measure that would require the state attorney general to conduct annual undercover testing. Funding would come from increasing the fees the state charges for real estate licenses, hiking the brokers’ license fee by $30 and agents’ license fee by $10 to generate an estimated $1.1 million a year.

In addition, Gov. Andrew M. Cuomo announced on Feb. 25 the state would allocate $250,000 for undercover testing by nonprofit groups.

And last May, state Attorney General Letitia James announced $4.5 million in grants for nonprofits, including Long Island Housing Services, to conduct testing. The grants provide up to about $666,700 for each group over a two-year period, plus a chance at receiving additional funding on a competitive basis. The cost of testing includes not only hiring and training testers, but also employing coordinators who conduct research and analysis and prepare for potential litigation.

State Sen. Kevin Thomas (D-Levittown) said he expects the Assembly to pass the fair-housing measures approved by the Senate, which also include bills that would:

  • Remove the current $10,000 limit on punitive damages imposed by the state Division of Human Rights in housing bias cases, and allow the division to impose additional penalties up to $75,000 for multiple offenses;
  • Double the Department of State’s maximum fine for housing bias, untrustworthiness or incompetency by real estate agents and brokers, to $2,000;
  • Make it easier to hold top brokers accountable for fair-housing violations by their agents;
  • Double the amount of fair-housing training that agents must undergo to renew their licenses, to six hours every two years.

Those aren’t nothing. But they’re not really as harsh as I thought the Senators could have been.

Plus, it isn’t as if a lot of other states or the Biden Administration jumped in to deal with fair housing violations in a systematic way. If other states passed similar laws, or took similar action, I haven’t really seen much sign of that.

So I’ll give myself 0.5 for this one and say I was partially correct.

2. Opendoor + Redfin Finally Happens – NO

In the history of predictions, I think every single M&A prediction I made failed. So this year was no different. I wrote last year:

It has always made sense for Opendoor, the pioneer in iBuying, to get together with Redfin, the little brokerage who could who also happens to have the #2 or #3 web portal for real estate.

I thought 2021 would be the year it happened because Chamath Palihapitiya took Opendoor public with his Social Capital SPAC. And since Redfin was also very much in the mold of companies that Social Capital tends to support, I figured that was a marriage made in heaven.

Apparently, Eric Wu, Chamath, and Glenn Kelman all disagreed. No such marriage took place.

Instead, Opendoor emerged in 2021 as the unquestioned leader of the iBuyers (which is perhaps not as comforting as it would have been a year ago) and Redfin kept on keeping on throughout 2021.

Frankly, I think I should stop predicting M&A… if I cared about my batting average. But I don’t. Since the point of these predictions is to make people think and look at the underlying assumptions and trends. That’s always fun to do!

Still, this one was a swing and a miss.

3. Compass Rises Like a Phoenix – YES

Last year, I wrote:

My prediction for 2021 then is that Compass returns, rising like a phoenix, to make life hell for Realogy, RE/MAX, HomeServices of America, and other traditional brokerages. Opendoor did with its Social Capital SPAC merger, and I see no reason why Compass couldn’t. For both Opendoor and for Compass, the only thing that changed in 2019 was WeWork imploding, which caused Softbank to implode. None of their core businesses, none of their core strategies, none of whatever made Softbank believe in them changed. And none of what happened was their fault in any way, shape or form.

So why wouldn’t deep pocketed investors take a shot at Compass, when the housing market is absolutely insane, and Compass has as good a shot if not better than just about anybody in residential real estate in becoming a scalable business? I think they did, and I think they will.

In 2021, Compass successfully went public, showing that deep pocketed investors did indeed take a shot. And while the stock price has tanked since the IPO, from about $20 to about $10 as of this writing, fact is that Compass is still a $4 billion company who posted $1.7 billion in revenue in Q3, up 47% YOY, from a record 62,349 transactions and $69.1 billion in sales volume. Those figures were up 36% and 45% YOY respectively, a very healthy increase compared to other major brokerages like Realogy and HSA.

In 2021, Compass has the largest technology team in brokerage with over 1,500 engineers, and some $780 million in cash in the bank, and access to the public capital markets. They’re back in the conversation, and the traditional brokerages are once again talking about the aggressive recruiting that was always the hallmark of Compass.

And they are showing no signs of stopping, recently launching a Land and Ranch division, which is very smart in 2021 as their well-heeled client base is going to want to look at owning farmland and ranches away from virus and crime-infested cities.

I’d say they’re back, rising like a Phoenix, with the whole WeWork/Softbank debacle well in the rear view mirror.

4. The MLS Runs Scared Away from NAR – NO

This prediction, to me, feels like another case of being a year or two too early. That’s a common problem I have going so far out on the limb.

What I wrote last year was:

Up until 2020, it felt as if the MLS was being protected by Big Daddy NAR with its deep pockets, national presence, lobbying prowess, and large legal teams. After 2020, it feels like for whatever reason (aka, REX), the outside world has painted a big target on NAR. Now it’s starting to feel like being too close to NAR is more of a risk than a reward….

I thought that meant we’d see MLSs distancing themselves from NAR to avoid the wrath of the DOJ.

Thing is, I know for a fact that a lot of the MLS leaders and board members have emotionally distanced themselves from NAR. Quite a few people are talking about needing to move away from the blast radius of the inevitable bomb that the federales will drop on NAR.

But no one I know of took an actual step to doing that. There’s a lot of talk, a lot of smoke, but as yet, no sign of fire. It could very well happen in 2022, I suppose, and you’ll have to read my 2022 Predictions to find out if I’m sticking with this.

As of today, though, I’m gonna have to score this one a miss.

5. CoStar Builds an Empire – YES

I mean… you have to give me this one, right?

Last year, I wrote:

Entering the rental space with led to multiple further acquisitions, with Apartment Finder coming just a year later. Andy Florance has a history of building empires and quickly.

Why would we think he would behave differently in residential real estate? That would be so against character and history.

Which means… we get to think about things. Who makes sense for CoStar to acquire next?

My predictions, entirely intended to get you to think about things, was and RPR. Obviously, neither of those things happened.

However, CoStar did acquire

CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that it has reached a definitive agreement to acquire, a division of Dominion Enterprises, for $156 million in cash. is a well-recognized residential property listing and marketing portal that supports over 500,000 residential agents and brokers in the home sale process. Approximately 5 million people visit the website each month to search nearly 1.8 million residential property listings. provides advertising and marketing services to residential brokers and agents based on listing feeds that cover more than 90% of all Multiple Listing Services (MLS) subscribers in the United States.

Then in the latest earnings call, Andy Florance reported on the growing empire in residential real estate, then kind of laid out what CoStar is thinking:

Our residential business delivered strong 3Q results with our Homesnap product revenue growing almost 40% year-over-year and SaaS revenue growing almost 45%. Homesnap Pro registered users grew 15% to 777,000. Total agent subscribers to Homesnap Pro+ grew 53% to over 67,000 at the end of the third quarter. At the end of the second quarter, we repurposed approximately 60 salespeople from to Homesnap. Upon completion of their training, the group went into production in mid-July. The results have been outstanding. In their short time selling at Homesnap, transplants have generated over $5 million in annualized revenue. The average monthly reoccurring revenue generated by these new salespeople at Homesnap is about 70% higher than when they were selling at

That seems like fantastic results. The empire with Homesnap at the center is growing, organically.

Florance further reported that CoStar is putting listings from onto It’s a natural link from renting an apartment to buying a house. And that’s working: “The response to these changes has been very encouraging so far. Properties generated and sent directly to listing agent were up over 60% since we acquired compared to the same period last year.”

CoStar also inked a deal with the Real Estate Board of New York or REBNY to create Citysnap, a consumer-facing website and mobile app. That’s a direct challenge to Zillow and Streeteasy, and yet another brick in the empire building.

And of course, in the call Florance said:

In a few weeks, we’ll be attending the National Association of REALTORS Conference. The Annual NAR Conference is the industry’s largest trade show drawing thousands of residential property professionals from across the country. As we did with our customers in the apartments industry, we want our presence at this show to be a sign to residential real estate brokers and agents that we intend to partner with them and support them as opposed to trying to disintermediate them.

Boy, did he ever attend the conference. CoStar threw a gigantic party featuring Keith Urban, taking over the Gaslamp District. I didn’t go, but it was impossible to avoid all of the selfies and videos from the event from my friends who did.

And just about everywhere you turned, you couldn’t avoid the “Your Listings, Your Leads” flyers. Word is that CoStar spent something like $7 million on that evening. For a party.

I’d say CoStar is building an empire.

6. First Time Homebuyer Numbers Collapse, But Housing Market Booms – YES

So let’s be clear about this: I can’t really grade myself on this one until next year sometime, when we get some kind of report on first time homebuyer numbers. NAR’s report is from March of 2021, saying 31% of home buyers were first-time home buyers.

First-time buyers made up 31 percent of all home buyers, the same as last year. Eighty-two percent of buyers 22 to 30 years and 48 percent of buyers 31 to 40 years were first-time home buyers. Behind these groups, 22 percent of buyers 40 to 54 years were also first-time home buyers.

Thing is, that research is from a survey conducted in July of 2020. We won’t know how things worked out in 2021 until next year sometime.

Having said that, I don’t think it can be questioned that the housing market has boomed. Here’s CNBC talking about that:

The U.S. housing market has been an unlikely beneficiary from the Covid-19 pandemic.

During the pandemic, home prices have climbed at a record pace. The median price for an existing home reached over $363,000 in June 2021, a 23.4% year-over-year increase.

“You can see in just basically the last 15 months or so, we’ve seen a dramatic acceleration in home price growth to levels we haven’t seen in decades,” CoreLogic chief economist Frank Nothaft said.

However, according to most experts, the market is shaping up to look more like a boom rather than a bubble.

I mean, we’re seeing 20% YOY increases in the Case-Shiller Index. The quarterly earnings for all publicly traded real estate companies have been record-breaking with more sales, more volume, more activity, more profits… the housing market of 2021 was most definitely a kaboom.

At the same time, housing affordability has gotten crazy bad. That happens when prices go up 20% but wages stay stagnant. I know I’ve addressed this all throughout 2021, and I think we’ll be talking about this some more in the months ahead. All of the brokers and agents on the ground, all of the industry talk and concern, throughout 2021 was how first time homebuyers, particularly Millennials, just can’t compete with Wall Street hedge funds and cash buyers coming in to snap up the lower-priced homes.

In my Seven Most Interesting People post this year, I talked about the plight of younger generations, citing a study by Legal & General:

The study found, among other things, that COVID has completely disrupted Millennials housing plans:

Many Millennials just gave up on the American Dream, at least for now:

Many millennials were so disheartened by pandemic-driven housing scarcity that they completely abandoned the idea of home ownership—our general figure of 12 percent across all groups of millennials was more than twice as high (27%) when applied only to those living in suburban areas. Those who were already saving were less likely to abandon their home ownership plans. Even so, the majority of those who had already been saving for a down payment said that Covid delayed their plans. With housing prices and scarcity reaching impossible peaks during the shutdowns, many potential home buyers gave up hope. As one millennial we surveyed bravely put it:

“It is tougher to buy lately due to the pandemic. It’s a seller’s market.”

Which means that with 82% of the 22-30 year old buyers and 48% of the 31-40 year old buyers being first-timers, we should see a collapse in first time buyer numbers in 2021 when the stats are tallied sometime next year.

So I’m gonna give myself a hit here; might have to revise that to 1/2 next year but… hey, so far so good.

7. A New Professional Association Forms – NO

Well, I thought the NAR Speech Code of 2020 would result in some action from the more conservative REALTORS out there. I based that prediction partially on this:

Now, we know that real estate is often organized at the county level — MLSs are organized that way, because local REALTOR Associations are organized that way. Here then is the map of 2016 Presidential Election results by county:

(I couldn’t find a 2020 map worth a damn, since there’s still quite a bit of dispute happening about 2020.) The big REALTOR Associations, along with large regional MLSs, are in or near the blue counties, because that’s where the population is. But do brokers and agents in rural or exurban markets care whether they are in the same Association or the same MLS as the urban/suburban brokers and agents?

I was wrong. They complained, talked, made social media posts, but then did nothing. That’s kind of par for the course for the industry.

Having said that… perhaps this is yet another instance of yours truly being too early, rather than being dead wrong. So we’ll see.

But for now, I have to call this one a strike. Wrong again!


Given my record for the past couple of years, I’m gonna have to rejoice with 3.5-for-7. That’s 50% accuracy rate! It’s up infinity% over 2020 results of 0-for-7. Well, at least I can’t divide by zero so Excel can’t tell me my YOY improvement. But even with public school math, I know that 50% correct > 0% correct.

Those are Hall of Fame numbers if I were a baseball player… rather mediocre if I were a quarterback… and downright disastrous if I were a basketball player on the free throw line.

Whatever the characterization, know that even a broken clock is right twice a day. And know that I hope you enjoyed reading this annual tradition as much as I enjoy writing it. It’s not about being right or wrong; it’s about thinking beyond the surface. That conversation means that you and I have something. And for that, I’m grateful and glad.

Be safe, be healthy, and be of good cheer everybody!



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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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