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Realtors settlement brings confusion, relief to Southern California’s real estate industry

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Realtors settlement brings confusion, relief to Southern California’s real estate industry


One thing is known for sure about a proposed settlement of a massive antitrust case against Realtors: the home selling process is about to change, and with it, how buyers and sellers compensate their agents.

Otherwise, say members of Southern California’s real estate industry, it’s too soon to decipher the impact of the $418 million deal unveiled on Friday, March 15.

Also see: Brokerage stocks tumble after Realtors agree to commission-cutting deal

Will buyers now start paying their agents directly?

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Will buyers now have to sign a contract before their agent will show them any homes?

Will lenders allow buyers to roll the cost of paying agent commissions into a slightly larger mortgage?

And ultimately, will the settlement lead to to smaller commissions and lower home prices?

Also see: Homebuying’s 6% commission is gone after Realtors settle lawsuit

“There’s just a lot of moving pieces that have to be settled,” said Art Carter, chief executive of the Chino Hills-based California Regional Multiple Listing Service, which covers much of Southern California. “And I’m not going to say I have my arms around every one of those moving pieces.”

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In a statement announcing the settlement, the National Association of Realtors said it agreed to a new rule banning sellers from offering compensation to buyers’ agents through a Realtor-affiliated MLS, or home-listing database.

But it was unclear if that will end the decades-old practice of requiring sellers to pay buyers’ agents.

While “offers of broker compensation could not be communicated via the MLS,” the NAR statement said, “they could continue to be an option,” so long as they’re communicated outside the MLS.

“The only certainty I can give you is the process will change,” Carter said.

The Realtor announcement followed an Oct. 31 jury verdict in Kansas City awarding nearly $1.8 billion to Missouri home sellers, finding the current agent compensation system perpetuates the 5-6% commission rate.

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More than 20 similar lawsuits proliferated across the nation in the wake of the verdict, including at least three in California, naming more than 200 other industry groups in 11 states as defendants.

 California Realtor groups hit with copycat commission rates lawsuit

Under the settlement announced Friday, NAR would pay $418 million over four years, instead of $1.8 billion. The settlement would cover more than a million NAR member agents, all state and local Realtor associations, Realtor-owned multiple listing services and NAR-affiliated brokerages generating less than $2 billion in sales. But large national real estate chains that were NAR’s co-defendants won’t be covered.

A law firm that took part in the settlement hailed the agreement as “groundbreaking,” saying it could save consumers billions of dollars in broker fees.

“This settlement changes (NAR) rules so that competition will occur at the commission level,” Steve Berman, a lead attorney in the case, said in a statement.

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In Southern California, the announcement led to a combination of confusion, anxiety and relief.

Carter, the regional MLS CEO, tried to explain the settlement Friday to a meeting of brokers in Arcadia.

“I think there’s just a lot of confusion,” he said of the brokers’ reaction to the news. “They’re just curious to see what the new normal is going to look like.”

There was an element of relief at the Glendale Association of Realtors, one of 19 local Realtor associations named in a class-action lawsuit filed in January.

The settlement appears to be “a good start, a step in the right direction,” said David Kissinger, Glendale Realtors association chief executive.

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“We are in defendant in one of the cases,” Kissinger said. “And as a defendant in a case, … that’s concerning. There is substantial risk to us. We were certain in the belief that the case did not have merit. But, you know, the court and the jury are going to do what they’re going to do.”

Carter echoed that sentiment.

“We support NAR for taking the steps” toward settling the cases. “If it would have been litigated further, it could have been quite detrimental to the the industry.”

The proposed effective date will be July 1 if the settlement gets court approval, although that — like everything else — is subject to change, Carter said.

If approved, the settlement could lead to the widespread use of buyer-broker agreements, he said. Currently only about a fifth of buyers sign representation agreements with their agents.

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It’s possible sellers could list an amount for concessions in their MLS listings, instead of compensation offers, and buyers could use those concessions as they choose — perhaps paying for repairs, for closing costs or to compensate their agents, Carter said.

“The (agent’s) job is going to change significantly,” said Newport Beach broker Bill Cote, owner of Cote Realty Group. “I think you’re going to see a whole element of people come out and say that they are buyers brokers, and they’re only representing buyers. But the difficulty with that is getting the buyers to step to the plate to say that they’re going to pay the compensation to the buyer’s broker.”

Cote noted that in high-priced communities, from Newport and Laguna Beach to Silicon Valley, the buyer’s share of commissions “has always been very large.”

Ed Coulson, director of the Center for Real Estate at UC Irvine, predicted the settlement could have a major impact on agent earnings and commission rates.

People accepted 5-6% commission rates as if it were a rule, which it’s not, he said.

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“One of the things that’s going to happen is people will recognize it’s not a rule, and that’s going to bring commission rates down,” he said. “I think the thing that is most important is we don’t know the impact on prices. There’s been a lot of speculation it would lower house prices, but that depends on the seller folding the commission into the house price. And I’m very uncertain that we know the extent to which that happens.”



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Antisemitic incidents in California have skyrocketed, Jewish leaders say

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Antisemitic incidents in California have skyrocketed, Jewish leaders say


SACRAMENTO – As protests continue to erupt across the country, Jewish leaders in Northern California say the rate of antisemitic incidents has now broken records.

Universities across the nation have become ground zero for people protesting the Isreal Hamas war.

At Columbia, classes have moved to online learning to keep students safe, barricades have gone up around New York University, and at Yale, things have reached a boiling point.

Tensions on campuses have led to concerns about harassment and safety for the schools’ Jewish communities.

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“So they started taunting me and giving me their middle finger and yelling in my face. And until one of them waved his Palestinian flag in my face and then jabbed me with it in my left eye,” said Sahar Tartek, the editor-in-chief of the Yale Free Press.

“It’s something that the Jewish community feels viscerally in a way that antisemitism hasn’t been felt in a long time,” Mark Levine said. 

Levine is the director of the Anti-Defamation League Central Pacific Region. He says the number of antisemitic incidents has skyrocketed in California.

“We have the highest spike in antisemitism compared to anywhere else nationally. It soared across the U.S. by about 140%. Here in Northern California – a 202% increase,” Levine said.

Pro-Palestinian protestors clashed with police on the campus of Cal Poly Humboldt this week.

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Earlier this month, a legal complaint was filed against UC Davis, alleging antisemitism in the classroom and out around campus.

When asked about recent protests, President Joe Biden denounced antisemitism but said people also need to think of the Palestinian community. 

“I condemn the antisemitic protests, that’s why I’ve set up a program to deal with that. I also condemn those who don’t understand what’s going on with the Palestinians,” Biden said.

Some colleges have started to give protestors a deadline to move out. But will they remain? 

“You can criticize a government but still support a country’s right to exist but I think far too many people are saying maybe Israel doesn’t have a right to exist,” Levine said.

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The ADL has a heat map that tracks certain hate crimes on its website.



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Map shows new California high-speed rail routes

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Map shows new California high-speed rail routes


A series of maps show the full extent of California’s proposed high-speed rail routes that would provide an efficient and quick way of travel between the state’s major cities.

Renewed interest has surfaced in high-speed rail travel after Brightline West, a new all-electric, 218-mile rail line bringing passengers from Las Vegas, Nevada, to Rancho Cucamonga, California, broke ground on Monday after construction was delayed for several years.

The project is expected to be completed before the 2028 Olympics in Los Angeles. The California High-Speed Rail Authority has another rail line planned that would provide a trip from San Francisco to Los Angeles in less than three hours, but progress has been slow.

A rendering of the Brightline West high-speed rail under construction in southern California. The California High Speed Rail Authority is planning a statewide project that would take passengers from San Francisco to Los Angeles in…


Brightline West

According to maps on the Rail Authority’s website, the proposed high-speed rail line would traverse three regions—northern, central and southern California.

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“The Phase 1 system will connect San Francisco to the Los Angeles basin via the Central Valley in under three hours on trains capable of exceeding 200 miles per hour,” the website said. “Phase 2 will extend to Sacramento and San Diego.”

A spokesperson for the Authority told Newsweek that the project is at an “exciting time.” There are 171 miles of rail line under construction, and there is environmental clearance for 422 miles.

“In the last year alone, the Authority has been awarded $3.3 billion in new federal funds to advance the work on the initial operating segment between Merced and Bakersfield, signifying a renewed federal partnership,” the statement said.

Map showing high speed rail California
The map showing the total completed route for a high-speed rail line from San Francisco to San Diego.

California High Speed Rail Authority

Northern California project

There are two legs to the northern California project. Phase 1 involves creating a high-speed rail line from San Francisco to Merced, with stops in between at Millbrae-SFO, San Jose and Gilroy. Phase 2 would bring travelers from Sacramento to Merced with stops at Stockton and Modesto.

For the San Francisco to San José leg of the journey, the Authority plans to introduce high-speed rail service to the Caltrain corridor. Environmental clearance was completed in 2022, and construction of the Caltrain electrification is under way.

Environmental clearance also was completed for the San José to Merced leg.

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“Electrifying the existing rail corridor from San José to Gilroy will modernize the rail corridor for electrified high-speed rail service and allow Caltrain to extend electrified service to southern Santa Clara County,” the website said.

Northern California route
The northern leg of the high-speed rail route from San Francisco to Merced.

California High Speed Rail Authority

Central California project

The middle stint of the statewide project travels from Merced to Bakersfield with rail stations at Fresno and Kings/Tulare. Construction is most promising in this segment.

“The electrified high-speed rail line between Merced and Bakersfield is the first building block of the statewide system. This 171-mile line will offer the nation’s first true electrified high-speed rail service,” the Authority said on its website.

The spokesperson told Newsweek that this leg of the project is expected to be completed by 2030 to 2033.

Central California route
The central leg of the high-speed rail route.

California High Speed Rail Authority

Southern California project

The southern California stint also involves two phases. Phase 1 would bring travelers from Bakersfield to Anaheim with stops in Palmdale, Burbank and Los Angeles. Phase 2 would travel from Los Angeles to San Diego with stops at San Bernardino and Riverside. The southern California map also shows the Brightline West route.

Southern California route
The southern leg of the high-speed rail route.

California High Speed Rail Authority

The statewide project has been plagued with delays and price jumps. Voters approved the project in 2008, KTLA reported, with Phase 1 taking travelers from San Francisco to Los Angeles. At the time, the project was anticipated to be operational by 2020 and cost $33 billion.

Four years past the deadline, the project is still far from being completed and the price has jumped to $128 billion.

“The full Los Angeles to San Francisco line completion date is contingent on federal funding,” the spokesperson told Newsweek.

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According to a U.S. House testimony by Lee Ohanian, a UCLA professor and Stanford University fellow, California began its journey to high-speed rail in 1993 by creating the California Intercity High-Speed Rail Commission. Three years later, the commission was replaced by the California High-Speed Rail Authority.

“California’s HSR project has little to show over this 30-year period. The project is significantly delayed, and its budget has increased to about four times its initial cost. Some of this is due to mistakes in planning, management, oversight, and accountability,” Ohanian testified.

“But other factors reflect more endemic challenges in building HSR, including limitations in understanding the scope and size of the problems and risks that can arise in such a major infrastructure project.”

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

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California map reveals areas with most high school dropouts

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California map reveals areas with most high school dropouts


A map shows which counties in California have the highest percentage of high school dropouts.

To determine which counties had the highest percentage of dropouts, Newsweek analyzed the latest data from the U.S. Census Bureau which tracked the number of residents 25 and over with at least a high school diploma.

The analysis found that Monterey County had the highest percentage of high school dropouts, at 27.3 percent.

That was followed by Colusa County with 26.7 percent, Madera County with 26.4 percent and Merced County with 25.7 percent. Imperial County has 25.5 percent.

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The counties with the highest number of high school graduates were all in northern California. Placer County had the lowest dropout rate, with just 4.4 percent. Other counties—including Trinity, Nevada, Shasta and Plumas—all had fewer than 6 percent.

Newsweek previously reported that California, the nation’s most populous state, ranks at the very bottom of U.S. states when it comes to the number of high school diploma holders. Just 84.7 percent of California residents aged 25 or over have graduated from high school, according to 2022 Census data.

However, the latest data from the California Department of Education has shown that students are graduating from high school at higher levels than before the COVID-19 pandemic.

The graduation rate for the class of 2023 was 86.2 percent—down about a percentage point from the previous year, but still higher than pre-pandemic levels.

The data was “encouraging,” State Superintendent of Public Instruction Tony Thurmond said in December, but “our work is not complete.”

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California Map Reveals Areas With Dropouts

Photo Illustration by Newsweek

“We have made an unprecedented investment in services that address the needs of the whole child,” Thurmond said. “We can see that those efforts are paying off, but this is only the beginning. We need to continue providing students with the tools they need to excel, especially now that we are successfully reengaging our students and families, so we can close gaps in achievement in the same way that we have begun to close the equity gaps in attendance and absenteeism.”

Students across the country have been absent at record rates since schools reopened during the COVID-19 pandemic, adding further challenges as schools work to help students recover from huge learning setbacks.

Those who end up dropping out of high school could face adverse consequences well into adulthood, according to Jennifer Lansford, a research professor of public policy at the Sanford School of Public Policy at Duke University.

“The long-term consequences of dropping out of high school can be very negative for individuals who drop out, their families, and society as a whole,” Lansford told Newsweek.

She pointed to research that she and colleagues carried out using data from children that were followed from the age of 5 until 27.

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That research found that individuals who dropped out of high school were nearly four times more likely to be receiving government assistance, were twice as likely to have been fired two or more times, and were more than three times more likely to have been arrested since the age of 18.

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.



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