Stubbornly High Fees & Other Consumer Harm
Buying real estate, particularly less liquid, high-end real estate, in a buyer beware state like Massachusetts is tended to with a high degree of risk. The fact that buyers and sellers are expected to navigate these risks in the context of a well established oligopoly stacks the deck against them.
An oligopoly is defined as a state of limited competition in which a market is shared by a small number of producers or sellers. It’s generally accepted that when four or fewer market participants control in excess of 50% of a market, an oligopoly exists. In the Back Bay & Beacon Hill luxury real estate market, the four largest brokers control 78% of the market.
The market dominance of the oligopoly is underscored when you consider that the fifth largest broker has a market share of just 2%. We’re defining luxury as properties that sold for $3 million and up. For the trailing 12 months ended September 30, 2021, there were 101 sales representing over $1.2 billion in transaction volume.