New York’s real estate market is entering a new chapter, not because of prices or interest rates, but because of a legal shift that’s rewriting how homes get bought and sold across the country. For decades, the way real estate agents got paid was baked quietly into the price of a home. That’s no longer the case, and the ripple effects are reaching further than most buyers or sellers realize.
⚖️ The Commission Lawsuits, Explained Simply
It started with a 2023 court case known as Sitzer/Burnett, where a jury found that real estate agents had been charging inflated commissions in a way that violated antitrust law. The case triggered a wave of copycat lawsuits across the industry, naming major brokerages including Compass, Redfin, Douglas Elliman, and others.
This month, those settlements cleared another major hurdle. Federal appeals courts upheld both the original Sitzer/Burnett settlement and the related Gibson case, bringing the combined recovery for affected home sellers to more than a billion dollars. The court rejected every objection raised, including arguments that buyer and seller claims should have been treated separately.
The practical result is already visible in how homes are bought and sold today. Buyer-agent commissions no longer have to be posted on MLS listings, and buyers are now expected to sign written agreements with their agents before touring homes, agreements that disclose exactly what that agent will be paid. These aren’t proposed reforms. They’re already in effect nationwide.
🗽 Why New York Is a Special Case
New York carries its own wrinkle in this story. A group of objectors specifically argued that REBNY, New York City’s independent real estate board, should not have been folded into the same settlements as the National Association of Realtors, since REBNY operates outside NAR’s structure.
The appeals court disagreed. The panel’s reasoning was that what mattered most wasn’t which specific MLS or geographic market was involved, but the underlying relationship between commission rules and inflated housing costs, a relationship the court found applied just as much in New York as anywhere else.
That ruling didn’t fully close the door. Two objectors filed for a rehearing in early September, keeping a narrow thread of the NYC-specific argument technically alive, even though the broader settlements have now cleared two rounds of appellate review.
Meanwhile, New York’s housing market has its own momentum. Statewide, prices are up modestly year over year, and conditions are being described as reasonably balanced. NYC itself is more nuanced. Inventory is improving gradually but remains below historical norms, so it isn’t cleanly a buyer’s or seller’s market yet. Many industry voices expect 2026 to be a genuine rebound year for the city, with newer luxury development leading price growth while older, higher-carrying-cost properties lag behind.
🏘️ What This Has to Do With Ark7
Fractional real estate platforms like Ark7 sit outside this litigation entirely. Ark7 is regulated as a securities offering under SEC rules, not as a brokerage operating under the MLS and commission structures the lawsuits targeted, so there’s no direct legal exposure here.
That said, a few indirect connections are worth understanding. Lower or more negotiable commissions industry-wide can modestly ease the cost of acquiring properties in the first place, since platforms like Ark7 still have to purchase homes before fractionalizing them for investors. It’s a small tailwind, not a dramatic one, but it points in a favorable direction for acquisition economics across the sector.
There’s also a broader narrative shift underway. This litigation put a public spotlight on opacity and inflated fees baked into traditional real estate transactions. That’s a natural contrast point for a platform already built around transparency, one where investors can see exactly what a property costs, how it performs, and what they’re paying for, without hidden commission structures to untangle.
🌎 Why Markets Outside NYC Often Fit Better
New York City’s expensive, luxury-and-co-op-heavy market doesn’t naturally fit the fractional single-family rental model as well as other regions do. Markets with more affordable entry prices and healthier rental yields, many of them in the Sun Belt, tend to align more closely with how this investing model actually works.
Those same markets also currently carry fuller regulatory clarity on commission practices, since they aren’t touched by the residual NYC-specific legal thread still working its way through the courts. Neither factor is decisive on its own. Market fundamentals matter far more than any single lawsuit. But together, they’re a reminder that the markets already best suited to fractional investing also happen to have the cleanest regulatory footing right now.
💡 Positioning Your Portfolio with Ark7
As the rules governing traditional real estate transactions continue to evolve, Ark7’s model stays the same: transparent, property-level investing without the friction the rest of the industry is only now being forced to address.
Curious what this looks like beyond the headlines? Explore Ark7 properties across different U.S. markets.
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Today’s Factional
We are pleased this monumental change to the real estate system has been upheld. This case shows the power of class actions to return real benefits to everyday people, and to correct systemic harm to consumers.
-Steve Berman, Managing Partner and Co-Founder of Hagens Berman
