CRMLS CEO Art Carter sees more industry litigation ahead, AI blindspots

For decades, California Regional MLS (CRMLS) has stood at the center of one of the nation’s most complex and influential real estate markets.

As CRMLS CEO, Art Carter navigates the organization through unprecedented market conditions, industry consolidation and the rapid rise of artificial intelligence (AI), he’s keeping a steady eye on what matters most; helping brokers and agents adapt.

Carter will be a speaker this coming Tuesday at HousingWire’s AI Summit. He and Tim Dain, president and CEO of NorthstarMLS, will discuss how MLS infrastructure is evolving for the AI era.

Before making the trip, Carter shared insight on the regulatory landscape in California, trends flying under the radar in micro markets, the AI transformation he believes the industry is ignoring at its own peril and why he thinks more litigation is on the horizon.

Editor’s note: This interview has been edited for length and clarity.

Jonathan Delozier: California is often at the forefront of policy changes. How do you see CRMLS helping agents adapt to evolving regulations — whether it’s buyer representation requirements, disclosure expectations or other issues on the radar?

Art Carter: Obviously, there’s been a lot of change in the industry. Unfortunately, we’re going through an unprecedented market and that is [causing] a lot of pressure on the brokerage community. You’re seeing consolidation. The main thing is to delineate and separate between what’s noise and what’s real.

More specifically, with the multiple listing service as a platform, there are risks that as these brokerage communities get larger — and there is a concentration of resources — they could take their ball and go home. I don’t think that’s in anybody’s benefit. You’ve got to go 50 brokers deep to get to 50% of my marketplace. We’re firm believers that brokers are better working together to serve buyers and sellers, and that a transparent marketplace is a key thing — where we continue to try to keep everybody moving in the same direction.

Delozier: With CRMLS serving such a diverse mix of markets in California — luxury along the coast, Inland Empire, Central Valley, etc. — what trends are you seeing in individual markets that might be flying under the radar, and what trends are universal?

Carter: The universal trend is that interest rates are having a significant effect on sales. It is ostensibly moving more towards a buyer’s market, but we’re just not seeing the price depreciation that you typically see. That’s the part that’s unprecedented.

That being said, you get some of these micro markets that are not facing the same pressures. They’re still getting multiple offers. The interest rates are not driving down interest and the movement of properties. That’s really the disparate way that things are happening across the board. You would think that a rising tide would float all boats, and a sinking tide would do the same thing, but it’s really dependent upon the marketplaces in which you’re participating.

Delozier: With CRMLS expanding access to tech and new tools and reports, what’s proving most useful for agents on a day-to-day basis and what kind of results are you seeing?

Carter: We’ve got a couple of new products out to the membership. We’re in the process of building some AI integration tools for our membership. That’s one of my biggest disappointments in this industry — that all of the noise is really distracting everyone from paying attention to the one thing it should be paying attention to, which is AI.

There are transformational things going on right now that most people in the industry are not paying close enough attention to. Most of them are dabbling on one side and playing around with the LLMs, but there’s just not enough attention to the way that Wall Street is falling in love. SaaS companies are being devalued, and AI companies are the new darlings, and nobody in the MLS industry is paying close enough attention to that.

Delozier: Could real estate SaaS companies become almost a thing of the past in five to 10 years, replaced by more general-use AI tools?

Carter: I’m not a believer in doomsday predictions for the MLS industry, agents or brokerages. This industry is so resilient — it will adapt and it will find those niches. Homeownership and buying and selling your house is still the most significant transaction any American will enter into in their lifetime. Paying attention to some of the surveys I’m seeing, even the younger generations are not all that comfortable with allowing AI to handle that whole entire transaction.

I was on a bus with a venture capitalist, and he was talking about how he felt that agentic AI models would take the agents out of the equation. I just don’t believe that. Obviously, AI is going to change the way that brokers and agents work, but there is still that human element that is going to have to be a necessity as we move forward.

I think there’s some ways that AI can enhance human interaction, but I think that’s where we’ll end up defaulting to. AI will be a human interaction enhancer, not a replacer.

Delozier: A popular refrain is that regulation and government red tape are the only things really holding back housing affordability. What do you think when you hear that, and what do you think is the real cause of lack of affordability in California?

Carter: It’s true. You look at the Inland Empire here — we do have land, but knowing that regulations can put upwards of $100,000 of cost on every door built — I haven’t looked at the latest figures out of the building association, but those numbers are crazy. California needs to do a better job. The act that was just allowed to pass into law, I think will have a significant impact. The fact that you can now not have to pay taxes on more of your capital that you’ve earned over a period of time — hopefully more and more people will take advantage of that, and it will loosen up the chains that are holding inventory now.

Delozier: Looking ahead three to five years, what’s going to be the continued value proposition for not just CRMLS but any MLS, with the increased sophistication of portals and models that seem to be trying to unseat the MLS?

Carter: It’s probably a controversial statement, but I’m going to say it anyways. I think this industry is headed for more litigation. I would have hoped that it would have learned a very painful lesson out of the Sitzer case, but I think that as time moves on, we’re starting to hear more individuals talking out against private listing networks and some of the movement to hide pieces of data from the consumer. I think, unfortunately, litigation will occur out of that. Is it going to be next year? I don’t know, but I think in the next three to five years we will see those cases pop up.

Delozier: Even through that, what’s going to be the way to tell people the MLS is still important five years from now?

Carter: I go back to my marketplace, where you’ve got to go 50 brokers deep to get to 50% of the market. That clearinghouse — that transparent clearinghouse where brokers can cooperate with each other to bring buyers and sellers together — is still just as important today as it was 100 years ago when the first MLSs started popping up.

I don’t ascribe to this thought process that we’re all dead. Obviously, there needs to be [fewer] of us. There needs to be change, and we need to start weighing both sides of the equation — buyers and sellers and those brokers and agents who represent them. I feel confident that we will thread that needle, and we’ll figure out a way to continue to service people.