BrokerPulse

RealTrends Q32021 BrokerPulse sees brokers still optimistic about the market, wary of competition and wondering when inventory will rise.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

Knock.com’s Sean Black on the transaction revolution

Real estate is on its third revolution, from the digital revolution of the early 2000s to the information revolution kicked off by Trulia and Zillow to today's transaction revolution.

Newsletter

The RealTrends BrokerSource and HousingWire OpenHouse newsletters deliver twice weekly information on trends, strategies, analysis, people, and news shaping the real estate industry.

Year-End Numbers: National Real Estate Firms Have Varied Growth

High-level thoughts about the year-end numbers of national brokerage firms.

We’ve reviewed the results from publicly held companies Realogy, Redfin, RE/MAX, and Zillow that have released their year-end numbers as of this writing.

We’ve also looked at sales results for eXp, Compass, and other national firms such as Keller Williams, from which we have year-end sales data.

Here are some high-level thoughts:

Redfin and Zillow are growing their top-line revenue numbers mainly through adding the dollar value of the homes they’re buying to their revenues. Not all of the growth comes from this source, but a significant part of it does. While they’re growing their top-line revenues, they also see material increases in their operating losses. Their statements appear to prepare their investors for more years of such performance.

Realogy and RE/MAX continue to experience flat growth on their top lines and mixed results on their earnings, which were mostly down in 2019 from the prior year. Both indicated that they’re beginning to see some future growth potential from internal restructuring. Both are struggling to reignite agent growth and productivity in their United States operations.

Keller Williams reported that its agent count was relatively flat but that its aggregate sales in terms of units and volume were up more than the market for 2019 over 2018, which may indicate a slight change in sole focus on recruiting to a balanced approach in recruiting and productivity. They also showcased the increased involvement of their agents on their Keller Cloud platform.

Compass and eXp both showed material growth in their agents, transactions, and sales volume comparing 2019 to 2018.

What Do These Results Mean to You?

There are a few surprises. We know that Zillow and Redfin are focused on broadening the services they offer. They are aware that their iBuyer programs are where they’re placing some big bets.

What’s surprising is how these programs are negatively impacting their financial results and, unless corrected, will likely be reduced somewhat.

Most brokerage firms are aware that incumbents, like some Realogy brands, RE/MAX, and even Keller Williams, are not growing their agent counts or total transactional volumes as they once did. The question is: What will they do to reignite growth in this area? And, how might that differ from their past strategies and tactics?

It’s no surprise that eXp and Compass are growing far faster than most of their competitors in terms of agents, transactions, and sales volume. While Compass had a significant growth year, a material portion was due to acquisitions made mid-year 2018 and early 2019. What will their organic growth look like absent other large brokerage acquisitions? While eXp had a solid growth year, their agent growth in 2019 was slightly less than their agent growth in 2018. What will it look like for 2020, and can they get back to their growth rates of 2017-2018?

Most Popular Articles

Where is the housing market headed?

Rising incomes, low interest rates and all other factors, including the balance between families looking for housing and the availability of housing, point towards a continuation of the strong housing market of the last 15 to 18 months.

Oct 18, 2021 By

Latest Articles

Climate migration driving more buyers to Burlington, VT

An influx of buyers from California, Colorado, Florida and the tristate area are looking to buy in Burlington, Vermont. There’s just one problem: there’s hardly any inventory.

Oct 23, 2021 By