The big in residential real estate are getting bigger, taking a larger piece of the pie, and rapidly making the industry more concentrated, mature and consolidated, largely driven by outside investment. This has resulted in more public real estate brokerage and tech companies and overall bigger players.
It’s easy to discuss and see the trend, but looking at the numbers provides a sense of the extent of the change and its rate, two factors that shine a light on just how rapidly the shift is occurring and what it will look like.
T3 Sixty’s just-released Enterprise 20 report provides unique insights not available with other data. To build the report, T3 analyzes and ranks the nation’s 20 largest enterprises – which include both a company’s franchise and brokerage wings – and the nation’s 20 largest franchise brands. Each ranking lists companies and brands by 2020 calendar year sales volume, transaction sides and agent count.
In 2020, the nation’s 20 largest enterprises by sales volume accounted for 54.9 percent of the nation’s existing homes sales volume, using NAR existing home sales numbers for the total market and T3 Sixty research for respective company. This is up from 52.8 percent in 2019 and 51.4 percent in 2018. From 2018 to 2020, the top 20 enterprises grew their U.S. home sales volume market share by 6.9 percent.
Just the five largest real estate enterprises by annual sales volume in 2020 – Realogy Holdings Corp., Keller Williams Realty, RE/MAX, HomeServices of America and Compass – accounted for 42.4 percent of total existing home sales volume in 2020.
The nation’s largest real estate brokerage companies are hoovering up an increasing amount of the industry’s business at a faster rate. Technology, and the enormous amounts of capital invested into the industry in recent years, is driving the largest companies to record sizes.
Enterprises, also known as holding companies, have differing structures. Realogy and HomeServices of America, for example, manage both company-owned brokerage operations as well as franchise brands; others such as Keller Williams Realty and RE/MAX operate just as a franchisor, and others such as Compass just have company-owned brokerage operations.
Franchise brands have played a huge role in the industry since they emerged in the early 1970s with the debut of Century 21 Real Estate, ERA Real Estate and RE/MAX. Since then, they have become a staple of the industry. Brands are owned by real estate franchisors, who do not provide brokerage services directly to consumers, but own trademarks, products, intellectual property and business systems and license them to brokerage companies.
Among the nation’s top 20 franchise brands by sales volume, Keller Williams Realty retains its No. 1 rank with $387.6 billion in annual sales by brokerages that operate under the brand, followed by RE/MAX with $294.2 billion, Coldwell Banker Real Estate with $265.4 billion, Berkshire Hathaway HomeServices with $139.26 billion and Sotheby’s International Realty with $135.1 billion.
These top five brands also saw strong year-over-year sales volume increases, ranging from 8.8 to 32.1 percent, another example of how real estate thrived in a pandemic year that throttled many other industries.
T3 Sixty invests hundreds of hours each year to uncover the industry’s best data, to determine facts that lead to important insights, which lead to better business decisions. Keep track of the residential real estate industry’s best data with T3 Sixty and the extensive research of the entire industry every year through the Real Estate Almanac (realestatealmanac.com.)