President and CEO, Redfin
Overall Rank: 5
After a successful IPO in 2017, Kelman and Redfin, the tech-centric discount that Kelman has run for a decade, continue to impress more and more every year. With some very powerful real estate leaders retiring in 2019, Kelman joins for the first time the ranks of the industry’s top five most powerful people.
2018 continued a growth trend first made public in Redfin’s 2017 S-1 IPO paperwork. The firm’s revenue of $362.8 million through the first three quarters of 2018 reveal a 32.3 percent increase from the same period a year previous. The organic growth of its core real estate business drove this increase, while acquisitions accounted for gains at many other brokerages. Despite the topline revenue growth, the company’s net loss over the same period dropped to $29.8 million from a $13.2 million net loss the year previous.
Stats from Redfin’s third quarter 2018 financial filing reveals more details of its growth. They include:
- 41,991 closed transactions through the first three quarters of 2018 (up 21.9 percent from the same period a year previous, with 8,859 transactions completed by partner referral agents at other brokerages).
- $20 billion in sales volume through the first three quarters of 2018, up 25.5 percent from the same period in 2017.
- An average of 29.2 million monthly unique visitors in the third quarter 2018, up 34.2 percent from third quarter 2017.
- An estimated US market share of 0.85 percent in the third quarter 2018, up from 0.71 percent in the third quarter 2017.
These numbers, and other 2017 trends, suggest that Redfin will end the year as the nation’s fourth largest brokerage by annual sales volume, behind NRT, HomeServices of America and Compass. When the 2019 Mega 1000 rankings are released in April, the industry will know for sure if these initial estimates hold.
The firm closed 12,876 transactions in the third quarter 2018 with just 1,397 lead agents. That comes to an average of 9.2 transactions, $100,397 in commission revenue and $30,283 in gross profit for each agent that quarter. This is a very impressive achievement. There is no other North American brokerage with over 100 agents that can boast that an average agent does forty house transactions per year. Redfin achieves this as a discount brokerage, offering 1 percent listing fees in many markets and buyer rebates. The company also disclosed in its third quarter 2018 financial statement that its Direct Buyer (iBuyer) program, Redfin Now, has been successful enough to have Redfin make a long-term commitment to it.
Perhaps buoyed by a promising 2018, Kelman revealed in the third quarter 2018 that Redfin plans to spend between $40 and $60 million on consumer advertising and branding in 2019. This echoes Zillow’s foray into mass media advertising in 2013 and is most likely an indication of big year for the company.
Kelman entered real estate twelve years ago as a software engineer and raised $12 million to build a discount real estate website. Previously, he co-founded Plumtree Software, which he helped take public. When he became CEO at Redfin, he thought it would be just another funding experience, but over time has decided that building a consumer-centric brokerage is his life’s calling. Raised in Seattle, he graduated summa cum laude from the University of California, Berkeley.
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