Trading volume The past seven years paint a fascinating picture of disruption.
- During that time, we’ve seen eXp Realty and Compass grow exponentially, going from zero to the top in terms of transaction volume and sales.
- At the same time, two current leaders (Anywhere and HSoA) went from being completely dominant to being overtaken by these two disruptive startups.
Agent migration mode Dealers continue to flock away from the big legacy brands in favor of less expensive models (and Compass).
- In the current economic downturn, the lure of low-fee brokerage is simple: Agents get to keep more of their commissions.
- This comes at the expense of large legacy brands like RE/MAX, HomeServices of America, Anywhere and Keller Williams, which combined will lose more than 19,000 agents in 2023.
This is another way View the same data that helps illustrate the perspective relative to each company’s size.
Zoom in on agent movement The partnership between Keller Williams, RE/MAX and eXp Realty highlights continued brokerage flow.
- According to third-party data from hundreds (but not all) MLS, 1,627 agents migrated from eXp to KW during 2023, while 3,099 agents moved in the opposite direction, for a net increase of 1,472 agent pairs eXp is beneficial.
- Likewise, 388 agents moved from eXp to RE/MAX during the year, while 897 agents moved in the opposite direction, a net increase of 509 agents in favor of eXp.
comes with shifts There has been a fundamental shift in the efficiency of the brokerage business model in terms of the number of transactions and agents.
- Keep in mind that eXp is the largest brokerage by trading volume and its operating expenses (OpEx) per trade are one-fifth that of peer brokerages.
- Even Redfin, which represents an efficient, technology-driven brokerage model, has a cost structure closer to that of an incumbent than a disruptor.
What to see: The results bring to mind an out-of-context but still relevant quote from Gary Keller: “We lose so slowly that we think we’re winning.”
- But it’s not as simple as winners and losers, and each number tells part of the story, not the whole story.
- For example, despite losing the most agents in 2023, Keller Williams is still outperforming the market – so context is key.
bottom line: In a recent talk at Inman, I broke down Netflix vs. Blockbuster in real estate and how the receding tide reveals business model resilience and clues about future growth.
- The key message here is less about winners and losers and more about learning.
- This is a transformative time for the industry and now is an opportunity to stop, step back, critically evaluate and use this moment to become smarter – what can you learn?
Mike Delprete is strategic advisor Global experts in real estate technology, including iBuyer offer aggregator Zavvie.contact him LinkedIn.
