Trends 2024: Big brokerages are scooping up more deals
The largest firms are claiming an increasing number of sales, driven in part by fast-growing companies like Compass and eXp.
Editor's note: Since 2006, the Swanepoel Trends Report has provided in-depth research and analysis to help leaders understand the forces shaping residential real estate. This exclusive series of excerpts highlights each trend featured in the 2024 report, which was released in November 2023.
Real Estate Facts: Data provides a foundation for decision making, and that's especially true in the real estate industry. Understanding shifts in the market — and among competitors — can help leaders decide if it's the right time to invest or cut costs, to expand or merge, to hire or downsize.
This excerpt looks at one telling data set: the sales volume, transactions and market share of the industry's biggest brokerage firms.
Large brokerage dominance
The 1,000 largest brokerages do an outsized portion of the real estate industry's sales volume. In 2022, the nation's 1,000 largest brokerages accounted for 58.8 percent of total US sales volume, using NAR's existing home sales data as a basis for national sales volume. That leaves just 42.2 percent for the remaining brokerages, estimated to number more than 100,000, according to T3 Data.
The 100 largest brokerages accounted for over a third (37.5 percent) of the industry's total sales volume in 2022, while the 10 largest brokerages accounted for a nearly a quarter (24.0 percent) of total US sales volume.
Not only is an increasing share of sale volume concentrated among the largest brokerages, but the latest data shows that the biggest players also complete a growing share of transactions.
The 1,000 largest brokerages accounted for 45.0 percent of all transactions in 2022, up from 36.3 percent in 2017. Moreover, the nation's 100 largest brokerages completed more than a quarter of the industry's transaction sides in 2022, up from 17.5 percent just a few years earlier.
Bigger brokerages, more growth
The nation's largest brokerages significantly outpace the market in terms of growth. The top 5 segment of the Mega 1000 saw an increase of 119.7 percent in sales volume, the largest growth in sales volume between 2017 to 2022 among all Mega 1000 segments.
Mega 1000 brokerages, as a whole, saw sales volume increase 66.1 percent from 2017 to 2022, more than double that of the market as a whole.
Bigger brokerages, more market share
Production is increasingly concentrated among the nation's largest brokerages. For example, the five largest brokerages increased their sales volume market share by 69.3 percent between 2017 and 2022, larger than any other Mega 1000 segment and more than double the Mega 1000 as a whole.
The meteoric rise of Compass (which jumped to No. 1 in 2022 thanks to its huge acquisitions) and eXp Realty (with its revenue-sharing practice that fuels outsized organic growth) contributed greatly to this rise.
Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.