This article was shared here with the permission of Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.
The first quarter of 2023 saw a variety of winners and losers in terms of brokerage agent count – the numerical manifestation of agent recruitment and retention.
Why it matters: As I’ve previously asserted, agents are central to the real estate transaction; growth in transaction volumes goes hand in hand with growth in agent count, because agents sell houses.
Dig deeper: Disruptive, low-fee brokerages like eXp Realty, Real Brokerage, United Real Estate, and RealtyOne all added agents during the first three months of the year.
- Meanwhile, some of the largest incumbent brokerages and franchises — Keller Williams, RE/MAX, and Anywhere — all lost agents.
The five largest brokerages and franchises in this list — Anywhere, Keller Williams, RE/MAX, Compass, and eXp Realty — account for over 427,000 agents, down 1.1 percent from the previous quarter.
- Among them, only eXp Realty grew its agent count from the last quarter.
- Redfin, with less than 2,000 salaried principal agents, is the downside outlier after three rounds of layoffs.
Real Brokerage is the clear upside outlier, growing its agent count over 20 percent — to 10,000 agents — from the previous quarter.
- 10,000 agents is considerably fewer than Anywhere’s 58,000 or RE/MAX’s 82,000, but Real is catching up to Compass’ 28,000 agents.
Speaking of Compass, Q1 2023 was the first time that the brokerage’s agent count decreased.
- Context is important: Many brokerages lost agents.
- But Compass is no longer in the ranks of “fast-growing brokerages,” a category it dominated over the past three years. That mantle now passes to eXp Realty and Real (and several other low-fee brokerage models).
What to watch: Agent migration patterns are a significant leading indicator of future brokerage growth.
- In a period of belt-tightening and fewer transactions, agents are moving away from traditional brands and flocking to relatively newer models where they’re able to keep more of their commission.
The bottom line: Agents — and not AI, machine learning, a sophisticated CRM, a one-click transaction, nor any other tech buzzwords — sell houses.
- This period of market scarcity reveals the brokerage business models able to thrive in a downturn, as well as those facing more fundamental challenges.
- To identify the brokerage business models of the future, one simply needs to follow the agents.
Note: Due to reporting limitations, the agent count included for eXp Realty is a global figure, while Keller Williams and RE/MAX include the U.S. and Canada.
Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.
