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Hopes were once high heading into 2024. In reality, most real estate businesses have continued to struggle with low transaction volumes.
But in this stagnant environment, a select group of real estate companies has succeeded in nabbing market share, boxing out key competitors and positioning themselves as the potential winners of the next stage of the market recovery.
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In some cases, these real estate companies are even outperforming the booming S&P 500 in the process — no small feat, given how badly real estate has trailed other sectors of the economy.
In this first installment of a two-part series, Intel reveals which companies in 2024 have so far done the most to improve their standing in the eyes of investors, relative to the major rivals in their respective sectors.
And next week, Intel will dive deeper into the numbers behind the pendulum’s latest swing.
As investors process copious amounts of financial data and industry changes, here are the perceived winners of the sluggish 2024 housing market as listing portals and brokerages spar over who gets an ever-bigger place in the industry.
1. Zillow over CoStar
Perhaps no real estate company — and certainly no listing portal — was the subject of more intrigue and hype heading into 2024 than CoStar Group.
For years, the deep-pocketed commercial real estate giant made no secret of its desire to unseat top dog Zillow with its Homes.com residential listing platform. In February, it announced a billion dollar — with a “B” — marketing campaign, led by multiple Super Bowl commercial slots.
And in March, CoStar got a perceived boost over its rival as investors digested the implications of the newly announced terms of the National Association of Realtors settlement, which CEO Andy Florance has argued favor his company’s “your listing, your lead” approach.
But that edge didn’t last.
Chart by Daniel Houston
Stock price change in 2024
- Winner: Zillow — up 43% year to date1 All percentage changes in stock price in this report represent year-to-date change and are current as of Thursday, Nov. 21, unless stated otherwise.
- Major rival: CoStar — down 10%
Zillow’s value as a company surged back throughout the summer and the fall, defying the weak environment for real estate and solidifying its place as the best-positioned residential portal in the eyes of investors.
In Part 2 of this series next week, Intel will explore some of the reasons why Zillow has been able to fend off the threat, for now.
2. Compass over — well, everyone
This year was rough on virtually every real estate company — much rougher than expected, in fact.
Federal Reserve rate cuts once slated for early in the year were pushed down the road again and again. Mortgage rates remained high, locking many homeowners in and serving as a disincentive to buy.
A bump in demand in the opening weeks of January proved to be a mere head-fake — not a sign of a quick turnaround — as the market downturn stretched on.
Through all this, one top-volume brokerage company built its business, eating up market share from the other major players without inviting the steep losses it incurred during its previous era of rapid growth.
Chart by Daniel Houston
Stock price change in 2024
- Winner: Compass — up 90% year to date
- Major rival: Anywhere — down 45%
That’s right, Compass stock has nearly doubled in value since the start of the year, even as the housing market on which the brokerage depends continues to stagnate.
Unlike many other real estate companies during this period, Compass has continued to scoop up top producers and make year-over-year gains in revenue.
And unlike Compass’s own growth trajectory in the past, it’s done so without posting its once-gargantuan quarterly losses. The brokerage giant finally reported a quarterly profit in the second quarter of 2024, and followed that up by nearly breaking even once again in the third quarter.
That mix of a newly profitable model with continued growth in a down market — at the expense of its other big competitors — has apparently resonated with investors.
3. Real Brokerage over eXp
Few in the industry will forget the rapid rise of eXp Realty.
Once the golden child of the pandemic-era housing boom — and undoubtedly one of the most popular brokerage companies today — eXp was forced to finally hit pause on its breakneck pace of agent-count growth as the housing downturn took its toll on revenues and profitability.
Now, a new upstart — the Real Brokerage — is taking up the mantle of fastest-growing high-volume brokerage.
Chart by Daniel Houston
Stock price change in 2024
- Winner: The Real Brokerage — up 239% year to date
- Major rival: eXp World Holdings — down 17%
Real, as it’s also known, is still worth approximately half as much as the $2 billion eXp World Holdings in terms of market capitalization.
But its rise is reminiscent of the eXp of yesteryear, and modeled on much of the same pitch to agents: a low-fee, tech fueled brokerage model that lets the agent keep a greater portion of the transaction than traditional models.
More on these dynamics next week in Part 2 of this series.
