Growth machines: The Future of Brokerage.
Globally, the major, publicly-listed brokerages all posted impressive revenue, transaction, and agent count growth in 2021.
Why it matters: In a notoriously slow-moving industry, these are eye-catching gains. In the U.S, revenue at Compass beat out Realogy's owned brokerage group for the first time, while eXp Realty doubled its U.S revenue in 2021. For a business already operating at scale, this is a very impressive feat. In fact, it rocketed past industry incumbent Realogy in an accelerating growth curve, topping 400,000 transactions in 2021.
Agent counts are driving this growth. Despite promises of disintermediation, disruption and technological efficiency, the agent is still central to the transaction.
The big picture: Amidst the hyperbole of disruption, the future of brokerage is still being shaped by real estate agents. Brokerages are growing by recruiting more agents. The more agents a brokerage adds, the more that transactions grow.
Agent recruitment is a key competitive advantage for brokerages; Compass and exp's growth has been propelled by generous financial incentives offered to agents.
Mike DelPrete is a Global Real Estate Tech Strategist and an Independent Director of Tall Poppy Real Estate.