Mega-brokers take smaller slice of real estate pie

Real Trends 500 grew 2011 transaction sides, sales volume

The 500 largest real estate brokerages in the country posted gains in both closed transaction sides and sales volume in 2011 compared to 2010, according to rankings from real estate publishing and communications company Real Trends.

But as a group, the 25 brokerages at the top of the list saw a decline in sales volume. Fifteen of the top 25 brokerages on the Real Trends 500 list — including four of the top five — saw sales volume decline from 2010 to 2011. 

Real Trends ranks the country’s 500 largest brokerages each year by transaction sides (in every real estate sale there are two transaction "sides": the buyer’s side and the seller’s side) and closed sales volume.

Transaction sides among the 500 rose to 1.99 million in 2011 from 1.89 million in 2010 — a 5.2 percent increase. Total sales volume rose 8 percent, to $517 billion. This despite a decrease in the average home price among the 500: $260,026, down 4.1 percent.

As a group, the top 25 brokerages saw sales volume decline 4.4 percent in 2011, to $236.7 billion. That’s a reversal of the trend seen in last year’s report, when the top 25 firms outperformed the Real Trends 500 with a 4.5 percent increase in sales volume, to $247.7 billion.

So while the top 25 brokerages accounted for 48 percent of the $513 billion in total sales volume tallied by the Real Trends 500 in 2010, the biggest brokers saw their share of the 2011 pie drop to just under 46 percent in 2011.

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The top four brokerages in both transaction sides and sales volume remained unchanged from last year’s report. For transaction sides, NRT LLC was at the top, followed by HomeServices of America Inc., The Long & Foster Companies Inc., and Hanna Holdings Inc.

The first three each closed fewer transaction sides in 2011 than in 2010. NRT closed 255,410 sides, down 1.4 percent from 2010; HomeServices of America closed 113,556 sides, down 0.5 percent; Long & Foster closed 61,030 sides, down 6.5 percent. Hanna Holdings Inc. closed 30,797 sides in 2011, up 1 percent from 2010.

Crye-Leike Realtors, which had been in sixth place by transaction sides last year, rose to fifth place with a 1.3 percent increase in sides, to 22,224.

ZipRealty Inc., which had previously held the fifth-place position, dropped down to No. 13 after a 35.2 percent decline in sides, to 14,255. ZipRealty shuttered offices in a dozen markets last year, and embarked on a new strategy of using its popular website to generate leads for other brokers. ZipRealty currently operates as a brokerage in 20 markets, and provides "Powered by Zip" referrals in eight others.

Fourteen of the top 25 brokerages saw their completed transaction sides rise in 2011: Hanna Holdings Inc.; Crye-Leike Realtors; Coldwell Banker United, Realtors (up 10.5 percent); Realty One Group (18.6 percent); Baird & Warner (8.6 percent); West USA Realty Inc. (5.9 percent); Ebby Halliday Real Estate Inc. (2.5 percent); Allen Tate Companies (1.1 percent); Re/Max Results (8 percent); Keller Williams Realty (10.6 percent); Watson Realty Corp. (9.9 percent); Prudential American Group Realtors (39.1 percent); John L. Scott Real Estate (6.3 percent); and William Raveis Real Estate Inc. (1.4 percent).

Sales volume rose for 10 out of the top 25 brokerages in 2011. Among the top five, only Alain Pinel Realtors (No. 5) saw a sales volume increase in 2011, to $7.15 billion, up 5.6 percent. NRT, at No. 1, posted a 3.5 percent sales volume decrease to $108.9 billion. Volume at HomeServices of America fell 4.5 percent to $31.2 billion, while Long & Foster saw an 8.8 percent decline in sales volume to $20.1 billion. Prudential Douglas Elliman, at No. 4, saw its volume fall 3.4 percent, to $11.1 billion.

ZipRealty saw the sharpest decrease in sales volume among the top 25 in 2011: down 33.7 percent, to $3.3 billion. The online brokerage fell from its No. 5 ranking last year to No. 15 this year.

There were a few newcomers to the top 25 rankings this year. Phoenix-based HomeSmart International, which submitted its transaction and sales volume data to Real Trends for the first time this year, came in as the 10th-largest brokerage in the nation by transaction sides (16,080) and the 21st largest by sales volume ($2.7 billion).

In the rankings by transaction sides, Las Vegas-based Prudential Americana Group Realtors moved from No. 35 to No. 22 after a 39.1 percent increase in sides in 2011, to 11,241.

Nearby Henderson, Nev.-based Realty One Group Inc. jumped seven spots to No. 23 in this year’s rankings by sales volume, after a 20.4 percent increase, to $2.6 billion. That follows a 36.9 percent jump in sales volume in 2010.

San Francisco-based Pacific Union International rose by five places this year to No. 24 by sales volume, following a 17.5 percent increase, to $2.6 billion.

  Ranked by 2011 closed transaction sides Ranked by 2011 closed sales volume
1 NRT LLC – Parsippany, N.J. NRT LLC
2 HomeServices of America – Minneapolis HomeServices of America
3 The Long & Foster Companies Inc. – Chantilly, Va. The Long & Foster Companies Inc.
4 Hanna Holdings Inc. – Pittsburgh Prudential Douglas Elliman Real Estate
5 Crye-Leike Realtors – Memphis, Tenn. Alain Pinel Realtors
6 Coldwell Banker United, Realtors – Bryan, Texas Prudential Fox & Roach Realtors
7 Prudential Fox & Roach Realtors – Devon, Pa. Hanna Holdings Inc.
8 RealtyUSA – Williamsville, N.Y. William Raveis Real Estate Inc.
9 Real Estate One – Southfield, Mich. First Team Real Estate
10 HomeSmart International – Phoenix Coldwell Banker United, Realtors
11 Realty ONE Group – Henderson, Nev. Ebby Halliday Real Estate Inc.
12 Baird & Warner – Chicago Crye-Leike Realtors
13 ZipRealty Inc. – Emeryville, Calif. Intero Real Estate Services
14 Realty Executives Phoenix – Phoenix John L. Scott Real Estate
15 West USA Realty Inc. – Phoenix ZipRealty Inc.
16 Ebby Halliday Real Estate Inc. – Dallas Houlihan Lawrence
17 Allen Tate Companies – Charlotte, N.C. Coldwell Banker Bain & Coldwell Banker Seal
18 Prudential Douglas Elliman Real Estate – Huntington Station, N.Y. Baird & Warner
19 RE/MAX Results – Eden Prairie, Minn. Better Homes and Gardens Real Estate Mason-McDuffie
20 Keller Williams Realty – Dallas Allen Tate Companies
21 Watson Realty Corp. – Jacksonville, Fla. HomeSmart International
22 Prudential Americana Group Realtors – Las Vegas West USA Realty Inc.
23 John L. Scott Real Estate – Issaquah, Wash. Realty ONE Group
24 First Weber Group – Madison, Wis. Pacific Union International
25 William Raveis Real Estate Inc. – Shelton, Conn. RealtyUSA

Source: Real Trends

Real Trends also ranked the top 50 firms in productivity per sales associate, based on sides and volume. As in last year’s report, Re/Max brokerages dominated among both lists, taking 44 out of 50 spots in terms of transaction sides per associate, and 23 out of the 50 top spots in terms of sales volume per associate.

When considering productivity per office, however, Keller Williams brokerages took the lead. Of the top 50 firms with the most transaction sides per office, Keller Williams accounted for 28 and Re/Max brokerages accounted for 15. In terms of sales volume per office, Keller Williams accounted for 27 of the top 50 firms while Re/Max accounted for 12.

This year, Real Trends also ranked the top 50 firms with the largest increases in closed transaction sides and sales volume. Keller Williams dominated the top 50 firms ranked by increase in number of transaction sides from 2010 to 2011, accounting for 19 of the 50. Re/Max accounted for seven, while firms affiliated with Prudential accounted for five.

Keller Williams also made up more than two-thirds, 34, of the top 50 firms with the highest percentage increase in transaction sides from 2010 to 2011. Re/Max accounted for eight.

Keller Williams accounted for 20 of the 50 firms with the highest dollar increase in sales volume in 2011, followed distantly by those affiliated with Prudential and Sotheby’s International Realty, which each accounted for four.

Keller Williams also accounted for 28 of the 50 firms with the highest percentage increase in sales volume, followed by Re/Max at seven.

Also new this year, Real Trends ranked the top 50 firms with the largest increases in transaction sides and sales volume from 2007 to 2011. By transaction count, Keller Williams accounted for 16 of the top 50 firms in that time period, while Re/Max and Prudential each accounted for seven. By percentage rise in transaction sides, Keller Williams accounted for 31 of the top 50 firms, followed by Prudential and Re/Max at four each.

By rise in sales volume dollar count during that five-year period, Keller Williams made up just over half the list of top 50 firms at 26. Re/Max accounted for four. By percentage rise in sales volume, Keller Williams also dominated, accounting for 31 of 50 firms, followed by Re/Max at four.

Keller Williams’ lead in sales volume is partially, but not completely, due to high average sales prices in the areas in which it does business. Of the top 50 firms with the highest average sales price in 2011, Keller Williams accounted for 11, while luxury franchisor Sotheby’s International Realty accounted for 15. Re/Max accounted for four. The bulk of the rest was made up of independent, nonfranchised firms.

There were four firms with an average sales price of more than $1 million: Washington Fine Properties LLC in Washington, D.C. ($1.3 million); Slifer Smith and Framton Real Estate in Colorado’s Vail Valley ($1.26 million); Keller Williams Realty in Palo Alto, Calif. ($1.24 million); and Paragon Real Estate Group in San Francisco ($1.07 million).


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