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Propelled by rising home prices and home sales, housing markets around the U.S. marched toward “normal” this year, laying the groundwork for a real estate tech and acquisition boom in 2014.
The recovering housing market boosted the stock prices and market caps of publicly traded companies whose fortunes are tied to residential real estate, including Realogy, Zillow, Trulia, Move Inc. and Re/Max, increasing their capacity to acquire new technologies or companies outright.
|Firm||Opening price per share Jan. 2, 2013||Closing price per share Dec. 30, 2013||Percent growth||Market capitalization|
|Move Inc.||$7.65||$15.86||107%||$609 million|
Source: Yahoo Finance * Re/Max went public on Oct. 2, 2013.
In October, franchising giant Re/Max pulled off residential real estate’s fourth successful IPO in the last two years, riding on the coattails of Zillow, Trulia and Realogy to raise $225 million.
Seattle-based brokerage Redfin, which raised $50 million in November, is widely seen as being primed to go public sometime in 2014. Fast-growing Irvine, Calif.-based brokerage and new franchisor Realty One Group — the seventh-largest brokerage in the U.S. in 2012 by transaction sides — has signaled its intention to eventually go public and could take steps toward that goal in 2014.
In 2013, the percentage of agents working for franchised firms rose. Close to half (45 percent) of all residential real estate agents hang their license with a brokerage affiliated with a franchisor, according to the National Association of Realtors’ 2013 member profile. That’s up from 41 percent in 2012 and 40 percent in 2011.
In September, the first of 51 Prudential Real Estate-branded brokerages that have committed to affiliate with the Berkshire Hathaway HomeServices brand made the switch.
It remains to be seen whether Buffett’s new franchise network will catch on with independent brokerages or companies affiliated with brands other than Prudential Real Estate, which is set to sunset as a real estate brand in the 2020s.
Franchisors also expanded their global footprints in 2013: Re/Max entered Japan and South Korea; Coldwell Banker started doing business in India; Century 21 launched a global, multilingual website; and Keller Williams Realty continued its nascent international push with an entrance into the United Kingdom.
“The world is a becoming a much smaller place,” Re/Max CEO Margaret Kelly told Inman News. “Many of our colleagues are now marketing themselves to specific foreign buyer groups, and this trend is likely to not only continue, but grow even stronger.”
Franchise Times ranked Re/Max as the top global franchisor by 2012 global sales with Coldwell Banker, Century 21 and Keller Williams following, respectively.
Franchise Times 2013 ranking of real estate franchisors
|Franchisor||Ranking, by global sales volume||Worldwide sales volume, 2012*||No. of franchised offices worldwide, 2012||No. of franchised offices in the U.S., 2012|
|Coldwell Banker Real Estate||26||$4.5 billion||4,475||2,446|
|Century 21 Real Estate||28||$4.0 billion||7,100||2,500|
|Keller Williams Realty||36||$3.2 billion||663||647|
|Prudential Real Estate||45||$2.7 billion||1,400||1,400|
|Sotheby’s International Realty||79||$1.2 billion||659||403|
|ERA Real Estate||113||$613 million||2,322||571|
Source: Franchise Times *Estimate by Franchise Times by multiplying total sales volume by 2.5 percent.
Realty One Group grew its new franchise network to 23 firms in 2013. With the launch of a new website, the company is poised for national expansion and a possible IPO in 2014.