Money, money, money. This was Q1 earnings week for real estate — Realogy, Zillow, Keller Williams and Re/Max. So what is the verdict?

Together, they tell a happy happy story. The housing market is healthy with low cholesterol and a strong heartbeat — despite anemic economic growth, a listings shortage and higher interest rates.

But this week’s financial reports also show that there are conquerors, re-groupers and re-assemblers. Not everyone’s growth story is equal.

Like the vibe at an EDM music festival, results from Zillow and Keller Williams are ebullient, while Realogy and Re/Max are more subdued — growing but at slower rates as they adjust to new market realities.

Boom! Zillow’s revenue grew 32 percent year-over-year, to a record $245.8 million in Q1, expecting to surpass the enviable $1 billion revenue mark this year. Traffic for the quarter was somewhere between the moon and Mars.

If you are in the real estate business, it becomes increasingly difficult to avoid paying Zillow — like not having Wi-Fi.

Keller Williams has a similar trajectory, grabbing market share from its competitors at a healthy pace. Even the most suspicious and cynical agent has had to consider migrating to KW.

Buttoned-up Realogy is still the big tuna in the real estate sea with revenue of $1.2 billion in the first quarter, but up only 6 percent from Q1 2016.

Operating expenses were also higher. The company lost $28 million, as it spent to recruit and retain top-producing agents. The New Jersey franchise is battling KW as well as new companies like Compass. Top producing agents are like super models at New York night clubs; everyone wants them.

KW reported that its agent count surpassed 159,500 agents in Q1 2017 and it broke its productivity records — in listings and contracts.

Scorned for years for being nothing more than an agent recruiting shop, it has begun to focus on productivity and it may be paying off.

However, according to some reports, KW still dwarfs transaction per agent averages, remaining the lowest among the major franchises.

“On the number of closed units per agent, our median ranges between seven and eight transactions per agent a year, a trend we saw hold in 2016 as our agent count continued to tick up dramatically,” said Darryl Frost, Keller Williams’ spokesperson.

Re/Max says its closed units per agent number is 17.2, claiming to be the highest in the industry.

Note, some companies use averages and others use median.

(KW does not report official earnings — neither top line revenue nor net income — so it is difficult to make apples-to-apples comparisons of its financial picture with other franchises.)

But even its fiercest critics no longer question KW’s impact on the market and its surging share. It is like pretending Facebook didn’t change how we communicate.

Re/Max posted a $4.9 million net gain for Q1 2017 along with a 6.6 percent rise in agent count and a 12.4 percent year-over-year boost in revenue to $48.2 million. Growth, but slow and steady and its agent base remains strong with 117,000 agents.

Plus, the company is using some of its windfall to repurchase franchise regions that it sold years even decades ago to bootstrap its international expansion back in the day. That investment is expensive because so much of the brand’s value is tied up in these local franchises.

Management shake-ups are also part of the Q1 story.

Two franchise executives have left Realogy — Coldwell Banker and Century 21 — and top franchise exec Alex Perriello retired. And the board of directors is preparing a succession plan for longtime CEO Richard Smith.

At KW, Co-CEO Chris Heller suddenly left the Austin-based company last month, and co-CEO John Davis took the reins as sole CEO. Also, chief product officer Jonathan Berkowitz departed after a few months.

Next week, we get the scoop on when News Corp reports its results.

Times are good for real estate right now. So the playing field is level, giving us a good view as we round the curve on who the winners and losers might be in the coming years.

Email Brad Inman

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription