Agent Migration and Brokerage Transformation Continues
As 2023 grinds into the final months of the year, agents are continuing to migrate from legacy brands to low-fee, cloud-based brokerages.
Why it matters: A receding tide reveals , and the current market dynamics are revealing clear agent attraction trends – with implications that may affect the industry for years to come.
The data : Between the second and third quarter of the year, agents continue to flock to the low-fee / high-split brokerages where they are able to keep more of their commission dollar .
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This is at least the third straight quarter of declining agent counts at the large legacy brands: Anywhere, RE/MAX, and Keller Williams.
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The noteworthy outlier is Compass – which acquired Realty Austin and its 630 agents – which operates as a legacy brand but has the growth rate of a low-fee brokerage.
Since the beginning of the year , 10,500 agents have left the big legacy brands, while the exact same number of agents have joined the low-fee brokerages.
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Agents are voting with their feet, and moving from one brokerage paradigm to another.
Agent migration is shaping transaction volumes and brokerage market share.
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Between Q2 and Q3 of this year, the number of U.S. existing home sale transactions was down five percent, with some brokerages over- and others under-performing the market.
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Low-fee models Real, United, and eXp Realty continue to outperform the market and grow during a down market – a remarkable achievement.
Yes, but : While this metric shows momentum, it’s not perfect; one down quarter can result in a subsequent up quarter, which appears to be the case with Compass – it didn’t have a bad Q3, it just had a great Q2.
The bottom line: As measured by agent count, there is an undeniable shift occurring across the industry in this time of upheaval, uncertainty, and change.
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It’s worth noting that the low-fee / cloud-based brokerage models have another important attribute: low operating expenses (no offices!).
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That fact, coupled with growing agent numbers, is laying the groundwork for a transformational shift in the industry that may set the tone for years to come.
Note : Thank you to Keller Williams, United Real Estate, and RealtyOne for trusting me with their data. As private companies they don’t have to share. Certain data for RE/MAX and Berkshire Hathaway HomeServices is not publicly available, which is why it is not included.