The Real Estate Brokerages Who Lead The Fall. Who is Most At Risk?
The Fed increased rates again and the smoking hot spring market feels like a lifetime ago. The market downshifted hard and EVERYONE is looking to adapt. The old way is dead. RIP.
Many small teams and individuals wont make it, and those with the largest need for change have the most to lose. Large brokerages in previously hot markets and where values soared are seeing the worst, first.
Check out the year over year revenue decline for the quarter from these top brokerages in the chart below. (Reminder: Anywhere aka Realogy aka Cendent and is comprised of BHG, C21, CB, ERA Corcoran etc)
This is a significant change y/y that will no doubt continue to alter spend and growth projections. While the nation is not in a recession, these are hard times in our industry. Typically, when times are tough it leads to volatility, and a few known things will happen with regard to agents and leads.
Hard Times for Agents:
Some agents crush it. 10% are ballers. But, most agents are pretty short sighted and only look out for #1. For some, when real estate gets hard, they will bail and move to another career prior to going to CE or paying for NAR dues again. I’d estimate that we ought to see 15% of the industry do this prior to the spring sales season. A much larger faction, 30% will see the grass as greener at another firm – perhaps they offer better technology (ahem, Revaluate?!? Do you want to recruit agents with better systems and tech? IF SO SCHEDULE HERE) have a better split or provide great coaching. Whatever – it could be as dumb as free donuts but still others will depart to start something new.
Agents will move between brokerages in hard times at an alarming rate.
Hard Times for Leads:
Lead volume has tanked AND the price of leads from major portals continues to climb. What a lose-lose situation. (Note: I would love someone to reach out with data on lead volume y/y on this if you know more. We could feature you or keep it anonymous)
Those that are winning are working their own database that they OWN – rather than RENTING a database from a portal. Data renters pay for the same lead over and over and are none the wiser. But, because you are a wise and thoughtful reader, you noted that I just made a buy vs rent comparison when talking about your database. See the connection to our industry? Eh? Nudge… Wink.
If you’d like to learn how to best leverage what you own (your database) in these hard times, schedule a time with our team so you can be in the know. If you don’t currently own a nice big database, we can help you with that as well. Select a time for a demo here.