RealTrends 500 – 2022 was a difficult year for top independent public brokerages
Robert Reffkin, CEO of Compass, may have said it best when telling analysts and investors listening to the fourth-quarter earnings call that 2022 would be a “very difficult” year.
Despite the difficulties Compass and Reffkin encountered in 2022, his company still managed to claim No. 2nd place on the 2023 RealTrends 500 Public Independent Brokerage rankings, behind eXp Realty who claimed the tops spot. The transaction sides are used to rank the firms.
This category is new in the RealTrends 500 brokerage rankings.
Compass closed 210,365.00 transactions in 2022. This resulted in a 6% annual decline of revenue to $6.0186 billion and a net loss at $601 million.
Compass and Reffkin are looking to take the top spot in both the transaction side and sales volumes rankings in the future. Compass’s CEO is looking at its technology platform to help them achieve these goals.
Refkin says that Compass’s technology offerings are the main motivating factor for agents joining the company.
Reffkin stated that “We continue to distinguish ourselves through our technology platform.” It is a great asset for Compass as it helps to attract and retain agents. It increases their productivity and allows us to attach other services which will further monetize our platform.
The firm plans to integrate title and escrow services in its agent platform. It is currently testing the beta version of this product within its Southern California markets.
eXp wins the top spot
eXp Realty claimed the top spot, with 397,138.0 transactions sides in 2022. Glenn Sanford-led firm also topped the RealTrends 500 rankings based on transaction sides.
Despite eXp’s net income falling from $81.16million in 2021 to $15.42million in 2022, the firm still recorded a 22% increase in revenue year-over-year, which was $2.6 billion. eXp also reported a 15% increase of transactions closed by its agents in a year in which the industry experienced an 18% decline in existing home sales.
Sanford is happy with the performance of his company, but he wants more growth.
“To drive the next stage of eXp’s growth — one of the reasons why i returned as CEO of eXp Realty — was for us to continue our focus upon the agent-centric nature the real estate brokerage, leveraging scale with the ultimate goal of being the No. Sanford spoke to analysts and investors listening to the firm’s fourth quarter earnings call. He stated that eXp Realty was the No. 1 worldwide real estate brokerage brand and that they had done a great job.
Redfin claims the third spot
Glenn Kelman’s Redfin claimed the third spot, with 66,554.00 sides by 2022.
Kelman’s company was in a difficult year in 2022, there is no doubt. Redfin laid off approximately 8% of its workforce in June and shut down its struggling iBuying operation in November. These problems led to a net loss in the year of $321.1million, despite an annual 19% increase in revenue to $2.284 trillion.
Despite these difficulties, Kelman was positive about the future of the firm’s fourth quarter earnings call. His optimism was buoyed in part by an increase in repeat or referral business transactions Redfin agents closed during the fourth quarter. These types of transactions accounted to 34% of Q4 sales, up from 32% last year.
Kelman stated that Redfin’s agents are now more capable of driving loyalty sales than ever before.
The Real Brokerage, Fathom and Douglas Elliman round off the public firms
Next in line at No. Fathom Holdings Inc occupied the fourth spot. It closed 44,707.00 transactions in 2022. Fathom saw a 14% increase in transaction growth per year in 2022, and a 25% increase in revenue from year to $390.615 million. The firm still reported a net loss last year of $27.626 millions.
“Fathom achieved solid results in year over year revenue growth, agent growth and transaction growth. We remain optimistic about the future, despite the current market conditions. “Our results confirm our belief that our model provides the greatest value for agents in all market conditions,” Joshua Harley (Fathom’s CEO) said in a statement. “Even with today’s economic uncertainty and subdued market conditions, we believe Fathom has a long runway ahead of it. We expect to turn the corner towards profitable and growing growth in the next quarters and start to show the operating leverage in the business.”
The Real Brokerage was the fifth-placed firm after recording 34,184.00 transactions in 2022. Despite a $20.6 million net loss, the firm’s revenue rose 214% year-over-year to $318.8million, thanks in part to an 181% increase in transaction counts.
Douglas Elliman Realty claimed the last spot on the list, with 26427.00 closings last year. The New York-based brokerage saw its annual revenue drop from 1.35 billion in 2021, to $1.15 billion 2022. This resulted in a net loss $5.622 million, compared to a net income of $98.838 last year.