Compass Knocks Realogy From Top Of T3 Sixty Rankings After 23 Years
Real estate analytics firm T3 Sixty’s latest Real Estate Almanac revealed how complicated the answer to “Who’s the biggest brand in the industry?” can be, with Compass, Realogy and Keller Williams ruling their respective business models.
As the housing market enters the third consecutive year of rapid-fire sales, many of the industry’s top companies have been riding high. During the latest round of industry earnings, Keller Williams highlighted “continuing market share gains in the U.S. and Canada,” Realogy boasted another “extraordinary year of financial and operational results,” and Compass lauded its ability to “exceed its original goals” and outpace the industry transaction growth.
Amid the noise of robust earnings reports, it can be difficult to determine how brands actually stack up against each other in the face of a shifting landscape. According to T3 Sixty’s latest Real Estate Almanac published on Tuesday, New York City-based brokerage Compass is the clear winner as it logged an “industry record” annual sales volume and ended Realogy Brokerage Group’s 23-year run.
From 2020 to 2021, Compass’ total sales volume grew 67.6 percent year over year from $151.7 billion to $254.2 billion. Realogy Brokerage Group (formerly NRT) followed closely with $243.9 billion in 2021 annual sales volume, as HomeServices of America ($198.7 billion), eXp Realty ($156.1 billion) and Redfin ($52.2 billion) rounded out the top five.
T3 Sixty noted some industry members may take issue with their ranking of Compass, as RISMedia removed the brokerage from its 2022 Power Broker ranking for including commercial sales in its annual sales volume. “[Compass’ total sales volume] would have placed [it] in the No. 1 spot on the 2022 Power Broker Report, surpassing Realogy’s more than $246B reported sales volume for 2021,” the publication explained. “However, a representative of Compass confirmed to RISMedia that its 2021 total sales volume includes commercial real estate transactions, making the data inadmissible.”
However, T3 Sixty said it reviewed Compass’ commercial sales and the removal of those sales from the brokerage’s annual sales volume still places them in the No. 1 slot on the brokerage list, which solely accounts for the sales volume of brokerage-owned and operated offices.
“The inclusion of small and infrequent commercial sales is often included in the reporting by certain large residential real estate enterprises where such inclusion is immaterial,” the report explained. “T3 Sixty separately reviews those numbers, and if they are found to be significant or will impact the rankings, those numbers are removed.”
Although Compass reigned supreme on the brokerage list, Austin-based company Keller Williams dominated on the franchise list with an annual sales volume of $500.1 billion. Although RE/MAX ($341.1 billion) and Coldwell Banker ($335.0 billion) snapped up the second and third spots on the list, Sotheby’s International Realty experienced the highest level of growth of any other top-five franchise brand in the United States.
“Sotheby’s International Realty, based on a 2020-2021 sales volume growth of 33.8 percent, moved past Berkshire Hathaway HomeServices ($173.0 billion) to become the nation’s fourth-largest franchise brand,” the report explained. “The brand has experienced sustained growth in recent years; it claimed the No. 5 slot in 2019 when it surpassed Century 21 Real Estate.”
Although Realogy lost out on the brokerage list, the New Jersey-based brand still clinched the top spot on the holdings company list, which accounts for the production of both company-owned and franchise wings.
Realogy Holdings Corp, which includes Realogy Brokerage Group and its six franchise brands Coldwell Banker Real Estate, Sotheby’s International Realty, Century 21 Real Estate, Better Homes and Gardens Real Estate, ERA Real Estate and Corcoran Group, raked in $737 billion in 2021 sales volume — a 29 percent increase from $571.9 billion the previous year.
Keller Williams holding company kwx came in second place with $500.1 billion in 2021 sales volume, followed by RE/MAX ($341.1 billion), HomeServices of America ($291.8 billion) and Compass ($254.2 billion).
“Production for kwx, the holding company that includes Keller Williams Realty, and RE/MAX production center almost exclusively on franchise operations,” the report explained. “HomeServices of America production included that of its brokerage of the same name HomeServices of America, which includes 28 regional brokerage operations it owns such as Long and Foster, Ebby Halliday and Harry Norman Realtors, and its two franchise brands Berkshire Hathaway HomeServices and Intero Real Estate.”
It added, “Compass, has no franchise operations, but appears in the top five based on its massive brokerage production alone.”
T3 Sixty Executive Chairman Stefan Swanepoel said 2022’s rankings represent an evolving real estate landscape where companies can carve out respectively impressive success with different business models.
“The 2022 Almanac rankings reflect three major trends identified in the Swanepoel Trends Reports — enormous funding and growth of new business models, large number of acquisitions and consolidations and the increased integration of technology,” he said. “The residential real estate industry is undergoing a fundamental transformation [and] there are many different structures. We need to — as far as possible — make sure we make factual apples-to-apples comparisons of companies.”