To all the agents in the house,
This is a time of high anxiety in real estate. HousingWire's Lead Analyst Logan Mohtashami has diagnosed the housing market as "savagely unhealthy" "still savagely unhealthy" and two weeks ago wrote, "The savagely unhealthy housing market is a nightmare."
Many homebuyers, sellers, agents, and brokerages probably wish this was all make believe. Regardless of how good or bad the current housing cycle is, we have entered a distinctively new cycle. Escalating housing prices and sales are replaced by still escalating prices but cooling sales. My colleague Brooklee Han reported last week that the National Association of Realtors' pending home sales index took a 14% year-over-year tumble.
One question is whether individual agents can weather this change. Another is how brokerages are positioned. Let's run through a few examples.
* Compass, the biggest brokerage in the U.S. by sales volume, has asserted that their talented agents and the tech platform they have provided those agents can help the company weather bad times. That will have to do, as Compass, which laid off 450 employees last month, has a self imposed moratorium on further mergers and acquisitions. (The firm did acquire New York City brokerage LG Fairmont as recently as May.)
* eXp, the biggest brokerage by deal sides, has no office space, and overall lower operating costs than other brokerages. The company has metronomically posted profits of a few million dollars a quarter, suggesting that, despite their rapid growth in agent numbers, they have a fairly set business.
* Anywhere, the brokerage conglomerate formerly known as Realogy, and HomeServices of America, have brands that have been through multiple housing cycles. But Anywhere's $343 million in 2021 net income was boosted by a mortgage joint venture that is no longer printing the company money.
Agents, where does your brokerage stand? What qualities might it possess to take on the upcoming months, and perhaps years, of economic turmoil?
Please email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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