From an inventory drought to a sea change in relocation patterns, market challenges and opportunities have created a wild ride for this year’s Power Brokers. Triggered by the pandemic, changes to the way brokerages must operate and the way consumers need—and expect—to be served, have caused brokers to rapidly adapt in order to reap the current rewards and navigate the longer-term effects. To help gauge the impact of 2020 on brokerage operations and tap into their strategies for the year at hand, RISMedia curated insights from Power Brokers across the country for this special roundtable. Here, real estate leaders share their key takeaways from 2020 and their game plans for 2021.
Bailey Properties, Inc., CA
President & CEO,
Briggs Freeman Sotheby’s International Realty, TX
Portside Realty Group, ME
President & CEO,
HomeSmart Professionals Real Estate, RI, MA, CT
Brown Harris Stevens, NY, NJ, CT, FL
President & COO,
Coldwell Banker Premier Realty, NV
Executive Vice President, McEnearney Associates, VA, MD, DC
Coldwell Banker High Country Realty, GA
President & CEO,
CENTURY 21 Affiliated, WI, IL, IN, MI, MN, FL
Founder & CEO,
Keller Williams Capital
Properties, DC, VA
President & Broker/Owner,
HomeServices Drysdale Properties, CA
Matthew van Winkle
Founder & CEO,
RE/MAX Northwest, WA, OR
William A. Watson Jr.
Watson Realty Corp., FL
How have the experiences of 2020 made your firm stronger for business in 2021 and beyond?
Gretchen Pearson: 2020 made us much stronger. Our actions and positions further defined who we are and what we stand for. We learned to lean into what works, to drop what doesn’t, and to move on.
Faron King: REALTORS® are resilient by nature, but 2020 amplified that resiliency. In Georgia, we were fortunate to be one of the first states that was declared Critical Infrastructure and Essential Business, allowing us to keep transactions moving and get back to work sooner than many other states. The buyer demand that followed the shutdown, and still continues in our region, is nothing short of unbelievable. Like most, we have embraced virtual communication and honed our skills on working smarter to keep up with the demand.
Bess Freedman: In 2020, Brown Harris Stevens restructured to incorporate Halstead, and the two companies now operate under the Brown Harris Stevens brand. This new venture fortified our company and helped us to emerge from the pandemic bigger and stronger than ever. We adapted to new technologies and virtual showing techniques, launched a new intranet platform, and increased our marketing reach. We are now the largest privately-owned residential real estate company on the East Coast with a singular focus on service across all inventory types, prices and locations in all of our regions.
Bo Menkiti: 2020 was a challenging year in many ways. The pandemic showed us that things we could never imagine—like vast swaths of the economy shutting down—could happen. We recognized the need for flexibility and harnessed our ability to adjust on a moment’s notice. As a business, we realized that we could successfully pivot and creatively manage new methods of collaboration, communication and service delivery by incorporating new technologies and embracing the new normal.
Last year also brought to light the work we must do as a country in addressing social inequalities and racial equity, in addition to highlighting how international crises like the pandemic affect different communities in different ways. This new dynamic has created a clarion call for us as business leaders. It has never been clearer that businesses, especially in the real estate industry, play an important role in increasing access to opportunities and equity in our nation’s communities.
Matthew van Winkle: From 2020, we’ve learned that we can scale farther than previously anticipated as the value proposition of the physical office has been severely diminished. Agents have adapted and no longer need to be in the office to run their business. This will allow us to greatly expand our service offerings.
Dava Davin: The events of 2020 brought our company closer together, and our culture became stronger. We are in a good place to take on 2021 and continue to recruit and expand our brand while doing some good work throughout the great state of Maine.
Dan Kruse: The events of 2020 have created many challenges for both brokerages and consumers and have forced CENTURY 21 Affiliated to do business in new ways. We have become more efficient, we’ve embraced new technology and figured out ways to connect with consumers. That being said, real estate thrives when agents can be face-to-face with their consumers. There were challenges and great things that came out of 2020, and while we adapt, we also hope for a new sense of normalcy in our markets in 2021.
Robert Bailey: We have never seen this amount of capital and liquidity. The quest to relocate to the coast has put tremendous pressure on our market, which was already short on inventory. Our ability to guide our agents through this with marketing, technology and coaching is paramount to our continued success. The work-from-home option became a reality for our market, creating Silicon Valley at the coast. Santa Cruz and the central coast have been rediscovered.
David Howell: As is true throughout the country, COVID accelerated the challenge of very low inventory. While there is a considerable overhang of condo inventory in the most urban portions of our market, demand for all other property types and price ranges is considerably higher than supply. Further, the recovery in the region’s economy is uneven, and those with jobs have done very well, while those who have lost their jobs or who continue to be at risk are struggling. This “k-shaped” recovery will impact the entry level of our market for years.
What have you done to change operations and manage expenses in the wake of the pandemic?
Molly Hamrick: 2020 was an opportunity in disguise, which allowed us to think more strategically and focus on our areas of strength. Quickly transitioning to an online environment forced our leaders to push the envelope of innovation and create new ways to serve our sales associates and clients. In 2020, we hosted over 500 online classes, workshops and training sessions to help our agents adjust their practices while maintaining and growing their businesses in a brand-new world. From wiring commissions to doing virtual home tours on Facebook Live, we quickly learned that these technologies were quite efficient, and we look forward to keeping these in place going forward.
William Watson: A crisis can create opportunities if approached positively. We immediately started investigating other methods and ways of conducting business. We brainstormed on different options in technology to enhance our ability to communicate with associates and customers. We invested in upgrading our webinar skills, equipment, networking and training with employees and sales associates. We introduced a marketing campaign of “Simple-Safe-Sold” to promote safe real estate communications without personal contact. We have started remodeling our sales offices to add cafes, and reducing the footprint of our offices.
Bo Menkiti: Operationally, we enhanced our use of technology and embraced a remote working environment to keep our employees both safe and connected. With a new mix of virtual meetings and an organized cloud to store data that can be accessed from anywhere, we were able to seamlessly move from an in-person team to one that is just as efficient while working remotely.
We saw early on that the financial burdens of the pandemic would hit nearly every industry. As a brokerage, we were proactive in addressing the potential financial burdens our agent entrepreneurs would face as a direct result of the pandemic. Because we saw the writing on the wall, every division across our business focused on cutting costs and reducing expenses so we could be lean and efficient. We’re dedicated to supporting our agent entrepreneurs and their businesses, and as a result, rolled out a stimulus plan early on that suspended fees and rent, allowing them to build necessary reserves while continuing to operate at the highest level.
While initially the market took a dip in 2020, it roared back, and our agents were positioned to take advantage of this new momentum with an unprecedented increase in sales and incredibly low interest rates. The adjustments we made during the early stages of the pandemic to become a lean and efficient operation have positioned us well as we head into 2021 and beyond.
Matthew van Winkle: Our company was built to scale and to be virtual from the beginning, so 2020 helped us fine tune our processes and our services and then expand. When we were forced to close our offices, we didn’t miss a beat. While we noticed competitors scrambling to figure out how to process commissions and pay their agents, we were focused on helping our agents navigate the changes in the market and help their clients because we’d been using 100% digital payments for the past few years.
Robert Briggs: 2020 was a very good year for a real estate company that could adapt to a virtual world of showings, open houses, 3D digital tours, live webinars, property showcasing and even closings. We were fortunate that moving to a virtual business model was seamless, therefore, our marketing department was able to provide the tools and the training for agents to do their work and be as profitable as ever before.
How did 2020 impact your recruiting and retention strategies?
Gretchen Pearson: We turned almost all resources toward retention. We immediately put together a program for our newer superstars—a Rainmaker Program where we took up-and-coming talent and put them through a guided sales program that empowered them with exclusive tools and opportunities. We were concerned about losing our new talent when the pandemic hit. We know newer agents will pick up a side gig to help make ends meet, and with no open houses and then no Uber, we wanted our program to work like a side gig. We also started paying for Buffini & Company coaching for our agents and increased our feedback and communication loop with our agents.
Bo Menkiti: Now more than ever, it’s crucial to build strong, efficient and motivated teams. As part of our company culture, we work tirelessly to empower our team to be the best they can be both personally and professionally. The pressing need for technologically savvy business models that rose in 2020 was a great opportunity for us to get creative and get to work in securing innovative resources and tools so our agent entrepreneurs can be successful.
We firmly believe that at Keller Williams Capital Properties, our end-to-end technological platform and global network allow our agent entrepreneurs to remain at the forefront of their client relationships while providing the best-in-class resources and tools that today’s customers demand. With our expanded cutting-edge resources, our agent entrepreneurs are empowered to become more digitally connected and tech savvy. Our agents are making a massive impact in their local communities while leveraging the support of a global network of like-minded, service-oriented professionals.
Matthew van Winkle: We went digital. We had one of our best recruiting years, adding over 130 agents. We also completed a few acquisitions to grow to 650 agents from 350 agents in 2019. We doubled down on our development program and our assistant services division to help with retention. Agents get coaching and administrative assistant support that they cannot get anywhere else. 2020 showed us the value of our assistant services, and we plan to increase from approximately 16 assistants to 30 or 40 in the next year.
What is your approach to growth in the year ahead?
Dean deTonnancourt: Our approach to growth has consistently been from within our own business family—our associates. When a company truly delivers what is promised, long-term loyalty is achieved. Delivering an “experience” like no other in the marketplace is the basis of continued long-term growth.
William Watson: We are focused on quality service to our associates and customers. The last 24 months, we have substantially enhanced our support to help associates achieve their quality of life and income. We have the synergism to enhance their success. We will be looking for opportunities to merge companies that have similar objectives. Our interview and support systems create a powerful benefit to help everyone. Our team concept has a powerful impact.
Molly Hamrick: With all the market factors at play, we anticipate that production will exceed even the highs of last year. Our shift into online systems will allow us to navigate this elevated level of business in addition to focusing additional resources into delivering enhanced marketing for listings and sales associates to optimize exposure for both. We will also be dedicated to attracting experienced sales associates who recognize the value of a full-service culture, which ultimately saves them time and allows them to increase their own profitability.
Robert Briggs: We are focused on agent productivity and growth, which will lead to larger marketshare and attracting other professionals to join our team when they see the success we are bringing to our agents.
Faron King: Simply put, find inventory! We are working many different angles to find inventory to list and sell. From contacting owners who bought during the hot market in the early 2000s, who might not be using their second home and not be aware of how good the market currently is, to contacting owners who bought during the lean years of foreclosures who stand to realize substantial appreciation, we’re leaving no stone unturned.
What are the biggest challenges in your market for the year ahead, and how do you plan to handle them?
Robert Bailey: Though real estate was the shining light in the second half of 2020, it also presented to us a tremendous challenge going into 2021. The rapid increase in prices and lack of inventory has created an affordability crisis. Local communities who took a low-growth or no-growth policy are now faced with an increasing affordability gap. The ability to work from home generated a whole new demographic of homebuyers who have now discovered the Santa Cruz and Monterey Bay area.
Faron King: Increased buyer demand coupled with historically low inventory. We are also struggling with builders being booked out for custom-builds and no new construction coming on the market to speak of. I am optimistic that as COVID continues to become more manageable, sellers who want to take advantage of the hot market who have been fearful of listing their home will gain confidence to join the frenzied market.
Dava Davin: We have the tightest market with the lowest inventory we have ever seen in Maine. Agents are stepping up to the challenge and showing their value to their clients in this battle for housing. Resourcefulness, responsiveness and compassion have never been more important. I am incredibly proud of our team.
Dan Kruse: For many brokers, it’s a tale of two markets, and which way it will ultimately swing for 2021 remains to be seen. For those who are not prepared, the current and future market will bring additional challenges, but I believe there will be unbelievable opportunities for growth, business and education. As brokers, we have to be up to those challenges.
Bess Freedman: In NYC, taxes are a huge issue. There is talk of reintroducing the pied-à-terre tax, which, if passed, would heap additional annual costs on many second-home owners in NYC. Analysts already ruled that this tax would not help close significant budget gaps and would likely cause more people to abandon NYC at a time when we need to focus on rebuilding.
Dean deTonnancourt: While new listings continue to enter the market, low inventory and multiple offers continue to be at the forefront of challenges, with approximately one month’s supply available throughout the state of Rhode Island. Our efforts focus on arming our associates with the tools they need to compete in the marketplace, as well as the education of market trends in fostering consumer confidence.
Matthew van Winkle: Our biggest challenge is consumer awareness in the differences between real estate agents. The consumer sees most agents as the same, and our challenge is to educate the consumer on what a good agent really is and what they really do.
Bess Freedman: Aggregator websites and discount brokerages are working to diminish the role of an agent and chip away at their value, and while I don’t foresee this really affecting NYC real estate agents, it will have broader implications in other markets. I believe that buyers and sellers deserve their own representation to protect their interests at the closing table, and not a one-size-fits-all approach. Not all square feet are created equal.
William Watson: The listing inventory needs to be increased. It is essential that we up our personal contact with our customer base and centers of influence as soon as it is safe. There are many homeowners who are reluctant to put their homes on the market due to the coronavirus. Others are concerned about finding a new home if theirs sells. We also believe that there needs to be more efficiency in the permitting process for new construction.
Molly Hamrick: There will be a lot of forced and self-sorting changes made by space users in 2021. Some companies are growing, some downsizing and some are looking for efficiencies. There seems to be a dichotomy between occupants. The pandemic brought a lot of pain to some tenants and landlords, while others have done exceedingly well. I think we all have changed how we do business in some manner, and much of this is to our long-term benefit. While we see some robustness in industrial, our view is that many will continue to look at utilizing space better for cost reasons, and many tenants will look for shorter-term leases.
Robert Briggs: Lack of inventory is the only real challenge we are facing. Our agents must resort to off-market business.
Molly Hamrick: Although we expect a decent recovery, end-user preferences may reveal some permanent changes. In residential, we are still facing a shortage of inventory, so it makes each new listing we get that much more valuable. We’re looking at some rate sensitivity in 2021 based on how far prices have traveled, but demand is expected to remain deeper than supply. Luxury has been spectacular and migration to Las Vegas seems to be continuing. We expect these changes to keep us extremely busy in 2021, so our job is to keep our clients updated on the market, staying on top of new technology and staying objective even when many of us will feel an inertia that is hard to pull away from on a daily basis.
RISMedia’s 33rd Annual Power Broker Report is based on the top 1,000 respondents to the 2021 Power Broker Survey, distributed via email and available here. The survey ranks residential real estate brokerage firms according to closed residential sales volume and closed residential transaction sides for 2020. All sales and transaction data are submitted directly by brands and individual brokerage firms, and are verified by a firm’s financial executives, outside financial firm and/or corporate franchise headquarters. RISMedia’s Power Broker Report is sponsored by Real Estate Webmasters, Leading Real Estate Companies of the World®, Homes.com and Pillar To Post Home Inspectors.
This report was compiled by RISMedia editors Maria Patterson, Paige Tepping, Liz Dominguez and Jameson Doris.