The pandemic was not a normal market. The further we move past that time, the more obvious it becomes. One of the major challenges when trying to measure and quantify periods of time like this is comparison. How do you juxtapose your business success in 2021 to 2022 or 2023 given how much has changed? While many companies were able to thrive and grow during the pandemic market, the correction at the end of 2022 has revealed that for some at least, the big numbers they put up were never sustainable.
How, then, can we best measure who had the foresight and the fundamentals to take advantage of those super-selling, low-rate years but still transition gracefully into a down market? The easiest, and most straightforward, way is to simply smooth out the data—using averages or amalgamation to find out who best navigated these unpredictable couple of years.
For the past 35 years, RISMedia’s Power Broker Report has measured the sales volume and transaction count of more than a thousand brokerages all over the country. This year’s report, which looked back on 2022 numbers, saw sales volume fall for 74 of the Top 100 largest brokerages.
By comparison, only three of the Top 100 experienced a drop between 2020 and 2021.
In order to get a better idea as to which brokerages best rode the waves, RISMedia compared 2019 and 2022 numbers. By that metric, most of the top brokerages still thrived—the vast majority saw sales volume rise at least modestly, while just under half (47%) saw transactions increase.
Some brokerages though—both large franchises and smaller teams—did exceptionally well. Most of the companies that saw huge increases in volume were those involved in mergers or acquisitions during the hot pandemic market, which allowed them to better take advantage of all the transactions happening. Others were located in pandemic boom markets (places like Miami, Florida; Austin, Texas, or the Mountain West) and built their brokerages on the housing strength of these regions.
But of course, other companies also had opportunities, and did not experience the same kinds of success. What practices or attributes made some brokers successful, consistent and resilient during such a turbulent time?
Pandemic pioneers
Engel & Völkers Gestalt Group covers a multi-state footprint in the Mountain West with its 40 offices. Out of 100 top brokerages, the company ranked 8th for percentage sales volume increase between 2019 and 2022, up by an impressive 137.3%.
CEO Paul Benson says this sustained growth had everything to do with his agents and values, as well as what he describes as a flexible and balanced approach to expansion.
“We worked hard to build a sustainable culture,” Benson tells RISMedia via email. “We knew agents that were thriving at our brokerage valued being part of something bigger than themselves…this focus made us attractive to new agents, so we have been able to keep a very sturdy growth plan in a financially smart way.”
By the numbers, Gestalt Group saw growth that seemingly defied the volatility of the pandemic while still capturing the strength of the market, with sales rising 60.6% in 2020, and 64.9% in 2021. Those 2020 numbers were enough for the third-best growth rate (out of the Top 100 Power Brokers), soaring during a period when even well-positioned companies took some time to adapt as the first lockdowns swept across the country.
Benson credits the ability to be nimble as a business, but again, lauds the philosophy, expertise and workmanship of his agents in an uncertain time.
“The shifts both up and down in our markets were frankly something I do not think any of us had ever seen in our lifetimes,” Benson says. “We run our 40 offices as one company, so having an elite team for marketing, training and coaching that can reach all areas (helped). But at the same time, keeping the costs spread out throughout the offices is what has helped the most. If you are on our payroll, you are directly involved (as) an agent doing business, which is a core philosophy.”
In Florida, John R. Wood Properties also saw consistent growth through the pandemic—especially strong in the 2021 boom market, when the company grew sales volume by 63.7%. The brokerage also saw some of the biggest transaction growth through those years, including between 2021 and 2022, when a majority of companies saw transactions fall.
Corey McCloskey, EVP of Operations, says it was communication, and a decisive shift at the beginning of the pandemic that put the company in a position to succeed.
“As far as the lockdown is concerned, we did not wait to go into cost-savings mode, and over-communicated from day one with our agents on what was happening from the real estate business,” she says. “No one has a crystal ball about the market, so we arm our agents with the data they need to talk clearly and effectively about what is happening in the market from a macro and micro perspective.”
McCloskey described how John R. Wood’s philosophy centers on “focusing on what we can control.” With a huge proportion of all-cash deals in the region, she says there has been a “big push” on streamlining and integration, as mortgage rates have been less of a factor there.
“We are focusing on streamlining today to make tomorrow easier for our agents,” she explains.
One large real estate compnay also saw some unprecedented success through the pandemic market. United Real Estate, headquartered in Texas but with franchises all across the country, went on an acquisition spree over the last few years—a strategy that paid off, as United ranked at the top of nearly every growth metric among top Power Brokers.
Between 2019 and 2022, in fact, the brokerage saw sales growth of 971.7%.
No, that is not a typo. Nine hundred and seventy-one percent.
Rick Haase, president of United Real Estate, says this growth preceded the pandemic, built on a unique model that supported agents efficiently.
“At our scale, we are able to build/buy and deliver that incredible (services, tools and support) bundle at a fraction of the cost that smaller or other large national broker networks spend,” he explains. “This took a vision and a lot of investment and human effort for sure, but it has provided very atypical results: we’ve moved from start to fifth- or sixth-largest company in the country by transaction count in only a dozen years.”
In one year, from 2019 to 2020, United saw transactions rocket by 447.3%. While that spectacular surge tempered in recent years, the sales volume growth rate for United was highest of any Top 100 Power Broker in two out of three pandemic years, and almost three times higher than the next closest brokerage when looking at the entire three-year period.
“Make no mistake about it though,” Haase added. “You don’t get these results without having an incredible team of employees serving some awesome agents. All of the puzzle pieces need to come together and stay together.”
Keller Williams Atlantic Partners, based in the Jacksonville, Florida, region and led by Mark Dilworth, managed something that almost no other top brokerage did. While almost every other Top 100 company saw sales fall in 2022, KW Atlantic actually accelerated out of the pandemic, with a faster growth rate between 2021 and 2022 than between 2020 and 2021.
“We had recently opened a new office in the Ponte Vedra Beach area, and in doing so, we were able to attract some fantastic talent to our office. This was talent who had not been in business prior to 2020,” Dilworth explains. “It (was) also important to stress to the agents that 2021 and 2022 were real; however, past history shows very clearly that markets go up and markets come down. Both of those cycles together create the market, not just one of them.”
That holistic view seemingly allowed Dilworth’s company to defy the forces that dogged nearly every other brokerage in 2022 (Florida markets have also weathered the market correction better than most other regions).
And KW Atlantic’s nearly 100% sales growth across the three-year period is proof that the company figured out something that transcended the ups and downs of the pandemic. That included a focus on agents, Dilworth explains, especially during the most uncertain periods.
“We were steadfast in trying to remain as ‘normal’ as possible for our agents during those trying times,” he says. “We also went all out in ensuring our agents were recognized for their efforts during the COVID years.”
Dilworth describes how during lockdowns, his team would drive over the course of two days to plant special signs in the yards of award-winning agents, which “(guaranteed) that their family realized how hard (they) worked” during COVID isolation periods.
McCloskey also singled out a push to connect agents and “an increased, sustained focus on recruiting,” which she says was especially important during a volatile market, and credited the company’s agents, staff and management for keeping spirits up.
“The amount of Zoom classes, virtual cocktail parties and free webinars we hosted was off the charts. I heard so many times that the value that we provided during the lockdown helped our agents not only professionally, but personally,” she says.
A lesson learned
The conundrum of trying to juxtapose a historically unprecedented couple of years against the regular ebbs and flows of real estate is not just abstract, or about comparing data. Brokers have repeatedly decried how the media continues to compare 2022 and 2023 to 2020 or 2021, without any caveat or context, which makes the shift back to a normal market seem more like a crash.
From the perspective of a broker, it is also a question of education. Benson says he continues to help guide his agents through that transition, which—especially for those new to the industry—has been overwhelming.
“Many of these agents are not just shocked financially,” he describes. “They are shocked at the emotional rollercoaster they just experienced suddenly having too much time on their hands and not knowing how to find listings, as they have in the past.”
Shifting the focus to long-term strategies and sustainable business models is a weekly conversation, Benson says. He adds that he understands that there are real, significant challenges in the current market, and knows that it is up to him “to teach and grow our agents to see the opportunity” in real estate.
Haase further emphasizes just how jarring that transition is for some agents—even those who started before the pandemic, when rates were still historically low.
“Additionally, some got into the business during a time where it was normal to have 40 buyers come through every one of their open houses. Many were never trained in the disciplined habits and techniques for sound business development practices,” Haase says.
Dilworth agrees, adding that he is focused on helping newer agents learn how to “run a true real estate business,” not just to quickly move through transactions.
“It has been a period where the basics of real estate have to be mastered. For two years it was tremendously crazy in a good way,” Dilworth explains. “So busy at times, that it simply became about getting the job done.”
Long-term success is built on strategic models that can persist through down cycles and leverage tech in appropriate ways, Dilworth says, and he lauds Keller Williams’ tech stack, including “all of the reporting for their business that any agent could use.”
At John R. Wood, McCloskey says that the company’s director of Market Research has been focused on this pandemic exceptionalism for some time, going back to the pandemic market. She says a monthly email going out to agents includes talking points for consumers and data to specifically parse out the unusual transition.
“We as humans have short memories, so we know we are facing an uphill battle with this, but we’re up for the challenge,” she says.
For Haase, tech needed to be an intense focus both through the pandemic and beyond, and he singled out two “turnkey” platforms added by United that were made available to agents for free. He credited this “lean in” attitude as a huge contributor to the company’s success though the volatile 2020 – 2021 period, with all of that contributing to the transition into this new market.
“Tremendous opportunity exists for companies like ours to deliver a smarter, stronger agent base, and we are doing it,” he says. “Where to find listings, how to prospect in inventory-short markets, how their business development disciplines need to change, social media marketing—it’s all been underway, and we are accelerating that effort.”
RISMedia’s 2023 Power Broker Directory ranks the Top 1,000 brokerages by residential sales volume and transactions for 2022, and includes five-years worth of data on each firm. The directory is available exclusively for RISMedia Premier members. For more information about RISMedia’s Premier, click here.
