Residential Real Estate Brokerage & Management

Residential Real Estate Brokerage & Management

Brief Excerpt from Industry Overview Chapter:

Companies in this industry act as agents or brokers in the buying and selling of residential real estate, in addition to leasing and managing residential properties. Major companies include Anywhere Real Estate, HomeServices of America, Keller Williams, and Re/Max (all based in the US), as well as Countrywide (UK), Deutsche Wohnen (Germany), FirstService (Canada), and Leopalace21 (Japan).

COMPETITIVE LANDSCAPE

Demand is driven by population growth and construction activity. The profitability of residential real estate brokerage and management companies depends on demand for properties and the volume of transactions they handle. Demand and volume are usually higher during periods of strong economic growth and can be negatively impacted by a recession or too much new construction. Large companies have only modest economies of scale and benefit mainly from better name recognition than smaller rivals. Small companies compete effectively by developing expertise in a single market or region. The US industry is fragmented: the 50 largest companies account for about 30% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services include the rental and leasing of homes, apartments, and rooming houses which accounts for about 95% of the revenues. Other service revenues include the rental and leasing of houses of principal residence, principal use, commercial space, office, and professional space. Many companies provide multiple services; for example, companies that lease residential units to tenants might also manage the properties. Some residential real estate leasing companies operate as real estate investment trusts (REITs),...