Residential Real Estate Brokerage & Management Industry Overview

Excerpt from Residential Real Estate Brokerage & Management Report

Companies in this industry act as agents or brokers in the buying and selling of real estate in addition to leasing and managing residential properties. Major companies include Long & Foster, Realogy, Re/Max, and ZipRealty (all based in the US), as well as Deutsche Wohnen (Germany), FirstService (Canada), Home Group (UK), and E-House (China).

Competitive Landscape

Demand is driven by population growth. 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 industry is fragmented: the 50 largest companies account for less than 30 percent of revenue.

Products, Operations & Technology

Major services include real estate brokerage (45 percent of industry revenue), leasing residential units to tenants (35 percent), and property management (15 percent). 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), which are covered in a separate industry profile.