According to the 1990 REAL Trends nationwide survey of real estate brokerage firms, the residential real estate brokerage industry continued to consolidate in 1989 as acquisitions, mergers and growth increased.
The just released REAL Trends survey identifies the 100 largest independent residential brokerage firms based on the number of transactions handled in 1989. The REAL Trends study also looks at sales volume, number of agents and offices, and diversification of the regional independents.
Included as number 63 on the list of companies was H. Potter Realtors, a local 12-office firm with 475 sales associates. In 1989, Potter closed approximately 3,400 transactions for a sales volume of $291,000,000.
Ranked number one on the Top 100 list of firms is Long & Foster Real Estate, Inc., a northern Virginia-based firm serving the metropolitan Washington D.C./Baltimore areas. In 1989, Long & Foster closed 40,182 transactions for a sales volume of $6.4 billion dollars. The firm has 174 offices and 5,400 sales associates. The owner and president is P. Wesley Foster, Jr.
"There are over 130,000 residential real estate companies nationally," says REAL Trends co-editor, Laurie Moore. "This means the Top 100 independents represent less than one-tenth of a percent of the nation's firms and yet they control 9 percent of the residential business handled by brokerage firms. Add the fact that the top 100 are generally growing at a more rapid rate than the market as a whole, and you have an example of what is becoming known in the industry as the 'trend toward bigness' -- large residential firms like Long & Foster continuing to grow both in size and market share," continues Moore.
"Over 74,000 sales associates are affiliated with the REAL Trends Top 100 firms. This concentration of agents also illustrates the trend toward larger firms," says co-editor Steve Murray. "According to the National Association of Realtors, about 44 percent of all licensed sales associates are affiliated with only 4 percent of the nation's real estate companies. The REAL Trends survey is a real example of the trend toward a few large firms capturing more and more of the industry's agents."
"These statistics seem to illustrate a consolidation of the industry," adds Moore. "We appear to be moving toward the same sort of distribution of firms in the real estate industry that has occurred in the airline, hotel, and other industries. We may soon have very large firms on one end of the spectrum and small specialized firms on the other end, with not much in between. H. Potter Realtors is an example of the kind of large player which will characterize our changing industry."