In bygone days, real estate brokerage was a mom and pop, main street, put-out-your shingle kind of business.
That started to change in the 1970’s with the advent of franchising and the expansion of independent, frequently family-owned, real estate companies (the names Tarbell, Ebby Halliday, Howard Hanna, and Allen Tate come to mind), Today, the industry is roughly 50% franchised, 50% independent.
The 1990’s and early 2000’s brought consolidation. Henry Silverman’s Cendant Corporation bought bushels of companies, bringing most of them under the Coldwell Banker brand.
And now, well, holy cow… things are happening. Consolidation is rolling once again, driven, most dramatically, by Compass. iBuying is growing rapidly. Most big markets seem to have at least one well-funded discount/flat fee shop. Virtual or fee-based brokers are attracting agents looking for more freedom and lower costs.
But if you look hard enough, you can still see some of real estate’s past wedged between a yoga studio and a coffee house, or in repose on a side street, sitting quietly alone like an elder at a party.
Here are a couple of them in Northern California’s East Bay, where I live:
It’s easy to romanticize this, and that’s not what I’m after. I think we can probably say, though, that there was a certain seriousness inherent in these small businesses, back when they were the norm. The person or people behind the desks practiced real estate.
Compass has acquired three major brokerages in my market in the past two years, Pacific Union, Paragon, and Alain Pinel. The strong independents that remain, like Red Oak Realty and The Grubb Company, are consolidating weaker independent shops that couldn’t weather the new, hypercompetitive reality.
But there is a small counter-trend emerging on the edge of this maelstrom. New and very small companies are sprouting up. They have been started by serious people who don’t seem to be enticed or cowed by the Compass juggernaut, or driven to do things as cheaply as possible.
They are brokerages, legally, but often function more like teams, with specializations that fit together. They are small enough for leadership to be personal and impactful.
Here are a couple near me:
Abio Properties – 40-ish agents, hip open concept office, started by an ex-big brokerage agent. I see more of their yard signs every week.
Cush Real Estate, 4 agents, super-cool, high-end, boutique-y storefront on highly-trafficked commercial street.
This isn’t just a Bay Area thing. We see this happening all over. Last year, we helped a team open their own boutique brokerage, Happen Houston, because they had a very clear vision that wouldn’t fit within anything that yet existed. We are currently working with an amazing young and small company in Alabama with rock-solid leadership, ops and culture (more to come on them).
I’m not suggesting that this will stunt Compass, or slow the iBuying wildfire. And it certainly does not diminish the reality that many brokerages today find themselves in a downward profitability spiral that seems irreversible.
But I do believe that for those of us whose attention frequently gets drawn to the new, the big, or the bold, it’s worth noting this quieter thing happening.
A bit of our distant past may yet be a small but meaningful part of our future.
Have a nice weekend.