Between 2021 and 2023, the CEOs of real estate’s largest public companies had highly varied upside from the sale of company stock – ranging from $145 million to $0 – while their companies had massive financial gains and losses. Why it matters: Executive compensation through stock sales is a worthwhile datapoint to consider when thinking about a CEO’s optimism about the future of their business – and how they are incentivized to lead that business. And in reality, that compensation appears to be very loosely based on a company’s actual financial performance, if at all. Dig d ..read more

    There is an inverse correlation between how likely something is to occur and how much attention it gets – a phenomenon a friend has dubbed the DelPrete Probability Paradox. Why it matters: This leads to attention being focused on the highly exciting, yet least likely scenarios, which dilutes focus and clarity while creating noise and distraction.  Getting informed and being entertained are two separate things; boring headlines don’t sell papers.     Real estate is rife with possibility – news headlines and conference agendas are packed with topics that exist ..read more

    In 2023, the largest, publicly-listed real estate companies had another unprofitable year with over $1.1 billion in losses. Why it matters: Profitability is an important metric – it’s a proxy for a healthy business model that has product market fit, is financially viable, and can generate returns for shareholders. Dig deeper: Net Income (or Loss) is the standard, GAAP-friendly, apples-to-apples method to report a company’s overall financial profitability (or lack thereof). Of all the public companies in the real estate ecosystem, eXp Realty was closest to profitability in 20 ..read more

    I recently wrote about Learning From A New Generation of Brokerages, which includes the migration patterns of tens of thousands of agents across the industry.  Why it matters: Agents change brokerages for a variety of reasons – technology, compensation, support, brand – but it turns out one of the biggest factors may simply be that agents are attracted to new things. During 2023, agents continued to stream out of the big legacy brands for the lure of low-fee brokerage models, where agents can keep more of their commission.     Dig deeper: Aside from compensa ..read more

    Behind the hype of year-end press releases and the incomprehensible density of financial metrics, clarity is emerging on the shifting brokerage landscape. Why it matters: The industry is changing – a new generation of brokerage businesses is rising, attracting more agents and operating more efficiently than their legacy peers. Context: Overall transactions were down 19 percent in 2023 compared to the previous year – a significant market slowdown. eXp Realty, Compass, and Keller Williams outperformed the market, with smaller transaction declines, while the big legacy firms Ho ..read more

    On my recent podcast, Redfin’s Joe Rath and I discussed the Mother of All Metrics – close rate – and its critical importance to online leads and real estate. Why it matters: Close rate is especially relevant in Portal War ‘24; traffic is top of the funnel, but close rate – which correlates to lead quality – will guide the investment decisions of potential customers. Dig deeper: Homes.com has become a serious contender in the portal space, with similar traffic to realtor.com and Redfin, and once Apartments.com traffic is included (CoStar Resi), it surpasses both.     ..read more

    Zillow’s latest momentum is a manifestation of its strategy to diversify revenue across the transaction as it transitions from a lead gen platform to a housing “super app.” Why it matters: As Zillow scales new revenue streams, including Zillow Home Loans, Rentals, ShowingTime+, and Seller Solutions, it is planting important seeds for its next phase of growth. Context: After a pandemic bump, Zillow’s overall revenue declined and has remained flat since 2021 – during one of the worst real estate markets ever recorded.     Over a challenging two years, Zillow’s residen ..read more

    Compass’s for sale listings are up 15 percent compared to the same time last year – just one example of rising activity across the U.S. real estate market. Why it matters: An increase in for sale listings is a welcome sign of more sellers coming to market, good news for businesses in the real estate ecosystem, and a promising start to the year after a depressed 2023. Compass, the nation’s largest brokerage based on sales volume, currently has 2,000 more listings than the same time last year – and that number is increasing.     On a year-over-year basis, the numbe ..read more

    When the market turned in mid-2022, many real estate disruptors began the long and painful process of reducing expenses, laying off staff, and reorienting their businesses to a new, challenging reality. Why it matters: A year and a half later most disruptors are still around, but remain a shadow of their former selves and have yet to show signs of emerging from hibernation. Dig deeper: The pre-2022 low interest rate environment was a breeding ground for real estate tech disruptors that relied on a financial component as the core of their product offering and business model – u ..read more

    Real estate portals around the world have been trying to diversify their revenue streams for years – with mixed results – but one portal’s efforts stand out as a success. Why it matters: Leading German portal Scout24’s consumer subscription product is a rare example of a new revenue stream that’s undoubtedly working – and a novel offering that directly targets consumers. In addition to consumer subscriptions, Scout24 offers the usual suspects of adjacent revenue streams, mortgages and seller leads, neither of which are growing.     Scout24’s consumer subscription ..read more