Compass CEO Robert Reffkin may have said it best when he told investors and analysts listening to the firm’s fourth-quarter earnings call that 2022 was a “very difficult year.”
Despite the challenges Compass and Reffkin faced in 2022, his firm still managed to claim the No. 2 spot on the 2023 RealTrends 500 Public Independent brokerage rankings, second to eXp Realty which claimed the tops spot. The firms are ranked by transaction sides.
This is a new category in the RealTrends 500 brokerage rankings.
In 2022, Compass closed 210,365.00 transaction sides, recording a 6% annual decline in revenue to $6.0186 billion, and a net loss of $601 million.
As Reffkin and Compass look to claim the top spot on both the transaction side and sales volume rankings in the future, the firm’s CEO is looking to its technology platform as a springboard toward these goals.
According to Reffkin, agents joining Compass most often cite the firm’s technology offerings as their main motivating factor.
“We continue to differentiate ourselves through our technology platform,” Reffkin said. “It is an asset for Compass because it helps attract and retain agents. It makes them more productive and it also gives us the ability to attach other services, which will further monetize the platform.”
Moving forward, the firm is looking to integrate title and escrow services into its agent platform. It is currently testing a beta version of this product in its Southern California markets.
eXp takes top spot
The top spot was claimed by eXp Realty, which closed 397,138.0 transaction sides in 2022. The Glenn Sanford-helmed firm also topped the overall RealTrends 500 rankings by transaction sides.
Although eXp saw its net income fall from $81.16 million in 2021 to just $15.42 million in 2022, the firm did record a 22% year-over-year increase in revenue, which came in at $2.6 billion. In addition, in a year when the industry saw an 18% yearly decline in existing home sales, eXp reported a 15% increase in the number of transaction sides closed by its agents.
While he is satisfied with his firm’s performance, Sanford wants more growth.
“To drive the next phase of eXp’s growth — and one of the reasons why I came back as CEO of eXp Realty — was to continue our focus on the agent-centric nature of the real estate brokerage, leveraging our scale with the ultimate goal being the No. 1 worldwide real estate brokerage and brand, and we’ve done a great job so far,” Sanford told investors and analysts listening to the firm’s fourth quarter earnings call.
Redfin claims the third spot
The third spot was claimed by Glenn Kelman’s Redfin, which recorded 66,554.00 sides in 2022.
There is no denying that 2022 was a rough year for Kelman’s firm. In June, Redfin laid off roughly 8% of its workforce and in November, it shut down its struggling iBuying operation. These challenges resulted in a net loss of $321.1 million for the year, despite a 19% annual increase in revenue to $2.284 billion.
Despite these challenges, Kelman was optimistic about the future on the firm’s fourth-quarter earnings call, his spirit buoyed by an increase in the number of repeat or referral business transactions Redfin agents closed in the fourth quarter. According to the firm, these types of transactions accounted for 34% of sales in Q4, up from 32% a year ago.
“More than ever, the agents Redfin employs today are capable of driving loyalty sales,” Kelman said.
Fathom, The Real Brokerage and Douglas Elliman round out the public firms
Up next in the No. 4 spot was Fathom Holdings Inc, which closed 44,707.00 transaction sides in 2022. Overall, Fathom recorded a 14% annual increase in transaction growth in 2022 and a 25% year-over-year increase in revenue to $390.615 million. However, the firm still recorded a net loss of $27.626 million last year.
“Fathom delivered solid results in year-over-year revenue growth, agent growth, and transaction growth, and despite the current difficult market conditions, we remain optimistic about the year ahead. Our results validate our belief that our model offers the greatest value to agents in all market conditions,” Joshua Harley, Fathom’s CEO said in statement. “Even with today’s economic uncertainty and subdued real estate market conditions, we believe that Fathom has a long and positive runway ahead and we expect to turn the corner towards profitable growth in the coming quarters while starting to really show the operating leverage in our business.”
After recording 34,184.00 transaction sides in 2022, The Real Brokerage rounded out the top five. Although the firm recorded a $20.6 million net loss in 2022, revenue was up 214% year over year to $318.8 million, boosted in part by a 181% annual increase in transaction count.
And claiming the final spot on the list was Douglas Elliman Realty, whose agents closed 26,427.00 last year. Like some of the other brokerages on this list, 2022 was not kind to the New York-based firm, which saw its yearly revenue from 1.35 billion in 2021 to $1.15 billion in 2022, resulting in a net loss of $5.622 million compared to net income of $98.838 a year ago.