It started with talk about nearby markets in Dallas and Austin, but it wasn’t long before the conversation at the Inman On Tour Texas real estate conference turned to the news roiling the industry: the announced acquisition of Anywhere’s real estate brands by brokerage competitor Compass.
The news hit close to home for many of the agents and brokers who were in the Dallas audience on Thursday. A significant number of them indicated that they were affiliated with an Anywhere-owned brand.
And the consensus from speakers on stage at the conference’s first session was that Compass’ big move might only be the beginning stage of a wave of major real estate companies scooping up competitors in bulk.
“I personally believe the consolidation train has left the station,” said Stephanie Anton, president of Corcoran Group’s affiliate network.
When asked by moderator and Inman Group founder Brad Inman whether the idea of consolidation kept them up at night, few real estate professionals in the audience raised their hands.
At the same time, the largest share of attendees indicated they were opposed to the idea of the industry moving more toward a private-listing infrastructure.
Compass’ effort to acquire its competitor Anywhere and its bevy of prominent real estate brands poses an opportunity to extend the reach of its own off-market platforms — and possibly fuel “an arms race you’ve never seen before in residential real estate,” NextHome CEO James Dwiggins said from the stage.
“You have to pay attention to game theory when you’re looking at something like this,” Dwiggins said. “You’ve got one company that’s got now 340,000 agents across the globe. You will see other companies have to respond in kind. They need to get big in order to compete. If someone’s going to do private listings, they’ll launch private listings.”
If this race to consolidate comes to pass, Dwiggins said that in a few years three to five major companies may end up controlling more than half of the U.S. real estate market.
And once that happens, he added, the biggest brokerage companies will have more muscle and more incentive to squeeze agents on commission splits and in other areas that they have trouble doing today.
Not all onstage saw such a move toward consolidation as undesirable.
As a leader at Corcoran, Anton said that she’s seen how consolidation at the local, regional and national levels can provide business owners the resources they need to help them grow.
Anton admitted to being initially shocked to learn her brand’s owner was being acquired by Compass. But by the next day, she recalled, it became easier to digest as she realized that this was the direction the industry had been heading in for years.
“Everybody just keeps their head down and focuses on your business every day, so I don’t think it affects people that much in the long run,” Anton said.
But that doesn’t mean that consolidation’s impact won’t be felt in many ways across the industry.
Sandra Howard, he new chief marketing officer for Keller Williams Realty is no stranger to consolidation. Before joining one of the nation’s most recognizable brokerage brands last month, Howard spent time in other rapidly consolidating industries, including at telecommunications giant AT&T.
“Speaking from personal experience, when mass consolidation takes place, transactions are important,” Howard said from the event stage. “Yes, you do what you do every day. For the most part, that does not change. However, people — employees, agents — need and want to work for something, someone, a company that they align with from an identity standpoint, from a purpose standpoint.”
