If you search for residential real estate mergers and acquisitions in your favorite internet search portal, you’ll see many mergers are occurring.
We are seeing a drop on volume of “available” residential properties that agents can list for sale. This “shortage” of available properties that “Listing” agents can make available to purchase also hurts the “Buyer’s” agent on the other side of the transaction which severely limits the properties available for their “buyer” clients to purchase. I believe every market across the US is experiencing this problem.
Note: In case you’re asking, more than 95% of the transactions I’ve researched on the multiple listing services involve separate agents for both sides of each real estate transaction.
The growing threat of (a) iBuyers (ie, “instant” cash buyers / investors) scooping up thousands of homes before they hit the normal buyer market; (b) people using Airbnb and other rental services to rent their properties for monthly income and not listing them for sale; (c) vast number of millenniels with massive student loan debt, no desire to settle down, and lower paying salaries than they expected; and (d) many homeowners who have simply realized that if they sell their homes for a high price, they would just have to find another home for a higher price in today’s market….are all signals to the residential real estate brokerage companies that change and adaptation is in the wind.
One step of adaptation to this shrinking marketplace is through mergers and acquisitions of existing brokerage companies and consolidating the talent. This way, the brokerages can certainly keep and support the volume producers and the brokerage will survive, but what about those agents who don’t produce a lot of volume? Sure, they still hang in there, but the brokerage’s survival depends on the heavy lifters and preventing them from leaving the brokerage.
By merging two or more brokerages together, this better insures the survival of the brokerage at the expense of the low volume agent…which is basically capitalism and economic policies in action that will cause short term disruption in the 60,000-80,000 licensed real estate agents in Georgia (i.e., fewer properties to list, fewer agents are needed to list them).
Real Estate Office Mergers – information from the National Association of Realtors…One quick fact: 88% of firms reported that the number of mergers and acquisitions for the firm has remained the same from 2005 to 2010 and 2011 to 2017.
Some recent residential real estate company mergers and acquisitions
Merger mania… With pressure to stay competitive in an uncertain market, real estate firms (big and small) are scrambling to buy each other up at record rates …. REITs, residential and commercial brokerages and private firms alike are all hunting for companies to buy as a way to boost their bottom lines.
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