The Proliferation of Real Estate Agencies in Denver

trelora listingWe had an idea about rolloff dumpsters being a leading indicator of home sales. We discuss the early findings of that study in this post: Denver Rolloff Dumpsters: Parking Annoyance or Real Estate Beacon? However, in the collection of that data, even though we were focused on dumpsters, what we couldn’t ignore were all of the different real estate agencies with listings that we had never heard of. And how many there were.

New Extrants to the Market

Driving around Highlands, we expected to see Nostalgic Homes, Bradford, Coldwell, RE/MAX. Instead we saw A Better Way, TKH Realty, Peter Witulski, Envision It Sold, the list goes on. We weren’t really keeping track, but it felt high.

When we got back to the office on June 11, we pulled the listings notes and found there were 91 residential homes for sale in Highlands. And those 91 homes were represented by 66 different real estate agencies. Click here for a breakdown of June 2018 Highlands Listing Data.

Still Really Curious

But we were still curious to find out if this was a trend or just an anomaly. We pulled same month–June–but went back to 2010, and again, just in Highlands above 26th. This was before the market heated up, before pot was legalized. The market was good then, but it was more normal. We found what we had expected to find when driving around in June 2018. A lot of RE/MAX, Nostalgic, Live Urban, Coldwell, etc.

June 2010 – Highlands above 26th

236 homes sold

61 Agencies represented

22% biggest market share (RE/MAX Professionals)

(Full breakdown at the bottom.)

 

We then pulled June of 2017 to see if anything had changed, and here is where the pattern emerged.

June 2017 – Highlands above 26th

193 homes sold

103 Agencies represented

5.7% biggest market share (Your Castle Real Estate)

(Full June 2017 breakdown below 2010 at the bottom)

What is Happening?

For those keeping score at home, for this data select, the number of agencies selling homes in Highlands has expanded by 69% in seven years. The erstwhile biggest player–RE/MAX Professionals–has experienced a loss of market share by 85%, falling from 22% in 2010 to 3.1% in 2017. (This is just snapshot data of same month different years. Perhaps everything goes back to normal in different years or comparing different months, but we believe that the sheer number of listing agencies shows this is a trend, not an anomaly.)

Certainly some big things have happened in Colorado, in Denver, and in Highlands within that time frame, creating market dynamics that have led to a nearly 100% increase in real estate value. Yet the traditional commission rate has not fallen from ~6% as home prices have skyrocketed and inventory continues to be more constrained.

A Real Trends study of real estate commissions points out that, “when listings are scarce relative to the number of Realtors in almost every year the commission rate declines. When the ratio of listings to Realtors climbs (as in 2008-2010) the average commission rate increases. With few exceptions, these data establish a clear pattern.”

Yet commissions have not fallen even with so few homes in Highlands, and Denver more broadly, for so many buyers. In the case that Real Trends studies, when there are fewer homes, there is traditionally more competition, thus a lowering of agent commission rate as an enticement to earn those buyers. However, the case in Denver, and Highlands specifically it would seem, is that agents and agencies have risen because there is now twice as much money at stake.

When home prices double, real estate commissions also double. How many industries give every employee a 100% raise every seven years regardless of performance? Just real estate it seems. In Highlands, with the median home price over $500,000, that’s $30,000 in commissions for the taking on one sale. That is a number that would catch anyone’s attention. Traditional real estate agencies are being devoured by their own greed. Had traditional agencies reduced commissions or changed the structure of commissions from a rate to a fee or made commissions more transparent and negotiable, they might still be on top. Now they have to look over their shoulders at anyone who is willing to take the real estate licensing exam and has a few friends. And that’s a whole lot of people.

 

June 2010 Data – Highlands above 26th

List Office Name Year Month # Sold Market Share
RE/MAX PROFESSIONALS 2010 June 52 22.0%
NOSTALGIC HOMES 2010 June 18 7.6%
LIVE URBAN REAL ESTATE 2010 June 15 6.4%
RE/MAX ALLIANCE 2010 June 14 5.9%
COLDWELL BANKER DEVONSHIRE 2010 June 9 3.8%
MB BINGHAM & CO 2010 June 8 3.4%
COLDWELL BANKER RESIDENTIAL 54 2010 June 6 2.5%
KELLER WILLIAMS REALTY DOWNTWN 2010 June 6 2.5%
KENTWOOD CITY PROPERTIES LLC 2010 June 6 2.5%
JKM ASSOCIATES 2010 June 5 2.1%
STERLING REAL ESTATE GROUP INC 2010 June 5 2.1%
KELLER WILLIAMS DTC 2010 June 4 1.7%
KELLER WILLIAMS RLTY PROF LLC 2010 June 4 1.7%
KENTWOOD CO AT CHERRY CREEK 2010 June 4 1.7%
MB WORKING BY REFERRAL INC 2010 June 4 1.7%
PREFERRED PROPERTIES INC 2010 June 4 1.7%
SAM BILLER & ASSOCIATES INC 2010 June 4 1.7%
AVENUES UNLIMITED 2010 June 3 1.3%
CREED SMITH & COMPANY 2010 June 3 1.3%
DENVER HOMES 2010 June 3 1.3%
MB INTEGRITY REAL ESTATE GROUP 2010 June 3 1.3%
PAISANO REALTY, INC. 2010 June 3 1.3%
PORCHLIGHT REAL ESTATE GROUP 2010 June 3 1.3%
RE/MAX 100, INC. 2010 June 3 1.3%
YOUR CASTLE REAL ESTATE, LLC 2010 June 3 1.3%
BROKERS GUILD-CHERRY CREEK LTD 2010 June 2 0.8%
COLO REAL ESTATE ASSOCIATES 2010 June 2 0.8%
FULLER SOTHEBY’S INT’L REALTY 2010 June 2 0.8%
HOME CHOICE REALTY 2010 June 2 0.8%
JONES HOMES L.L.C. 2010 June 2 0.8%
ONE REALTY, LLC 2010 June 2 0.8%
RE/MAX MASTERS INC 2010 June 2 0.8%
RINGSBY REALTY CORP 2010 June 2 0.8%
360 REAL ESTATE INC 2010 June 1 0.4%
8Z RYAN CARTER 2010 June 1 0.4%
ASSIST2SELL RE PROFESSIONALS 2010 June 1 0.4%
COLDWELL BANKER RESIDENTIAL 18 2010 June 1 0.4%
COLDWELL BANKER RESIDENTIAL 24 2010 June 1 0.4%
COLORADO FRONTGATE PROPERTIES 2010 June 1 0.4%
DWELL ELITE HOMES REAL ESTATE 2010 June 1 0.4%
HOME REAL ESTATE 2010 June 1 0.4%
HOUSEPAD.COM REALTORS 2010 June 1 0.4%
KELLER WILLIAMS DENVER CENTRAL 2010 June 1 0.4%
KELLER WILLIAMS PREFERRED RLTY 2010 June 1 0.4%
LT REAL ESTATE, LLC 2010 June 1 0.4%
MB DAYN FOX & ASSOCIATES 2010 June 1 0.4%
MB HOMESTEAD R E SERVICES, LLC 2010 June 1 0.4%
MB REAL ESTATE PROFESSIONA1S 2010 June 1 0.4%
NEW VISIONS REAL ESTATE 2010 June 1 0.4%
NOUVELLE PROPERTIES, INC 2010 June 1 0.4%
PRUDENTIAL R.E. OF THE ROCKIES 2010 June 1 0.4%
RE/MAX LEADERS 2010 June 1 0.4%
RE/MAX SOUTHEAST INC 2010 June 1 0.4%
REAL LIVING CO PROPERTIES 2010 June 1 0.4%
REALTY EXECUTIVES OF AURORA 2010 June 1 0.4%
REALTY SOLUTIONS NETWORK 2010 June 1 0.4%
RED CHAIR REALTY ADVISORS LLC 2010 June 1 0.4%
SAM BARNES 2010 June 1 0.4%
SELECT REALTY LLC 2010 June 1 0.4%
THE KENTWOOD COMPANY 2010 June 1 0.4%
VOLANTE REALTY LLC 2010 June 1 0.4%

 

June 2017 Data – Highlands above 26th

List Office Name Year Month # Sold Market Share
Your Castle Real Estate Inc 2017 June 11 5.7%
NOSTALGIC HOMES 2017 June 7 3.6%
Keller Williams Realty Downtown LLC 2017 June 6 3.1%
RE/MAX PROFESSIONALS 2017 June 6 3.1%
TRELORA 2017 June 6 3.1%
Kentwood City Properties 2017 June 5 2.6%
Madison & Company Properties 2017 June 5 2.6%
MODUS Real Estate 2017 June 5 2.6%
BRADFORD REAL ESTATE 2017 June 4 2.1%
Brokers Guild Classic 2017 June 4 2.1%
LIV Sotheby’s International Realty 2017 June 4 2.1%
Brixton Real Estate 2017 June 3 1.6%
COLDWELL BANKER DEVONSHIRE 2017 June 3 1.6%
PERRY & CO 2017 June 3 1.6%
Porchlight Real Estate Group 2017 June 3 1.6%
RE/MAX ALLIANCE 2017 June 3 1.6%
RE/MAX Masters Millennium 2017 June 3 1.6%
Redfin Corporation 2017 June 3 1.6%
REDT LLC 2017 June 3 1.6%
TRU Real Estate 2017 June 3 1.6%
Coldwell Banker Residential 14 2017 June 2 1.0%
Coldwell Banker Residential 26 2017 June 2 1.0%
DISTINCTIVE FLATS LLC 2017 June 2 1.0%
Feaster Realty 2017 June 2 1.0%
FLATGRASS REALTY 2017 June 2 1.0%
GREEN DOOR LIVING REAL ESTATE 2017 June 2 1.0%
HomeSmart Cherry Creek 2017 June 2 1.0%
HomeSmart Realty Group 2017 June 2 1.0%
Keller Williams Advantage Realty LLC 2017 June 2 1.0%
Kentwood Co at Cherry Creek 2017 June 2 1.0%
LIVE URBAN REAL ESTATE 2017 June 2 1.0%
MB MARKET MASTERS REAL ESTATE 2017 June 2 1.0%
Metro Brokers / 5280 Homebuyers 2017 June 2 1.0%
ONE REALTY LLC 2017 June 2 1.0%
RE/MAX Cherry Creek 2017 June 2 1.0%
RE/MAX Leaders 2017 June 2 1.0%
RE/MAX of Boulder 2017 June 2 1.0%
Realty One Group Premier 2017 June 2 1.0%
RED CHAIR REALTY ADVISORS LLC 2017 June 2 1.0%
Steps Real Estate 101 LLC 2017 June 2 1.0%
4% REALTY 2017 June 1 0.5%
8Z Real Estate 2017 June 1 0.5%
Anthony Rench 2017 June 1 0.5%
Aspen Grove Real Estate Group 2017 June 1 0.5%
Atrium Realty LLC 2017 June 1 0.5%
Avenue Realty & Mortgage 2017 June 1 0.5%
Berkshire Hathaway Home Services, Rocky Mountain R 2017 June 1 0.5%
BLUE OLIVE PROPERTIES 2017 June 1 0.5%
Brokers Guild-Cherry Creek Ltd. 2017 June 1 0.5%
Buyers’ Slice Realty 2017 June 1 0.5%
COLDWELL BANKER RESIDENTIAL 24 2017 June 1 0.5%
Colorado First Real Estate Ltd 2017 June 1 0.5%
Colorado Home Realty 2017 June 1 0.5%
COLORADO LANDMARK REALTORS 2017 June 1 0.5%
COLORADO PROPERTIES INC 2017 June 1 0.5%
Colorado Realty Pros 2017 June 1 0.5%
COMPLETE REAL ESTATE INC 2017 June 1 0.5%
CS & ASSOCIATES 2017 June 1 0.5%
Ecospace, Inc 2017 June 1 0.5%
Exit Realty Cherry Creek 2017 June 1 0.5%
Focus Real Estate 2017 June 1 0.5%
FOLLOW REAL ESTATE INC 2017 June 1 0.5%
Fresco Real Estate 2017 June 1 0.5%
Generator Real Estate, LLC 2017 June 1 0.5%
Great Way RE Exclusive Properties 2017 June 1 0.5%
Home Team Advantage 2017 June 1 0.5%
HOMES ACROSS COLORADO 2017 June 1 0.5%
HomeSmart Cherry Creek Properties 2017 June 1 0.5%
HomeSmart Realty Group of Colorado 2017 June 1 0.5%
HOMESTAR PROPERTIES 2017 June 1 0.5%
In Balance Real Estate 2017 June 1 0.5%
Independent 2017 June 1 0.5%
Iron Works Realty 2017 June 1 0.5%
JERICHO PROPERTIES 2017 June 1 0.5%
Keller Williams DTC 2017 June 1 0.5%
Keller Williams Executives 2017 June 1 0.5%
Keller Williams Realty Success 2017 June 1 0.5%
MANCHEGO PROPERTIES 2017 June 1 0.5%
MB ANNHOMES & ASSOCIATES 2017 June 1 0.5%
MB Krier Real Estate 2017 June 1 0.5%
MB Properties  by Catherine, LLC 2017 June 1 0.5%
MB SUMMERS REALTY 2017 June 1 0.5%
Metro Denver 1 Realtors 2017 June 1 0.5%
MyCore Properties 2017 June 1 0.5%
Peak Denver Properties LLC 2017 June 1 0.5%
Preferred Properties Inc 2017 June 1 0.5%
Private Label Realty 2017 June 1 0.5%
RE/MAX Alliance – Olde Town 2017 June 1 0.5%
RE/MAX Unlimited Inc 2017 June 1 0.5%
Real Estate Denver Team 2017 June 1 0.5%
REAL LIVING CO PROPERTIES 2017 June 1 0.5%
Realty One Group Premier Colorado 2017 June 1 0.5%
Resident Realty Colorado 2017 June 1 0.5%
REVOLUTIONARY REALTY LLC 2017 June 1 0.5%
SLIFER SMITH & FRAMPTON DENV 2017 June 1 0.5%
STATE WIDE REALTY 2017 June 1 0.5%
STOREY REAL ESTATE & CONSTR 2017 June 1 0.5%
Taylor Realty Group 2017 June 1 0.5%
TRANS WESTERN REALTY 2017 June 1 0.5%
Urban Luxe Real Estate 2017 June 1 0.5%
West and Main LLC 2017 June 1 0.5%
Windermere Metro Denver Real Estate 2017 June 1 0.5%
WK Real Estate 2017 June 1 0.5%
By |2018-08-02T20:19:27+00:00July 5th, 2018|Selling|0 Comments

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TRELORA is the word “REALTOR®” jumbled up for a reason. Traditional agents work for commissions; TRELORA works for you. Instead of charging expensive percentage-based commissions, TRELORA uses the best technology and the best people in the business to provide the same full-service experience at a low flat fee.