America's Next Top Real Estate Model: Tracking the Growth of eXp, Redfin, and Compass

Compass, eXp Realty, and Redfin are three of the largest, fastest-growing brokerages in the U.S. Each operates a traditional brokerage business model and leverages technology as a key competitive differentiator. A deeper look at the rapid rise of each reveals a trio of insightful growth stories — which may very well shape the future of America’s real estate landscape.

The changes to the top 20 U.S. brokerages by transaction count are striking (data courtesy the Real Trends 500). In 2018, the top two brokerages (Realogy and Berkshire Hathaway HomeServices) dwarf the competition; no other brokerage comes close. Fast forward to 2020, and eXp Realty is within striking distance of the top two, followed closely by Compass.

Each business has experienced wildly different growth trajectories. Compare Redfin’s slow and steady growth to the exponential hockey stick curves of Compass and, most impressively, eXp Realty.

The engine room of each company’s growth is driven by agents (as I like to say, agents sell houses, not technology). The corresponding agent count at each company closely mirrors overall transaction count growth. Redfin has far, far fewer agents than its peers, but its agents are exponentially more efficient.

Since 2018, Compass and eXp have grown agent count and transaction volume exponentially, which -- at this scale -- is unheard of, and why each company is so disruptive in the industry.

Reviewing the interesting similarities and key differences between the three companies reveals their different target markets, represented by average sales price. Compass is clearly in the luxury band, while Redfin caters to high priced homes and eXp is closer to the national average home value.

In the end, Compass and eXp are quite similar: fast-growing real estate brokerages fueled by unprecedented agent growth. Both companies leverage cash (or the promise of cash via stock options and/or multi-level marketing) to recruit, and lean on technology as a differentiator.

In 2018, it could have been possible to ignore the companies or dismiss their efforts to grow. But in 2021 they've become too big to ignore, and are cementing -- and growing -- their leadership position in the future of real estate.