The first quarter of 2023 saw a variety of winners and losers in terms of brokerage agent count – the numerical manifestation of agent recruitment and retention.

Why it matters: As I’ve previously asserted, agents are central to the real estate transaction; growth in transaction volumes goes hand in hand with growth in agent count, because agents sell houses.

Dig deeper: Disruptive, low-fee brokerages like eXp Realty, Real Brokerage, United Real Estate, and RealtyOne all added agents during the first three months of the year.

• Meanwhile, some of the largest incumbent brokerages and franchises – Keller Williams, RE/MAX, and Anywhere – all lost agents.

The five largest brokerages and franchises in this list – Anywhere, Keller Williams, RE/MAX, Compass, and eXp Realty – account for over 427,000 agents, down 1.1 percent from the previous quarter.

• Among them, only eXp Realty grew its agent count from the last quarter.
   

• Redfin, with less than 2,000 salaried principle agents, is the downside outlier after three rounds of layoffs.

Real Brokerage is the clear upside outlier, growing its agent count over 20 percent – to 10,000 agents – from the previous quarter.

• 10,000 agents is considerably fewer than Anywhere’s 58,000 or RE/MAX’s 82,000, but Real is catching up to Compass’ 28,000 agents. 

Speaking of Compass, Q1 2023 was the first time that the brokerage’s agent count decreased.

• Context is important: many brokerages lost agents!
   

• But Compass is no longer in the ranks of “fast growing brokerages,” a category it dominated over the past three years – that mantle now passes to eXp Realty and Real (and several other low-fee brokerage models).

What to watch: Agent migration patterns are a significant leading indicator of future brokerage growth.

• In a period of belt-tightening and fewer transactions, agents are moving away from traditional brands and flocking to relatively newer models where they're able to keep more of their commission.

The bottom line: Agents – and not AI, machine learning, a sophisticated CRM, a one-click transaction, nor any other tech buzzwords – sell houses.

• This period of market scarcity reveals the brokerage business models able to thrive in a downturn, as well as those facing more fundamental challenges.
   

• To identify the brokerage business models of the future, one simply needs to follow the agents.