The rise and fall of great real estate brokerage firms

Paul Kennedy’s 1987 book The Rise and Fall of the Great Powers examined how dominant world powers reached extraordinary global influence, only to experience significant declines— often due to shifting economic conditions. A similar pattern has been observed in the corporate world, with companies like Sears, IBM, General Motors, and Kodak rising to dominance before losing their leadership positions.

This cycle of ascent and decline is also evident in the residential brokerage industry. Firms that once commanded the market and struck fear into their competitors are no longer as dominant. Over the past 40 years, we have seen the rise of Century 21, Coldwell Banker, RE/MAX, Keller Williams, and, most recently, eXp Realty — each achieving a period of market dominance before being either overtaken by new players or losing their sizzle via subdued growth or accelerated declines relative to the housing market.

This is not to say these firms are no longer formidable; they remain significant forces in the industry. However, whether measured by agent count, transaction volume, or market share, their once-commanding leads have diminished. The same can be said for many regional and local brokerage firms that were once dominant but have since lost ground.

Key factors that have contributed to this shift

One of the most significant has been the arrival of new competitors with different business models and compensation structures. RE/MAX disrupted Century 21 and Coldwell Banker with its 100% commission model, only to be later overtaken by Keller Williams with its profit-sharing structure. Then, eXp Realty eclipsed Keller Williams with its cloud-based, revenue-sharing approach. Today, eXp faces pressure from a wave of low-cost, virtual brokerage firms. Meanwhile, Compass took a different path, prioritizing high-producing, luxury-market agents and teams while leveraging its proprietary technology platform.

Another contributing factor is what some call the “shiny penny” effect. Many brokerage firms initially gain traction through innovative compensation models, marketing strategies, or agent support services. However, over time, their novelty fades, and competitors emerge with fresh approaches that capture market attention. This phenomenon suggests that brokerages often struggle to maintain the excitement and momentum that fueled their initial growth.

The role of entrepreneurial leadership has also played a critical part in this cycle. During their peak growth years, these firms were often led by visionary entrepreneurs who attracted strong leadership teams with a shared passion for expansion. These founders weren’t solely driven by personal wealth; they sought to build the largest, most successful organizations in the industry. Their leadership teams played a crucial role in scaling these firms and sustaining their competitive edge. However, when these founding entrepreneurs stepped away — often due to mergers, acquisitions, or public offerings — the culture and competitive drive that fueled their firms’ success sometimes diminished. While the decline was rarely immediate, over time, the magic that once defined these companies faded, making way for the next market disruptor.

It remains to be seen whether former brokerage giants — national, regional, or local — can reclaim their past dominance. In my 48 years of observing competition, no firm that has lost its industry-leading position has ever fully regained it. However, history suggests that real estate brokerage will continue to evolve, with new innovators rising to challenge the status quo. The question is: who will be next?

Steve Murray is an advisor for HousingWire and founder of RTC Consulting, a real estate consulting and M&A firm.