Real Estate One bets on local platform amid brokerage consolidation

"Consolidation is inevitable, he said. Margins on a brokerage business can't go from an average of about 22% to 13% and not have something happen. Companies such as eXp Realty, The Real Brokerage and other virtual brokerages are part of that shift, he said. But they are still early in their development and are likely to evolve over time."

"Our view is that a strong local platform will be stronger and more competitive than a national platform, Elsea said. National brokerage platforms, he added, ultimately try to replicate what strong local firms already offer: a network rooted in a specific market with deep relationships and services tailored to local agents."

"Everything moves to the middle, Elsea said. The virtual will become less virtual, and the non-virtual will become more virtual. In the long run, he believes most brokerage models will converge somewhere between the two extremes."

The real estate brokerage industry is experiencing accelerating consolidation driven by shrinking margins and new brokerage models. Virtual brokerages like eXp Realty and The Real Brokerage are reshaping the landscape, though they remain early in development. Industry models are converging toward a middle ground where virtual and non-virtual approaches blend together. Rather than pursuing national scale, some independent firms like Real Estate One employ a local dominance strategy, operating multiple brands across different markets to capture approximately 20% market share per region. This approach leverages deep local relationships and market-specific services that national platforms attempt to replicate. By creating a multibrand ecosystem, independent firms can serve different niches simultaneously, from high-service agents to low-cost models, maintaining competitive advantage through localized platforms.

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