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What lies ahead for some of the largest real estate companies, one word debt.

CASH

  • Realogy (Coldwell Banker, Century 21, Corcoran, Better Homes and Gardens, Sothebys, etc) has about $ 262 million in cash
  • EXP has about $241 million in cash
  • Douglas Elliman has about $ 209 million in cash.

DEBT

  • Realogy has about $2.5 billion in debt as of end Q2.
  • EXP has about $2.7 billion in debt as of end Q2.
  • Douglas Elliman has about $164 million in debt as of end Q2.
  • Redfin has about $1.24 billion in debt.

What’s ahead for the Big Real Estate Companies for 2022? I have the answers here

Each year, it seems, is more unprecedented than the last.

Thanks to the coronavirus pandemic, both 2020 and 2021 have seen rapid changes in the real estate industry, with soaring home values, brutal competition and the ongoing digitization of the transaction. As OJO Labs chief real estate officer Chris Heller recently told Inman, the takeaway may be that there’s simply “not going to be any more typical cycles” in the industry.Sign up for Inman’s Morning HeadlinesWhat you need to know to start your day with all the latest industry developmentsSign me upBy submitting your email address, you agree to receive marketing emails from Inman.

That sets up 2022 to be as weird and wild as any year in recent memory. It’ll no doubt be a time of challenge for the major players, as well as potential opportunities.

Inman has spent the past month reaching out to executives at the biggest names in real estate, as well as to outside analysts to see what might be in store over the coming twelve months. Here’s what you need to know:

Keller Williams and the ‘Disneyland’ of real estate

Keller Williams President Marc King told Inman that his company has many worthy rivals, but that going forward he sees his firm as “the Disneyland for the real estate entrepreneur where you can create anything.” Other big themes for Keller Williams in 2022 will include:

  • The company’s long-rumored initial public offering remains on many minds, but Keller Williams still hasn’t committed to going public.
  • Keller Williams made a series of high-profile leadership moves in 2021, and the brokerage’s hiring push isn’t over as it continues to invest in launching additional niche segments.
  • Gary Keller famously pitched Keller Williams as a tech company several years ago, and the company’s technological transformation will no doubt continue in the upcoming year.
  • Keller Williams is looking to invest more heavily in agent communities, as well as in training.
  • King also said his company will focus on the physical and mental health of both agents and their families.

Compass and the long game

Compass had an especially big 2021. The year saw the upstart brokerage go public, then experience a wild ride in the stock market. At the same time, Compass’ rapid growth and aggressive recruiting tactics have made it a rival, and legal target, of seemingly everyone. But co-founder and CEO Robert Reffkin recently told Inman that 2022 will be the year the naysayers are proven wrong. Here’s what the company is planning:

Compass wants to round out the end-to-end tech experience, and recently announced its first consumer-facing platform, dubbed Client Dashboard.

The brokerage has also recently made major investments in ancillary services such as mortgage and title, and in the near future plans to launch OriginPoint, a joint-venture mortgage company.

While much of the industry zigs toward iBuying and power buying, Compass told Inman it will zag, avoiding those segments for the time being.

The Compass story is one of rapid market expansion, and 2022 should see that process continue.

The past 12 months have been brutal ones for many publicly traded real estate companies, but Compass has suffered more than many. However, Compass East President Neda Navab recently told Inman she expects a rebound in the near future.

eXp Realty and rapid growth

Over the last year, the dominant story about eXp Realty has been growth. Thanks to a motivated community of agents, eXp has managed to win over team after team — prompting OJO’s Heller to recently observe “that they’ve just come from nowhere and blazed past everybody.” And unique growth means the company will have unique challenges and opportunities in 2022:Innovation has been part of eXp’s pitch from the get-go, but other brokerages are starting to find ways to join eXp’s once-exclusive club. That means eXp will to have to figure out ways to keep its edge.

Growing quickly is one thing, but the coming months will also test eXp’s ability to scale up and effectively manage that growth.

EXp agents routinely site the company’s stock options as a major draw, but riding the ups and downs of the market has been a challenge in recent months, and will likely continue to be so in 2022.

Company founder Glenn Sanford recently suggested his firm could hit 500,000 agents in five years. It’s a lofty goal that was met by some skepticism, but it hints that the company’s focus in the near future will be maintain its rapid growth rate.

The metaverse is the buzzy new thing in the tech world, and happens to be one of eXp’s area’s of expertise. The question now is how the brokerage will lead in the virtual world space.

Zillow and a major stumble

In November, Zillow shocked the industry when it revealed plans to shutter Zillow Offers, its iBuying arm. The demise of Zillow Offers ended up being one of the biggest real estate stories of 2021, and its implications are still being debated today. It also means Zillow has its work cut out for it in 2022. Here’s where the company is going:

  • First, Zillow has to deal with the fallout of Zillow Offers. That means unloading thousands of homes (a process that is already well underway), and convincing the world that the company remains on firm footing.
  • With Zillow Offers defunct, Zillow could now pivot into power buying, a buzzy trend that is more asset-light than iBuying.
  • Zillow bought ShowingTime in 2021, and during a recent conversation, Zillow’s chief industry development officer Errol Samuelson said the company hopes in the coming months to improve and refine the showing experience.
  • Zillow provides leads to thousands of agents, but is also resented by some in the agent community. One of the company’s big challenges, then, is winning over a community that’s key to its bottom line.
  • Beyond power buying, Zillow also needs to figure out how it’s going to evolve. As real estate analyst Mike DelPrete recently told Inman, the company needs “to be Zillow 3.0 not Zillow 1.0.”

Opendoor and defending the crown

The demise of Zillow Offers left Opendoor the undisputed king of the iBuying space. But beyond vanquishing rivals, 2021 was big for Opendoor in other ways. It was, for instance, the iBuyer’s first full year as a publicly traded firm. And it expanded, made acquisitions and, despite an ongoing pandemicsaw revenues soar.

Given that track record, the entire real estate and financial industries will be watching Opendoor in the coming months. Here’s what to watch for:

  • The most important issue for Opendoor shareholders is how it will become profitable. The company has made progress on that front but is still losing money. At some point, that’ll have to change.
  • Opendoor has successfully grown via geographic expansion, and observers expect it to continue that process in 2022. It’ll also probably need to expand its “buy box,” or the criteria it uses to purchase homes.
  • Opendoor has managed to add a variety of ancillary services to its repertoire, though it remains to be seen how big a role such services can play in the ongoing quest for profitability.
  • Opendoor is hands down the biggest name in iBuying, but nearly every major name in real estate is encroaching on its turf. So, the company will have to develop new ways to stand out.
  • In the wake of Zillow Offers’ demise, Opendoor stressed that it was still buying and selling houses. But a stumble by a major competitor did prompt a debate about iBuying’s viability generally, and Opendoor has to convince outsiders that it won’t suffer from Zillow’s fate.

CoStar and the residential market

CoStar was the main character in one of 2021’s spiciest real estate stories. Following the company’s 2020 announcement that it would buy Homesnap, CoStar and Zillow increasingly appeared to be on a collision course. CoStar CEO Andy Florance also became increasingly willing to criticize the portal, hinting that he sees Zillow’s practices as “blackmail.” The past year, in other words, saw CoStar throw down the gauntlet. Here’s where that might lead going forward:

  • The biggest single challenge for CoStar is figuring out how to translate its significant success in commercial real estate to the residential space.
  • CoStar has considerable resources, but it’s also playing catchup to much more established brands in residential real estate. The coming year, then, will be a test to see if it can in fact close the gap.
  • Florance has repeatedly stated that his company will not follow Zillow’s lead, for example by doing what he described as “hijacking” listings. However, that means another major challenge for CoStar in 2022 will be figuring out some alternative business model.
  • CoStar’s entry into residential real estate was celebrated by agents who were dissatisfied with Zillow. The question now, though, is if the company can maintain that enthusiasm and win over the agent community more broadly.
  • Finally, CoStar is going to have to win over consumers in the near future, many of whom aren’t yet familiar with the brand.

Redfin and going slow

Redfin is an iBuyer, a brokerage and a portal, but it isn’t the biggest or flashiest of any of those things. Instead, the company has managed to carve out a niche for itself via discipline and by growing slowly and steadily (by real estate startup standards at least). Here’s what that means going forward:

  • Redfin’s slow but steady pace has worked so far, but as time goes by, the trick will be making sure it hits just the right growth velocity so that it doesn’t over extend itself, but also doesn’t fall behind.
  • Company CEO Glenn Kelman recently told Inman Redfin is looking to evolve more products, as well as more options for consumers.
  • Redfin is an iBuyer, albeit one that’s much smaller than Opendoor. Kelman has suggested iBuying will remain a niche offering going forward, so the question will be if that’s the right strategy, and how the market will respond.
  • Redfin bought RentPath in 2021. The company plans to add rental listings to its site in 2022, making rentals one of the clearest and most concrete initiatives Redfin will embark on in the near future.
  • Kelman and Redfin have taken stands on social justice issues such as discrimination and crime data. The coming months will test how the market responds to a company that’s willing to stand up on political and ethical issues.

Realogy and top dog status

Despite a rapidly evolving real estate landscape over the last two years, Realogy has managed to maintain its spot as real estate’s top dog. However, some also wonder if a rival could ultimately snatch Realogy’s crown. The challenge ahead for Realogy, then, is maintaining its dominance as an ever bigger crowd of upstarts come for it. Here’s how it’ll do that:

  • In a recent conversation with Inman, CEO Ryan Schneider pointed to RealSure as a fruitful area for growth. RealSure is Realogy’s iBuying project, and Schneider said it “has a lot of growth potential, and we’re going to be investing for that growth in 2022.”
  • Realogy also plans to double down on mortgage and title services in 2022, meaning the company is among the firms in pursuit of an end-to-end platform.
  • Schneider has previously said Realogy’s luxury business outpaced its overall volume growth year-over-year in 2021. And he’s indicated that luxury will continue to be an area of focus for Realogy going forward.
  • Some companies try to build an entire tech stack themselves. Realogy, on the other hand, is opting for a more collaborative approach. That means 2022 will be part of an ongoing test of that strategy.
  • Finally, Realogy has to defend its place on the real estate leaderboard. But Schneider told Inman he’s not worried, adding that “we’ve been gaining market share for the past five quarters.”

RE/MAX and modernization

RE/MAX has long been one of the most stable brands in real estate. The brokerage was founded in 1973, went public in 2013 and is often cited as one of the most recognizable real estate brands by consumers. That kind of longevity fosters stability, but it can also sometimes pose a challenge when it comes to keeping up. Here’s how RE/MAX will contend with that challenge:

  • Teams have been one of the big themes in real estate lately, and company President Nick Bailey recently told Inman “we’ve got some fun things that we’ll be doing next year to not only continue with that, but enhance it as well.”
  • Bailey also told Inman that there’s a lot of “noise” in the industry right now, and that RE/MAX wants to help agents understand how to cut that noise out and “stay focused and make sure that they’re selling a lot of real estate.”
  • RE/MAX helped create the current franchise model, but given the wave of innovation in the industry lately, the company is now tasked with trying to bring that model into the future.
  • Low inventory has been a persistent problem for many companies over the last two years, and Bailey noted that RE/MAX is not immune from this challenge going forward.
  • RE/MAX delivered solid earnings results throughout 2021, but its going to need to keep an eye on agent count in 2022 — especially as some rivals have managed to best it on this front recently.

Offerpad and the fight for attention

Offerpad is a dedicated iBuyer, but frequently plays second fiddle to Opendoor. That means it faces many of the same opportunities and challenges as its bigger rival, with the added task of proving that it too can compete in the iBuyer arena. The company had a big year in 2021, but it’s still under the microscope going into 2022. Here’s what to watch for:

  • Offerpad’s market share is significantly smaller than Opendoor’s, which means it may have to compete for consumers on price if it wants to gain ground. It also has to establish clarity of purpose in a crowded market.
  • In September, Offerpad debuted as a public company. That means it has to ride waves of unpredictability in the market while impressing investors — something that may be harder to do after the fall of Zillow Offers.
  • On the other hand, the end of Zillow Offers may also represent an opportunity in 2022 that iBuyers such as Offerpad can take advantage of. For example, there should be more inventory on the market, as well as less pressure on iBuyers’ fees.
  • Offerpad, along with other iBuyers, also faces challenges when it comes to the agent community — which sometimes views the companies as anti-agent. Reversing that perception, then, could unlock new market opportunities.
  • Growth will also be a big part of Offerpad’s 2022, with the company needing to hit just the right velocity as it expands.
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