T
he ebb and flow of dominance in the real estate brokerage industry has been a recurring theme over the past four decades. Like the great powers that rose and fell on the world stage, as chronicled by Paul Kennedy's 1987 book The Rise and Fall of the Great Powers, companies like Sears, IBM, and General Motors have seen their market leadership slip away.
A similar pattern is evident in the residential brokerage industry, where firms once at the pinnacle of success now face stiff competition. Century 21, Coldwell Banker, RE/MAX, Keller Williams, and eXp Realty are just a few examples of companies that achieved dominance before being overtaken by new players or losing their edge.
While these firms remain significant forces in the industry, their market share has diminished over time. The arrival of new competitors with innovative business models and compensation structures has been a key factor in this shift. RE/MAX's 100% commission model disrupted Century 21 and Coldwell Banker, only to be later eclipsed by Keller Williams' profit-sharing structure. eXp Realty then rose to prominence with its cloud-based revenue-sharing approach.
However, the "shiny penny" effect has also played a role in this cycle of ascent and decline. Brokerages often gain traction through innovative approaches, but their novelty eventually wears off, and competitors emerge with fresh ideas that capture market attention. The departure of visionary entrepreneurs who drove growth and innovation can also contribute to a firm's decline.
In the real estate brokerage industry, entrepreneurial leadership has been instrumental in shaping the trajectory of dominant firms. Founders like those behind Century 21, RE/MAX, and Keller Williams attracted strong leadership teams with a shared passion for expansion. However, when these entrepreneurs stepped away, the culture and competitive drive that fueled their firms' success sometimes diminished.
The question remains: can former brokerage giants reclaim their past dominance? History suggests that no firm has ever fully regained its industry-leading position after losing it. Yet, the real estate brokerage industry will continue to evolve, with new innovators rising to challenge the status quo. The next disruptor is likely already on the horizon.
