Rebounding Home Sales Grow Real Estate Agency Totals

Resurging home sales boosted the 2013 tally for many a real estate company in Arkansas. A measuring stick of the trend is the combined dollar volume of the 10 largest firms in the state, which grew by 23.4 percent.

The dollar volume of the Arkansas operations of Crye-Leike Realtors alone grew by a whopping $291 million. That nearly 28 percent increase pushed the Memphis company’s 2013 tally in the state to more than $1.3 billion, the largest in Arkansas.

“Every market we’re in had gains in ’13,” said Harold Crye, co-founder and CEO of Crye-Leike Realtors. “Some of it was pent-up demand and recognition that the world wasn’t coming to an end.

“There also was a realization for many that interest rates wouldn’t always remain as favorable and that if their job was secure, they needed to go ahead and buy. That was the catalyst for a lot of that activity.”

Crye-Leike is the fifth-largest residential realty firm in the nation, and in addition to Arkansas, the company holds the largest market shares in Tennessee and Mississippi.

2013 was a good year for Crye-Leike in Arkansas and elsewhere with companywide sales volume reaching $5.2 billion, a $700 million increase over 2012.

However, last year’s total was well short of the regional real estate firm’s high-water mark of $6.1 billion in 2006. Companywide sales volume ebbed to $3.8 billion in 2011.

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Arkansas remained a bright spot among the company’s markets throughout the Great Recession and the halting recovery, Crye said. Business at the firm’s northwest Arkansas operations has grown despite the region’s post-2007 real estate slowdown.

Crye-Leike’s 2013 sales volume of $316 million in Benton and Washington counties ranked third behind two Fayetteville firms: Coldwell Banker Harris McHaney & Faucette ($547.1 million, No. 2 in the state) and Lindsey & Associates ($473.5 million, No. 3 in the state).

“We have to keep climbing and see if we can do better,” Crye said of the company’s No. 3 market position in northwest Arkansas.

A west Fayetteville office is in the planning stages, he said. The new location would be the company’s second office in Fayetteville and its seventh in northwest Arkansas.

Keller Williams Market Pro Realty of Fayetteville leapt into the ranks of the top 10 residential realty firms in Arkansas, with a sales volume of more than $158 million.

“We had a nice pop in the second and third quarter last year,” said Jody Hendrix, principal broker/co-owner of Keller Williams Market Pro Realty. “It actually got feverish.”

The 2013 move was powered by the merger of Keller Williams Realty of Northwest Arkansas of Fayetteville (No. 28 in 2012) and Market Pro Realty of Rogers (No. 35 in 2012).

Even taking into account the combined operations, sales at the post-merger firm blossomed by 60.1 percent. Helping the cause was a sales staff further expanded by a healthy dose of individual agents joining the post-merger firm.

“We’ve grown our agent base,” Hendrix said. “We acquired some top talent. It’s going to fatten anyone’s sales.

“Sometimes when you have a merger of agents, you have some breakage. We really didn’t.”

Big sales gains were common among the leading firms in Benton and Washington counties, where the market is averaging about 500 home sales per month.

“We’re all enjoying a general growth in business,” Hendrix said. “Hopefully, we’ll be having this same conversation in the first quarter next year.”

Weichert Realtors-The Griffin Co. of Springdale (No. 7 at $213.5 million) enjoyed a 33 percent increase in its 2013 dollar volume.

“The two most vibrant markets for us right now are Bentonville and Fayetteville,” said Brandon Long, executive broker at the firm’s Bentonville office. “The list-to-price ratio is 98 percent in Bentonville and 97 percent in Fayetteville. New construction is really ruling the roost in Bentonville.”

Big Sales Gains in Northwest Arkansas Real Estate Market

  2013 2012 Change
Keller Williams Market Pro Realty $158.38 million $98.92 million 60.1%
Re/Max Real Estate Results $171.37 million $124.50 million 37.6%
Bassett Mix & Associates Inc. $90.60 million $66.66 million 35.9%
Weichert Realtors-The Griffin Co. $213.50 million $160.00 million 33.4%
Lindsey & Associates $473.54 million $358.92 million 31.9%
Coldwell Banker Harris McHaney & Faucette $547.12 million $423.80 million 29.1%
Re/Max Associates $86.00 million $67.00 million 28.4%
Crye-Leike Realtors $316.00 million $252.00 million 25.3%

Residential Mathematics

The real estate community double-counts the sale of a house in recognition that the buyer and seller are often represented by different agents and companies.

The doubling reflects a system that rightfully acknowledges two sides to every transaction. However, instead of dividing the sales price of a property between the buyer’s agent/company and the sale’s agent/company to determine sales volume, both agents and companies get credit for the entire amount.

If a $100,000 house sells and one company is home to both the listing and selling agents, the company is credited with $200,000.

With this backdrop, the real world dollar total of houses sold is more like half the sales volume reported by companies and agents. Take 5 percent of that total to get a feel for what that translates into in terms of commission revenue, money that actually flows through firms and agents. The dollar volume threshold for this year’s list of top-selling agents remains $4 million, and the minimum for team sellers is $8 million.