Market Share in Puget Sound – Who Sold the Most Property in 2008?
Let’s start with a definition. What is Market Share?
Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company’s sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company’s unit sales volume (in a market) divided by the total volume of units sold in that market. It is generally necessary to commission market research (generally desk/secondary research, although sometimes primary research) to estimate the total market size and a company’s market share.
Yesterday, during a conversation about the Kenmore housing market, one of my neighbors asked me who held the largest market share in the local real estate market. “That’s easy,” I said, “it’s Windermere!” The answer came out of my mouth before I even really thought about it. It’s a perfect example of how powerful branding and brand recognition is. Heck, I work for Keller Williams Realty which is the fourth largest brokerage in the United States. I’m proud of that, BUT, how much real estate is Keller Williams Realty selling locally? Well, curiosity got the best of me and I consulted one of my statistical databases. I limited my search to the percentage of combined sales (both listings and selling transactions) and the simple number of transactions by each company. Here’s what I found:
MARKET SHARE – THE WHOLE PUGET SOUND 2008
MARKET SHARE – KING COUNTY 2008
MARKET SHARE – KENMORE, WA 2008
MARKET SHARE – SNOHOMISH COUNTY 2008
It’s clear that Windermere is the dominant real estate brokerage in our market place; however, it’s clear that “All Others” (meaning the total of many smaller brokerages) actually sell more of the market share as a whole. The logical question then is: “Isn’t Windermere the best brokerage in this area?” In the past decade, certainly, Windermere has been the dominant name in real estate. There has been an increase in the number of smaller brokerages (and the other larger competitors) that have been eating away at Windermere’s market share. It will be interesting to see how all of the dominant players perform in 2009.
January 12th, 2009 at 12:30 pm
Interesting how it varies. In Gig Harbor, Market share by # of listings, JLS is #1, Windermere #2, and Keller Williams #3. Market share in $ Sold last year, Windermere is #1, JLS #2, KW again #3. Percentages are much closer than in your area, as well.
January 12th, 2009 at 12:38 pm
Hi Matt – Have you ever heard financial analysts discuss the transformation of the Fortune 500? In just the last decade, many of the old blue-chip companies have disappeared from the rankings. I have a sense that we are going to see some profound changes in market share. The fact that so many small brokerages have captured a large number of sales is just a forshadow of things to come. The traditional brokerages that charge large fees and splits may not weather this financial storm.
January 12th, 2009 at 1:40 pm
Velly interesting.