Abstract
This article is the winner of the Real Estate/Brokerage Agency manuscript prize (sponsored by the Center for the Study of Real Estate Brokerage and Markets at Cleveland State University) presented at the 1999 American Real Estate Society Annual Meeting.This study examines the developments in the residential real estate brokerage market over the last decade. In particular, the study focuses on how technological and structural changes in the market have impacted firm revenues, costs and profitability. The analysis is conducted using four national data sets provided by the National Association of Realtors. The results reveal that brokerage performance begins suffering with the recession of 1990, which triggered a period of consolidations and failures that show no sign of letting up. Further, the results suggest that firm size is a significant factor in determining performance. Small firms suffer due to their inability to take advantage of economies of scale, while large firms incurred significant costs attempting to maintain and/or increase market share.
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