Escrow Agencies and Other Real Estate Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 19,800 escrow and real estate services providers in the US facilitate the selling and purchasing of real property as well as securing access to land-based resources. Escrow agencies are neutral intermediaries that collect and hold funds in a trust before they are transferred between buyers and sellers in real estate transactions. Real estate listing services publish information on properties for sale or rent and may also offer special services such as advertising and lead generation to brokers and agents and provide integrated services including financing, title searches, and escrow accounts to home buyers, either directly or through partnerships with third parties. Landmen interact and negotiate directly with landowners to acquire leases for exploration and development of natural resources.
Seasonally Uneven Cash Flow
Cash flow for escrow agencies and other real estate service providers can vary and is affected by seasonal factors that affect real estate activity.
Complicated and Time-Sensitive Transactions
The escrow process is time-sensitive and complicated due to the involvement of numerous third parties in addition to buyers and sellers.
Industry size & Structure
The average escrow and real estate services provider operates out of a single location, employs 4-5 workers, and generates just over $1 million annually.
- The escrow and real estate services industry consists of about 19,800 firms that employ 91,000 workers and generate $23 billion annually.
- The industry is fragmented with the top 50 companies accounting for less than 40% of industry revenue.
- Large listing service providers include Zillow and Costar. Because the escrow process varies by state, most escrow agencies operate within a regional or local market.
Industry Forecast
Escrow Agencies and Other Real Estate Services Industry Growth
Recent Developments
Jun 28, 2024 - Existing Home Sales Drop
- Sales of existing US homes decreased by 0.7% in May from April and were also down 2.8% year-over-year, according to the National Association of Realtors (NAR). The median price for all types of homes in May was $419,000, marking an all-time high and up 5.8% from a year earlier. According to Freddie Mac, as of June 20, 2024, the 30-year fixed-rate mortgage averaged 6.87%, down from 6.95% for the same period in 2023. NAR chief economist Lawrence Yun said, "Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers. The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning."
- High home prices and elevated interest rates have made it more difficult for people in starter homes to trade up for more space, according to The New York Times. More than 60% of current homeowners have a mortgage rate that’s 4% or less, according to Freddie Mac. Many homeowners who purchased their house when interest rates were at historic lows now cannot trade up because it would mean taking on a new mortgage with a much higher interest rate. Homeowners’ unwillingness – or inability – to leave a low rate for a higher one has reduced the inventory of homes for sale, which is contributing to housing inflation. In 2023, there were about 900,000 fewer home sales than in a typical year, according to the Federal Housing Finance Agency.
- Home builder confidence in the single-family market dropped in June to the lowest level since December 2023 amid high mortgage rates and elevated builder financing costs, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell two points to 43 in June 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 29% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged for the twelfth consecutive month.
- Amid a shortage of existing homes on the market, 61% of home buyers prefer new homes, according to a recent survey by the National Association of Home Builders (NAHB). The survey’s results show the highest share of new-home preference since 2007, when 63% of home buyers preferred new construction. Homeowners who locked in a low interest rate before 2022, when the Federal Reserve began raising interest rates, are reluctant to sell and swap their low-interest loan for a higher rate. New single-family homes have filled the void in the market left by a lack of existing homes for sale.
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