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 18,700 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 3-4 workers, and generates just over $1 million annually.
- The escrow and real estate services industry consists of about 18,700 firms that employ 88,600 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
Apr 26, 2024 - Industry Growth Moderates
- The escrow agencies and other real estate services industry are expected to experience weaker sales growth in 2024 after a slight softening of demand in 2023 and some solid gains in the years during the pandemic. The industry’s year-over-year sales rose 2.6% in 2020, 7.9% in 2021, 7.2% in 2022, and 6.9% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate to 4% in 2024, then see steady average annual growth of about 4.6% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Some homeowners are moving ahead with selling their homes despite being in one of the most challenging housing markets in years, according to The Wall Street Journal. The market has calcified as sellers try to wait out high interest rates. However, some sellers feel they no longer have time to wait as their growing families need more space, as they move for a new job, or need to downsize as they age in place. While buyers and sellers are encountering sluggish market conditions, there are signs of improvement. As of the third week of April, the number of new listings for the previous four weeks was up 11% compared to the same period a year earlier, according to Redfin. Still, other metrics underscore housing’s headwinds; in February, homes spent a median of 48 days on the market compared to 26 days in 2022, according to Redfin.
- Sales of existing US homes decreased by 4.3% in March from February and were down 3.7% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves. There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market."
- Mortgage applications for new home purchases increased 6.1% in March compared to the same month a year earlier, according to the Mortgage Bankers Association (MBA). Applications were up 1% over February. However, the MBA noted that while applications saw year-over-year improvement, the annual growth rate was still the slowest since September 2023. The MBA’s Vice President and Deputy Chief Economist Joel Kan said, “Homebuyers remain adversely impacted by strong home-price growth and mortgage rates hovering around 7 percent. The FHA share of applications did increase in March, exceeding 26 percent, compared to a 24 percent average for the prior 12 months. A higher FHA share can be a sign of more first-time buyer activity, but that segment of buyers is also more sensitive to affordability challenges.”
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