The historic downturn in real estate is shaking things up among Sonoma County's residential brokerages, with new players entering the market and smaller firms getting swallowed up.
In the midst of a four-year slump in business, companies are looking to attract top agents from rival firms in order to gain a bigger share of the housing market, brokers said.
"All of the brokerages are hoping to gain productive people," said Rick Laws, manager at Coldwell Banker in Santa Rosa. The companies, he said, are jockeying for position in order to make money in the next good market.
This year a new company entered the county and quickly has become one of the biggest brokerages.
Wine Country Group by Better Homes and Gardens, part of Pleasanton-based Better Homes and Gardens Mason-McDuffie, ranks second behind Coldwell Banker for total home sales during the first nine months of 2011, according to multiple listing data. Since February, the company has acquired offices that previously were part of Frank Howard Allen and Pacific Union.
Ranked in order behind Coldwell Banker and Wine Country Group are Frank Howard Allen, Century 21 Alliance, Creative Property Services and Keller Williams Realty.
In the coming years, "some of us will grow, some of us won't be here anymore and they'll be some new players come on the scene," said Brian Connell, broker/manager for Frank Howard Allen in Santa Rosa. The regional company, based in Novato, has plans to grow and this year opened new offices in Sonoma, Healdsburg and Kenwood, he said.
Among the new players is San Rafael-based Bradley Real Estate. Two weeks ago the 380-agent company opened its first office in the county. Bradley already does work in Petaluma, and President Robert Bradley has plans for up to 50 agents to eventually work out of its office in Santa Rosa.
Among the agents moving over to Bradley is Trish McCall, who ranks 16th among agents for Santa Rosa home sales in the last 12 months. In that time, she was involved in 21 sales worth nearly $8.4 million.
Formerly with CPS, McCall said she chose Bradley because "this is a company that really has a pulse on what's going on."
"When this market turns, we are going to go crazy and I want to have a company that will support me to the level that I need," she said.
Beside the large firms, small brokerages with a dozen or fewer agents have emerged in the last four years.
The small companies include W Real Estate, Terra Firma Global Partners and the new Advantage One Real Estate, all in Santa Rosa. These company's owners contend that in the Internet era, they can compete well with the big companies while remaining small and locally owned.
While there's been growth in the large and small brokerages, in the last year several mid-sized firms of 20 to 50 agents have closed their doors or become absorbed into bigger companies. They include Prudential California Realty offices in Santa Rosa and Rohnert Park, Pacific Union offices in Santa Rosa and Petaluma and Santa Rosa-based Hurd Real Estate.
Cary Bertolone, co-owner of Bertolone Realty in Santa Rosa, said his 25-agent office is unusual in today's real estate industry.
"There's very few companies left with 10 to 30 agents," he said. Even so, he maintained his 53-year-old family business can survive and "my office is full of people who don't want to work for a big company."
Plunging home prices and a sluggish economy have taken their toll on the housing market.
In 2005, county home buyers purchased $4 billion worth of houses and condominiums. But since 2007, the total sales volume has never exceeded $2.3 billion. Last year it amounted to only $1.9 billion, the lowest figure in 11 years.
The median price for single-family homes dropped from $619,000 in the summer of 2005 to $305,000 in February 2009. Last month the median stood at $330,000.
The downturn has thinned the ranks of those selling real estate. Last month the North Bay Association of Realtors reported almost 2,800 members, down from 3,300 four years earlier. But brokers said many of those members are not active and did not sell even one of the 4,754 houses and condos purchased last year.
Over the past three decades, the county has seen nationally branded real estate companies take an increasing share of the market, even as local firms disappeared.
A key moment came in 1998 when one of the largest local firms, Polley Polley & Madsen, was sold to a franchise of Coldwell Banker. That and other brokerage purchases quickly made Coldwell Banker the county's largest real estate company, based on dollar sales. That spot formerly had been held by Prudential California Realty.
Today one company, New Jersey-based Realogy Corporation, owns several of the county's biggest real estate brands, including Coldwell Banker, Century 21, Better Homes and Gardens and Sotheby's International Realty. Typically franchises own the local offices of those brands.
In the good years, real estate agents typically are too busy to move from one brokerage to another, the brokers said. But when times get tough, both the agents and brokers consider making changes.
Bradley said in good times or hard times, successful sales agents need to feel motivated. He said he wants to create enough excitement for his staff that they will help attract top agents from other companies.
"My recruiting plan is simply to be really good to my agents," Bradley said.
The other companies said they can't afford to stand still.
Tony Rossi, manager of CPS in Santa Rosa, acknowledged that his company went from five offices to three in the downturn. It now has about 250 agents.
Even so, Rossi said, "we've got to keep recruiting and keep growing, too."
Eileen Morelli, the majority stockholder and operating principal for the local Keller Williams franchise, said her 5-year-old company continues to grow. Keller Williams now has 140 agents in the county and this month plans to open a second Santa Rosa office and franchise in the Fountaingrove area. Morelli also will be the majority stockholder in that franchise.
September was one of the company's best months, with $22.6 million in sales, Morelli said. As a result, Keller Williams distributed to its local agents $22,203 in profit sharing, she said.
"When you have agents who are invested in the company, they're all in it together," Morelli said.
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