Residential real estate brokers upbeat on outlook.

As brokers shrink, Jon Douglas maintains leadership

While 1993 has witnessed the continued contraction of L.A. County's residential real estate brokerage business -- particularly in agent rosters -- many survivors seem well positioned for the home-buying market's elusive rebound (see page 24).

So while recessionary sales and employment figures seem to highlight this year's List of largest local residential real estate brokerages -- based on sales at L.A. County offices for the first nine months of the calendar year -- top industry executives typically expressed optimism about 1994.

Based on improved market activity levels in August and September and an October that kept pace with 1992 figures, "I don't think we'll have to wait until 1995 for a recovery," said Jon Douglas, chairman of his namesake Beverly Hills brokerage -- No. 1 on The List.

As the market awaited that recovery during much of 1993, a variety of factors generated notable movement below the No. 3 slot on this year's List. Last year's No. 4, Northridge-based RR Gable Inc., and No. 9, Pasadena's Herbert Hawkins Inc., joined major brokerage Fred Sands Realtors in declining to participate in this year's survey. And last year's No. 6, Century 21 Emery Real Estate, formerly of Whittier, now lists its home address in Orange County.

So while there was no movement among the top three spots on The List, six of this year's seven other "top 10" firms moved up to fill the voids.

Expansion-minded No. 2, Prudential California Realty of Beverly Hills, also altered this year's List by swallowing up last year's Nos. 17, 19 and 25. This helped open the door for this year's six newcomers -- four of them Century 21 offices -- checking in at Nos. 20 through 25.

But Pru Chairman George Rathman pointed out that his firm added new brokerage offices only through one of the acquisitions. The other expansion moves just added "more quality sales associates" to the operation's existing network.

"That's how you make money today," Rathman explained. Sales agent "overcapacity is the biggest issue; you need to fill your offices with quality, productive agents," he said.

For this year's first nine months, the other pair comprising L.A. County's dynamic trio of top home brokerages saw significant sales volume declines compared to 1992. However, only three others on this year's List lost ground.

Sales at Jon Douglas Co. dropped 18.6 percent compared to last year's first nine months, or from $4.2 billion to $3.42 billion. That figure still leaves Prudential a distant second despite a modest acquisition-bolstered 3 percent sales growth, from $2.34 billion to $2.41 billion. Brentwood-based Coldwell Banker L.A. Regional Operations remains an even more distant third on The List after its sales fell nearly 11 percent, from $1.12 billion to just under $996 million.

Four firms on this year's List boasted 20-plus percent gains in sales activity over 1992's first nine months. They are No. 6 RE/MAX Palos Verdes Realty, No. 13 White House Properties of Woodland Hills, No. 17 Action Network Realty of Norwalk, and No. 22 Century 21 Sparow Realty of Long Beach.

Agent rosters have taken a painful hit at many top local brokerages since last year, with the Douglas and Coldwell Banker operations providing the most dramatic illustrations. The former shed more than 230 licensed agents, and now carries about 1,280, while the latter's count dropped by 400 to 750.

Like Pru's Rathman, Coldwell Banker President David Holloman stressed that the recent "right-sizing" of his agent roster has made his firm much more productive on a per-agent basis. Along with franchising or consolidating a handful of offices, "We've knocked out a lot of agents who weren't able to adjust to this very tough market."