Purplebricks Group plc (LON:PURP), the hybrid estate agent, today announced its plans to launch into the New York Designated Market Area (“NY DMA”) in the second quarter of the calendar year 2018.
The NY DMA is the largest DMA in the US, covering 31 individual counties, with over 7.4 million households and over 20 million people. The region is particularly suited to the Purplebricks’ proposition, with real estate commissions reaching as high as 7%1 and an average property sales price of around $561,0002. Transaction volumes for homes priced around this level are double the national median3. The high population density of the area should also allow for accelerated brand awareness when compared to other regions.
Purplebricks is already recruiting Local Real Estate Experts (LREEs) in the area and has already established an office in Midtown Manhattan. The US team, led by Eric Eckardt and Phil Felice, and supported by founders Michael and Kenny Bruce, have considerable local knowledge and expertise of the real estate market in the area.
Purplebricks commenced its US expansion plans when they launched in Los Angeles in September 2017 and subsequently expanded into San Diego, Sacramento and Fresno in January 2018. One of the benefits of the Purplebricks model is its ability to penetrate non-adjacent regional and international markets due to low fixed-costs and their hybrid offering, meaning the Company is able to target the best suited markets quickly.
Commenting on the announcement, Michael Bruce, Purplebricks Group plc Chief Executive Officer, said: “It is a sign of confidence in the potential of the US business that we are today announcing our expansion to cover both the East and West coast, with our planned entry into the New York market. With higher than average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks.
“Our local team have an in-depth understanding of the US market and considerable experience of New York specifically. Whilst early days in the US we are encouraged by the exceptional quality of the Licensed Real Estate Agents that we are able to recruit, which reinforces our belief that we will deliver a better service for our customers whilst saving them thousands of dollars and delivering attractive returns for our shareholders as the business continues to grow.”
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Notes:
1 Management estimates
2 CoreLogic weighted average across counties in the NY DMA
3 National Association of REALTORS® – November 2017 report
