Young Blood Making Impact on Industry
Real Estate In-Depth | July 2018
WASHINGTON—The income and sales volume of National Association of Realtors members dropped slightly over the last year, but membership increased as younger members continue to enter the industry, according to the 2018 National Association of Realtors Member Profile released recently.
This past year, there was a rise in new members from 1.22 million in March 2017 to 1.30 million in April 2018. The profile found that 29% of members have less than two years of experience, an increase from 28%.
“While inventory shortages continue and home prices remain high, NAR has seen a whopping 6% increase in membership over the last year. Younger Americans are seeking business opportunities that working in real estate provides, but the overall trend is a slightly older age profile,” Lawrence Yun, NAR chief economist stated.
The survey’s results are representative of the nation’s 1.3 million Realtors; members of NAR account for about half of all active real estate licensees in the U.S. Realtors go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and standards of practice and committing to continuing education.
Realtors’ median age was 54 this year, slightly up from the last two years, at 53. Sixty-three percent of Realtors are female, and the typical Realtor is a 54-year-old white female who attended college and is a homeowner. The most common first careers reported are in management, business or finance, or in sales and retail, both at 16%. Only 5% of Realtors reported real estate was their first career; 72% said that real estate was their only occupation, and that number jumps to 82% among members with 16 or more years of experience.
Sixty-five percent of Realtors are licensed sales agents (same as last year), 21% hold broker licenses (down from 22%), and 15% hold broker associate licenses (same as last year). New members tended to be more diverse than more experienced members; 25% of members with two years of experience or less were minorities, up from 22% last year.
Business Activity of Realtors
According to the survey, the main factors that limit potential clients in completing transactions are difficulty finding the right property (35%), housing affordability (17%), and difficulty in obtaining mortgage financing (12%).
Impacted by low inventory, the typical number of transactions decreased slightly from 12 transactions in 2016 to 11 transactions in 2017. Despite rising home prices again in 2017, the median brokerage sales volume decreased to $1.8 million in 2017 from $1.9 million in 2016.
“A familiar story lingers from last year, as limited inventory continues to plague many housing markets across the country. For the fifth year in a row, the difficulty finding the right property has surpassed the difficulty in obtaining a mortgage as the most cited reason limiting potential homebuyers,” said Yun.
The typical Realtor earned 12% of their business from repeat clients and customers (compared to 13% in 2017) and 17% through referral from past clients and customers (compared to 18% in 2017).
Realtors’ web presence and use of social media has increased in recent years as a valuable marketing tool to reach clients and build online communities. Sixty-eight percent of members reported having their own website, the same number as last year. Members continue to be more comfortable with using the latest technology on a daily basis as 71% of members were on Facebook for professional use and 59% were on LinkedIn (same as last year).
Finally, 80% reported they are certain they would remain in the real estate business, while those who were newest to the profession were least certain they would remain; 5% of all members were uncertain whether they would remain in the business.
Office and Firm Affiliation of Realtors
The survey looked at office and firm affiliation for members and found that more than half of Realtors continue to report they work for an independent company. Fifty-eight percent of those are licensed as brokers and broker associates (up from 56% in 2017), and 49% are licensed as sales agents, an increase of 1% since 2017. Nearly nine in 10 members are independent contractors at their firms, the same as last year.
Forty-four percent of members worked at one office firm while a quarter of members worked at a firm with two to four offices. The typical member had been with their current firm for four years.
The 2018 National Association of Realtors Member Profile is based on a survey of 200,964 members, which generated 12,495 usable responses, representing an adjusted response rate of 6.2%. Information about compensation, earnings, sales volume and number of transactions is characteristics of calendar year 2017, while all other data are representative of member characteristics in early 2017.