Realtors Cite Inventory as Buyers’ Top Challenge

WASHINGTON – For 2022, 32% of Realtors® named “lack of inventory” as the most important factor limiting potential clients from making a purchase, according to the National Association of Realtors’ 2023 Member Profile, which analyzes members’ business activity and demographics from the prior year.

Housing inventory in 2022 fell to the lowest level recorded since 1999 as homebuyers entered the market at a frenzied pace to lock in historically-low interest rates.

“The report’s findings clearly show that the lack of housing inventory is impacting Realtors’ ability to find buyers a home,” says Jessica Lautz, NAR deputy chief economist and vice president of research. “Housing inventory and affordability continue to be the top obstacles that hold back potential clients in the housing market.”

Business characteristics of Realtors

Nearly two out of three Realtors (64%) hold sales agent licenses, while 20% hold broker licenses and 18% hold broker associate licenses; and 70% specialize in residential brokerage. Relocation, residential property management and commercial brokerage are members’ most common secondary specialty areas, generally unchanged compared to 2021.

Members typically have 11 years of real estate experience, up from eight years in 2021. The number of members with less than two-years’ experience was 25% in 2021; in 2022, that dropped to 17%. However, those with 16-plus-years’ experience increased to 42% in 2022, up from 39% in 2021. The number who say they’ll definitely stay in the business for two more years was the same year-to-year at 76%.

Business activity of Realtors

The typical NAR member had a higher sales volume ($3.4 million) in 2022 than in 2021 ($2.6 million), though their total number of transactions (12) remained the same.

The typical Realtor earned 27% of their business from previous clients and customers, an increase from 16% the year before. The most experienced members – those with 16 or more years of experience – reported a higher number of referrals, but their percentage dropped slightly in 2022: 43%, down from 44% the year before. Members with two years or less experience reported no repeat business.

Overall, Realtors earned a median of 24% of their business from referrals, an increase from 20% in 2021. Referrals were also more common among members with more experience – a median of 30% for those with 16 or more years of experience vs. 31% in 2021.

Realtors’ income and expenses

The median gross income for Realtors increased to $56,400 in 2022, up from $54,300 in 2021. Realtors with 16 years or more experience had a median gross income of $80,700, down from $85,000 in 2021. Realtors with two years or less experience had a median gross income of $9,600, an increase from $8,800 in 2021.

However, higher inflation impacted Realtors last year as total expenses increased to $8,210 from $6,250 in 2021.

Realtors’ office and firm affiliation

Most Realtors (55%) worked with an independent company, and 89% were independent contractors at their firms – both figures nearly identical to 2021. Slightly less than half (43%)  worked at a firm with one office and 24% worked at a firm with two to four offices.

The typical Realtor had a median tenure of six years with their current firm, up from a median of five years in 2021.

However, business ownership changes played a bigger role in 2022: 26% of members reported working for a firm that was bought or merged in the past two years, up from 8% in 2021.

Unchanged since 2021: Errors and omissions insurance was the most common benefit provided by members’ firms in 2022.

Technology and Realtors

Top tech used daily:

• Smartphone with wireless email and internet capability: 95%
• Laptop or desktop computer: 90%

Smartphone features used most often:

• Email: 93%
• GPS apps: 48%
• Social media: 46%

Top forms of client communication:

• Text messaging: 94%
• Phone calls: 92%
• Email: 90%

Other tech uses of note:

• 66% of members have their own website
• 7% use drones themselves as part of their business
• 43% have hired a professional drone operator
• 4% use 3D/virtual tour technology daily
• 1% use virtual staging technology daily

Demographic characteristics

Eighty-one percent of Realtors were white in 2022, up from 77% in 2021. Hispanics/Latinos accounted for 10%, followed by Black/African Americans (5%) and Asian/Pacific Islanders (5%). However, new Realtors tended to be more diverse. Among those who had two years or less experience, 41% were racial minorities in 2022, an increase from 37% one year earlier.

The percentage of female Realtors in 2022 (62%) declined from 66% in 2021. The median age of Realtors was 60, up from 56 the previous year. Just over half of members – 52% – were over 60 years old and 1% were under age 30.

Overall, Realtors’ education level exceeded that of the general public: 91% had some post-secondary education, with 31% completing a bachelor’s degree as their highest level of educational attainment.

Two-thirds of members (66%) reported volunteering in their community, with volunteerism most common among members aged 40 to 49 years.

© 2023 Florida Realtors®