Slow Market Not Scaring Agents
While some practitioners see business challenges as a result of fewer home sales, others see opportunity. View highlights from NAR’s newly released 2024 Member Profile.
CHIGAGO – Although existing-home sales last year plunged to their lowest level since 1995, real estate professionals remained committed to their business. Seventy-three percent of Realtors® say they’re “very certain” they’ll remain in real estate for at least two more years, according to the National Association of Realtors®’ “2024 Member Profile.”
Home buyers and sellers need real estate pros even more when navigating a tumultuous housing market, according to survey respondents, who cite limited housing inventory and affordability as the biggest barriers to homeownership.
The decline in sales volume in 2023 meant the typical NAR member saw fewer transactions: 10 transaction sides, down from 12 in 2022. The typical sales volume fell to $2.5 million from $3.4 million in 2022, according to NAR’s report, which is based on survey responses from more than 6,000 members.
“2023 was a difficult year for Realtors® due to high mortgage rates and low housing inventory, which significantly impacted home sales volume,” says Jessica Lautz, NAR deputy chief economist and vice president of research. “Realtors faced competition at all angles, not only to represent clients but also to ensure their buyers’ offers were accepted amid tough real estate market conditions.”
Still, many real estate pros stayed in the business. “While Realtor membership remained nearly flat, where some looked at the housing market as a challenge, others saw an opportunity,” the NAR report notes. Many real estate professionals explored adding specialties and niches, volunteered in their communities to expand their outreach and continued to leverage technology to educate clients about the realities of the housing market.
Agents’ resilience could soon payoff: NAR is forecasting existing-home sales to increase by the end of 2024 and post an uptick in 2025. “In the second half of 2024, look for moderately lower mortgage rates, higher home sales and stabilizing home prices,” NAR Chief Economist Lawrence Yun says of NAR’s latest housing forecast.
Here are some additional highlights from the “2024 Member Profile” report.
Experience pays off
Real estate pros with 16 years of experience or more tended to earn the highest incomes, with a median gross income of $92,500. Sixty-two percent of agents with two years or less of experience earned less than $10,000 in 2023 while 46% of members with more than 16 years of experience earned more than $100,000. Overall, the median gross income of NAR members in 2023 was $55,800, down slightly from $56,400 in 2022. Some members were compensated under different payment structures, such as fixed or capped commission splits.
Heavy reliance on tech
Real estate pros are prolific users of technology to better their clients’ transactions and ease business operations. Practitioners are embracing new technologies, such as apps for personal safety, design platforms and drones, as well as 3D and virtual touring and staging technology. Pros spent a median of $670 on technology products and services in 2023. They remain heavy users of social media apps for keeping in touch with clients, mostly using Facebook, LinkedIn and Instagram. The majority of real estate pros maintain their own website, which they use mostly to post information about the buying and selling process to connect with consumers.
Referral generators
Keeping in touch with past clients remains an important part of maintaining customer pipelines. The typical Realtor earned 20% of their business from repeat clients and 21% through referrals from past clients.
Independent-minded
Eighty-eight percent of Realtors are independent contractors and are most likely to be affiliated with an independent real estate company. “Regardless of market conditions, agents who are Realtors sought a career where they could be their own boss as an independent contractor, specialize in residential or commercial brokerage and embrace new technologies to make transactions happen,” Lautz says. Real estate pros frequently entered the business following careers in other fields; the most common prior jobs involved sales and retail, management, business and financial professions.
Business diversification
Real estate pros cited relocation, residential property management and commercial brokerage as the most common secondary specialty areas. Overall, 65% of Realtors are licensed sales agents, 22% held broker licenses and 17% held broker-associate licenses.
© 2024 National Association of Realtors® (NAR)