NAR survey: Realtors were 12% busier in 2016
WASHINGTON – May 11, 2017 – After a slip in business in 2015, the National Association of Realtors® Member Profile for 2016 found that the income and sales volume of Realtor® members increased: Median gross income increased 8 percent in 2016, and the typical member had the highest number of transactions in recent years.
Realtors continue to cite inventory shortages, but transactions grew to 12 per agent last year – the highest since 2014 when the typical agent had 11. The median sales volume for Realtors grew from $1.8 million in 2015 to $1.9 million in 2016; median income increased from $39,200 in 2015 to $42,500 in 2016; and the median gross income of Realtor households also increased from $98,300 in 2015 to $111,400 last year.
The Member Profile represents the nation’s 1.2 million Realtors, which account for more than half of the approximately 2.2 million active real estate licensees in the U.S. Compared to licensees, Realtors go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice and committing to continuing education.
Business activity for Realtors grew last year because of higher demand, even amid a rise in membership, says Lawrence Yun, NAR chief economist.
“The return of pre-recession market levels and rising home sales and prices have led to increased business activity among Realtors and an increase in Realtor membership,” Yun says. “It is a highly entrepreneurial business, with some members earning six-figure incomes while others were barely scratching out less than $10,000.”
Realtor income and expenses
The latest survey found that 24 percent of members make under $10,000, and 24 percent make above $100,000. Median gross income and the number of transactions generally increase with experience: Last year, Realtors in business for more than 16 years earned a median income of $78,850 (up from $73,400 in 2015) and had 15 transactions, the same number as 2015. Realtors® with two years or less experience had a median gross income of $8,930, an increase from $7,400 in 2015, and had four transactions.
Income also varied by license type. Members licensed as brokers earned $69,640 in 2016, while the median earnings for sales agents was $31,670.
The number of Realtor members grew from 1.16 million in March 2016 to 1.22 million in March 2017, though the typical member has 10 years of real estate experience – unchanged from a year ago.
- 28 percent of members have less than two years of experience, an increase from 17 percent in 2015
- Members with less than one year of experience made up 20 percent of membership, an almost 10-percentage point increase from 2015
- Broker-owners, managers and appraisers had the most experience, while sales agents were typically the newest to the field with six years of experience.
“It has become evident over the last few years that individuals are realizing the many benefits and business opportunities that working in real estate provides,” says NAR President William E. Brown.
Despite more younger members joining the association last year, the median age of Realtors remained at 53 again last year – the lowest median age was 52 years in 2008. “The leveling in age may be attributed both to older members retiring and to more new, younger entrants to the business,” Brown says.
This year, only 30 percent of members are over 60 years old, and four percent are less than 30 years old, which is consistent with last year. Twelve percent of members who have two years or less of experience are under 30 years of age.
The typical Realtor is a 53-year-old female who attended college and is a homeowner; women represent 63 percent of Realtors, accounting for 58 percent of brokers and 67 percent of sales agents.
Sixty-five percent of members are licensed as sales agents; 22 percent are brokers, and 15 percent are broker associates (some hold more than one license). Thirteen percent of members have one personal assistant; three percent have two or more personal assistants.
Why do some transactions fail to close? According to the survey, there are multiple factors that limit potential clients. The top reasons cited by Realtors: Difficulty finding the right property (36 percent), housing affordability (16 percent), and difficulty obtaining mortgage financing (14 percent).
“Limited inventory and rising prices were large factors affecting the real estate market across the country over the last year, so it is no surprise that these same market conditions were cited in the survey as having the largest impact on Realtors’ ability to help their client complete a transaction.” says Yun.
Repeat business and referrals continue to be important sources of income for Realtors, especially those with more experience. Realtors with 16 or more years of experience reported 61 percent of business was from repeat customers or referrals.
Office and firm affiliation
Over half of Realtors work for an independent company; 56 percent of those are licensed as brokers and broker associates, down four percent since 2015, and 48 percent are licensed as sales agents, also down four percent since 2015. Nearly nine in 10 members are independent contractors at their firms.
The 2017 National Association of Realtors Member Profile is based on a survey of 165,424 members, which generated 12,685 usable responses, representing an adjusted response rate of 7.7 percent. Information about compensation, earnings, sales volume and number of transactions is characteristics of calendar year 2016, while all other data are representative of member characteristics in early 2017.
© 2017 Florida Realtors