I won’t exactly come across as a visionary if I point out the real estate has been in the slumps for the past few years. By the way, just in case you missed it, water is wet. Now that I’m done stating the obvious, it’s time to start digging through some of the recent numbers that the National Association of Realtors (NAR) has been kicking out regarding the future of our industry. What they mean to the industry is sometimes not that obvious.
Let me start by pointing out that recent NAR missives are pointing at an increase in residential and commercial property sales. While this is certainly good news, it’s also that time of the year. While we can all certainly hope that this continues to trend upward, at present it looks like it’s going to do so slowly and considering the glut of inventory currently in market it could be a while before we start hearing any good numbers about new housing starts. That said, getting better is better than getting worse. Unfortunately, what these trends mean for real estate professionals who are currently in the trenches is uncertain.
Part of the good news is that the competition among Realtors who buy and sell houses has improved greatly due to a sharp decline in the number of licensed Realtors talking them on. According to various numbers released by the NAR and others, in 2006 there are approximately 1.4 million NAR members. I have also seen estimates as high as 2.6 million licensed realtors for that period of time. Today, again according to the NAR, that number is under 1 million.
According to the 2011 NAR member profile poll, while things are looking up a bit, Realtors really are working harder and making less. In fact, the median income of an average realtor dropped 4.5% last year to $34,100. This was preceded by a 3% decline in 2009. Those members who list themselves as broker/Realtors earned a median salary of $48,700 while sales agents earned an average of $24,900 in 2010. Even more disproportionate is that NAR members who’ve been in the business for two years or less earned a median income of $8,900 while those who’ve been in the business for 16 years or more earned $47,100. While good news for those agents who stick it out year after year, this raises a red flag not only for the challenges that new broker/Realtor’s face in entering this market but also is going to create a generational gap between home buyers and the professional Realtors there to help them.
For example, the 2011 member profile survey shows that the typical NAR member broker/Realtor is 56 years old. Only 3% of all Realtors are under the age of 30. While age may not be a huge factor in successful home selling, when you take into consideration that many home buyers are young people who are purchasing their first home, it’s quite possible that they will respond differently to agents closer to their age who have a good handle on alternative forms of finding and marketing homes through blogs, social media tools, specialized websites etc. Again, according to the member survey, only 10% of all Realtors claim to have a blog. Of those, 18% are between the ages of 30 and 39 while 16% are younger than 29. Likewise, 83% of agents under age 29 claim to use social media tools to help find and assists their clients compared to just 52% of agents between the ages of 50 and 59.
My intention is not to be ageist, but to point out that as markets change the need for members to be flexible needs to change as well. The bottom line is that if your clients are going to use certain approaches to find a new home or to sell their existing ones, agents need to be aware of these tools and methodologies in order to meet those clients in the right place.
As people much wiser than me have pointed out “this too shall pass”. Where we are today is not we’re going to be in the future. The good news is that we’ve hit the bottom and were looking up. The bad news is that it’s still a tough slog and for many people it’s a hard way to make a living. That said, the passion that most agents have for the work they do has less to do with their paychecks and more to do with the services they provide their clients and the challenges that keep them fresh and viable the marketplace. By staying flexible, keeping a positive outlook and looking for ways to create opportunities, we can continue to rebuild this industry and make it a positive experience for everybody.