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Highlights from NAR’s new member profile

by Peter Thomas Ricci

real-estate-agents-couple-showing-homes

Sixteen percent of agents have at least one personal assistant. The median age of new Realtors is 43 years old. And 83 percent are very certain they will remain active as real estate professionals for another two years.

Those are just a small sampling of the statistics in the 2016 Member Profile, NAR’s latest analysis of its one million-plus membership. Awash in detail, the profile includes detailed information about the demographics, business practices and affiliations of the real estate community, and below, we have spotlighted the seven key trends uncovered in the report:

1. Youth Without Youth – For years, industry analysts have worried that real estate agents are an old, antiquated bunch, but as NAR’s Member Profile made clear, that trend may finally be changing. As of early 2016, the median age for a Realtor is 53, down from 57 in 2015. Furthermore, while the share of Realtors in older age brackets has declined, the share of younger Realtors has risen considerably – even doubled.

Our chart below breaks down the shifting age groups:

Realtor Age 2014 2015 2016
Under 30 3% 2% 5%
30-34 4% 4% 6%
35-39 5% 5% 8%
40-44 7% 7% 10%
45-49 10% 10% 12%
50-54 16% 15% 15%
55-59 16% 16% 15%
60-64 16% 16% 14%
65-plus 24% 25% 16%

2. A Woman’s World – A whopping 62 percent of Realtors were female in 2015, up from 58 percent in 2014. Younger Realtors are more equally split, with 41 percent of those 39 and younger being men,  but among the 40 to 49 and 50 to 59 age groups, 66 and 67 percent are women, respectively.

There is one area, however, where men dominate – the broker-owner position. Among non-selling broker owners, 68 percent are men, while among selling broker owners, 57 percent are men.

3. Career Crossover – Only 4 percent of Realtors consider real estate their first career, while all others entered the industry from other fields. The two most prominent prior careers were management/business/financial and sales/retail, both of which accounted for 16 percent of Realtors. Nine percent of Realtors came from the office/administration field, and 6 percent came from healthcare.

4. Inventory, Mortgage Concerns Persist – The two biggest inhibitors to clients completing their transactions were difficulty in finding the right property (cited by 38 percent of Realtors) and difficulty in obtaining mortgage financing (cited by 19 percent). Given that housing inventories remain low across the country and lending remains strict by historic standards, such a finding is consistent with past Member Profiles.

5. Unequal Success – Although home prices are rising nationwide, the Member Profile found that Realtor incomes declined from 2014 to 2015, possibly because of the influx of younger, lower-earning agents. Last year, the median gross income for Realtors was $39,200, down 14.41 percent from $45,800 in 2014. Granted, business was very good for a select group of agents – the share earning $250,000 or more nearly doubled from 5 percent to 9 percent.

Here is chart detailing Realtor income in 2015:

Gross Income Share of Realtors in 2014 Share of Realtors in 2015
Less than $10,000 19% 26%
$10,000 to $24,999 14% 13%
$25,000 to $34,999 9% 8%
$35,000 to $49,999 11% 9%
$50,000 to $74,999 13% 12%
$75,000 to $99,999 10% 9%
$100,000 to $149,999 10% 9%
$150,000 to $199,999 5% 5%
$200,000 to $249,999 3% 3%
$250,000 or more 5% 9%

6. Compensation Structures in Place – The percentage-commission split remained the prevailing compensation method for Realtors, with 70 percent citing that model (up from 69 percent in 2015); meanwhile, the 100-percent commission model declined in prevalence, falling from 17 percent to 15 percent. Interestingly, 100-percent commission was considerably more popular with veteran agents. Among agents with 16 years or more in experience, 21 percent opted for that model, compared to 8 percent of rookie agents.

7. Movin’ Out – For all Realtors, the median tenure at their present firm is just three years, down from five years in the 2015 Member Profile. Thirty-four percent of Realtors have been with their current brokerage for one year or less, compared with 25 percent who have been there for six to 11 years; 12 percent of Realtors have stuck with their brokerage for 12-plus years, down from 21 percent a year ago.

Our chart below breaks things down further:

Tenure Share of Realtors in 2015 Share of Realtors in 2016
1 year or less 30% 34%
2 years 8% 12%
3 years 5% 8%
4 years 6% 6%
5 years 5% 4%
6 to 11 years 25% 25%
12 years or more 21% 12%

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