Real Estate Firms Expect Rising Profitability

Washington, DC, Sept. 12, 2013 -- Most real estate firms are small, independent businesses that specialize in residential brokerage, with 69% of all firms expecting profitability to increase over the next year, according to the 2013 National Association of Realtors Profile of Real Estate Firms.

Paul Bishop, NAR vice president of research, said the industry sees greater competition in tandem with the housing market recovery.

“Two out of three real estate firms expect competition in the marketplace to increase, both among firms and nontraditional market participants,” he said.

“Because real estate is an entrepreneurial field, some experimentation in business models is likely when the market is in a recovery phase.”

Eighty-four percent of real estate firms are independent, non-franchised companies, while 13% are independent franchises; the rest are subsidiaries of a national or regional corporation. Independent firms generally have fewer agents and lower sales volumes.

Eight out of 10 firms specialize in residential brokerage, with commercial brokerage and residential property management the most common secondary functions, each offered by nearly four in 10 residential brokerages.

Other primary business specialties at real estate firms include residential property management, 6%; and commercial brokerage and residential appraisal, 5% each.  Smaller shares of real estate firms focus on land development, commercial property management, commercial appraisal, relocation, counseling, international and auction.

The typical real estate firm has been in business for 13 years; 80% of firms operate out of a single office and have a median of two licensees.  Only 8% of firms have four or more offices, but have a median of 100 licensees.  Larger firms were more likely to have increased staffing; firms with four or more offices added a median of 10 licensees during 2012.

NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, California, said a sizeable number of firms are expanding.

“Although conditions vary around the country, 45% of real estate firms are actively recruiting agents, largely due to growth in their primary business,” he said.

“As for challenges over the next two years, six in 10 firms cite profitability, 44% identified local or regional economic conditions, and 42% are concerned about both maintaining sufficient inventory and keeping up with technology.”

The typical residential real estate firm handled a median of 25 transaction sides in 2012, representing a dollar volume of $4.4 million.  Ten percent of a firm’s median sales volume was generated by a website, but less than 1% came from social media; however, firms with three or more offices obtained 5% of their business through social media.  The vast majority of sales were from prior relationships with clients and from referrals.



Other Archived Articles

Initial Jobless Claims Beat Expectations   Full Article
Washington, DC, July 10, 2014 -- Initial claims for unemployment benefits fell 3.5% to 304,000 for the week ending July 5, according to the Labor Department.

McGrane Named Executive VP at Max Windsor   Full Article
Adairsville, GA, July 10, 2014 -- Joshua McGrane ?has been named executive vice president? of ?Max Windsor USA.

Tile of Spain Seeking Design Contest Entries   Full Article
Madrid, Spain, July 10, 2014 -- The 13th Tile of Spain Awards of Architecture and Interior Design is seeking entries.

Lumber Liquidators Lowers Forecast, Stock Plunges   Full Article
New York, NY, July 10, 2014 -- Shares of Lumber Liquidators fell as much as 15% in after-hours trading on Wednesday after the company lowered guidance for the full year 2014.

Soniclean Partners With Shaw on Soft Carpet Vacuum   Full Article
New York, NY, July 10, 2014 -- Soniclean said it has partnered with Shaw Industries to address the growing demand for a vacuum cleaner capable of cleaning soft style carpeting.

Teragren Names Vice President of Sales   Full Article
Bainbridge Island, WA, July 10, 2014 -- Teragren has named Mark Jordan vice president of sales.

Dixie Group Added to Russell Stock Indexes   Full Article
Chattanooga, TN, July 10, 2014 -- The Dixie Group said it was added to the Russell 3000 Index and Russell 2000 Index when Russell Investments reconstituted its comprehensive set of U.S. and global equity indexes on June 27.

Congoleum Closing New Jersey Warehouse   Full Article
Hamilton Township, NJ, July 10, 2014 -- The Congoleum flooring warehouse here will cease operations later this year.

CRI Posts Model Specification for Commercial Carpet   Full Article
Dalton, GA, July 9, 2014 -- The Carpet and Rug Institute said its Model Specification for Commercial Carpet is now available online at Carpet-Rug.org.

Bamboo Hardwoods Names Flooring Sales Director   Full Article
Seattle, WA, July 9, 2014 -- Bamboo Hardwoods has named Bruce Boulden as the company’s national flooring sales director.

Mortgage Application Volume Increases Last Week   Full Article
Washington, DC, July 9, 2014 -- Mortgage application volume rose last week, according to the Mortgage Bankers Association.

Ardex Academy Sets Training Dates   Full Article
Aliquippa, PA, July 9, 2014 -- Ardex Academy offers free classroom and hands-on product installation training at eight locations throughout North America. Participants learn substrate preparation and the newest installation techniques.

Judge Ends Laminate Copyright Dispute between Home Legend and Mannington   Full Article
Rome, GA July 3, 2014 -- A U.S. District Court in Rome, Georgia ruled in favor of Home Legend in a legal dispute over similar looking laminate floorcovering. The judge ruled nature can't be copyrighted.

Job Openings at Highest Level Since 2007   Full Article
Washington, DC, July 8, 2014 -- Job openings in the U.S. rose in April to the highest level since September 2007, according to the Labor Department.

CARE Seeking Proposals for PET Market Project   Full Article
Dalton, GA, July 8, 2014 -- Carpet America Recovery Effort is seeking proposals for a 12-18 month project to demonstrate value-added uses for polyethylene terephthalate (PET) derived from post-consumer PET carpets.

Quick-Step Hosts Event for Shelter Charity   Full Article
Dallas, TX, July 8, 2014 -- Laminate maker Quick-Step recently co-hosted an event to benefit the local charity Dwell With Dignity.

Prince of Wales Hosts Wool Campaign Event   Full Article
London, England, July 8, 2014 -- To commemorate the fifth anniversary of the Campaign for Wool, the campaign's Patron His Royal Highness The Prince of Wales hosted a major celebration of wool at Clarence House.

Curacao Firm Develops New Locking System   Full Article
Willemstad, Curacao, July 7, 2014 -- Innovations4Flooring, a technology company formed last year to supply flooring installation products, said it has developed a unique locking system for flooring.

UK Carpet Recycling Presents Awards   Full Article
Birmingham, England, July 7, 2014 -- Inspiration for manufacturers to design new carpet products for recycling or reuse at end of life was a key theme at Carpet Recycling UK’s sixth Annual Conference.

Estillon Wins Export Award in Netherlands   Full Article
Uden, The Netherlands, July 7, 2014 -- Estillon, a provider of subfloors, carpet underlays and accessories, took third prize for the Fenedex Frank Hauwert Trophy.