Realtors Cite Limited Housing Inventory as Key Challenge
Washington, DC, May 24, 2021-Realtors cited a lack of inventory as the leading reason limiting potential clients from completing a transaction, according to the National Association of Realtors' 2021 Member Profile, an annual report analyzing members' business activity and demographics from the prior year. However, in spite of a global pandemic, its drastic impacts on how business was conducted, and a dwindling housing supply, 2020 saw the highest number of homes sold since 2006 (5.64 million) and NAR's membership increased from the previous year (1.48 million at the end of 2020, up from 1.4 million at the end of 2019).
"Realtors continued to serve clients' needs despite the challenges 2020 brought to the real estate market," said Jessica Lautz, NAR vice president of demographics and behavioral insights. "Economic lockdowns and historically-low inventory coupled with surging home buying demand only showed the resilience of our members and industry."
Business Characteristics of Realtors
The majority of realtors-68%--hold sales agent licenses, which is up from 65% last year. Twenty percent hold broker licenses and 13% hold broker associate licenses. Seventy-three percent of members specialize in residential brokerage. Relocation, residential property management and commercial brokerage are members' most common secondary specialty areas.
Members typically have eight years of real estate experience, down from nine years in 2019. Eighteen percent of those surveyed have one year or less experience-nearly identical to 17% last year-while 15% of realtors have more than 25 years of experience, down from 17% a year ago. Appraisers, broker-owners, and managers had the most experience, while sales agents were typically the newest to the field with five years of experience. Consistent with recent surveys, nearly four out of five members--79%--were certain they'll remain in the real estate industry for at least two more years.
Business Activity of Realtors
The typical member had a slightly lower sales volume ($2.1 million vs. $2.3 million) and fewer transactions (ten versus 12) in 2020 compared to 2019.
The typical realtor earned 15% of their business from previous clients and customers, unchanged from last year. The most experienced members-those with 16 or more years of experience-reported a greater share of repeat business from clients or referrals (a median of 37%), compared to no repeat business for those with two years of experience or less. Overall, realtors earned a median of 19% of their business from referrals, a slight drop from 20% in 2019. Referrals were also more common among members with more experience, with a median of 27% for those with 16 or more years of experience compared to no referrals for those with two years of experience or less.
Income and Expenses of Realtors
The median gross income for realtors was $43,330 in 2020, down from $49,700 in 2019. Realtors with 16 years or more experience had a median gross income of $75,000, a decrease from $86,500 last year, as income was typically commensurate with experience. One out of four realtors earned $100,000 or more. Total median business expenses for members were $5,330 in 2020, a decline from $6,290 in 2019.