Why Aren’t You Earning More?
August 14, 2018
Unemployment is low and the economy is growing—at a clip of more than 4 percent in the last quarter—but home sales are going down for many real estate professionals. The typical agent in the last year worked on 11 transaction sides, down from 12 sides the previous year.
What’s happening? For starters, the inventory crunch is holding markets back. Particularly in the lower price points, there just aren’t many homes for sale. But there are also more agents, at least among those who are REALTORS®. The membership of the National Association of REALTORS® grew to 1.3 million last year from 1.22 million the previous year. That means more agents are competing for a pie that’s not growing. About a third of NAR members have two or fewer years of experience.
However, there are plenty of positives. For one, the value of home sales is rising, so with each sale, agents stand to make a bit more. NAR estimates that price appreciation is about 5 percent a year nationally. NAR’s Chief Economist Lawrence Yun would like to see prices ease so they’re more in line with wage increases—around 3 percent. But as long as demand exceeds supply, price pressure will be upward.
Another positive is that there’s an increase in younger people coming into real estate, despite the median age of professionals inching up from 54 to 55 last year. And that’s good for the future of real estate. These and other industry trends are looked at in the latest Voice for Real Estate news video from NAR.
—Robert Freedman, REALTOR® Magazine
Updated: November 19, 2018