Meg White is the former managing editor of REALTOR® Magazine.
The latest Member Profile from the National Association of REALTORS® offers an upbeat snapshot about the practice of real estate today. Business activity was up for the second year in a row in 2012, and REALTOR® income rose nearly 25 percent over 2011. Following almost a decade of decline, the news that median gross income rose to $43,500 in 2012 from $34,900 in 2011 was certainly welcome.
Of course, income is affected by various criteria. Brokers typically earned $54,900 in 2012, while the median for sales agents was $34,000. Income predictably rises with the amount of time members have invested; those in business for 16 years or more earned $57,300 in 2012, while Realtors® with two years’ experience or less had a median gross income of only $9,700. Similarly, those who put in 60 hours a week or more earned $85,700, compared to the $25,200 earned by those who worked between 20 and 39 hours per week.
NAR’s 2013 Member Profile was based on a survey of 58,068 members. Responses were weighted to be representative of state-level NAR membership. Income and transaction data are for 2012, while other data represent member characteristics in early 2013. Learn more and order the report here.
Any seasoned pro can tell you that the real data disconnect appears when comparing today’s income with that of the income earned at the height of the market. Back in 2005, REALTORS® were doing the same number of transactions that they did last year (12, on average), but in 2012, individual sales were just 68 percent of what they were seven years earlier ($1.5 million, compared to $2.2 million in 2005).
“They’re working twice as hard now for the same amount of money,” says Jessica Lautz, manager of NAR’s Member and Consumer Survey Research division. She notes that 2012 transactions included an average of two distressed sales per agent, while in 2005 that same information was perceived as statistically insignificant —“so immeasurable that we didn’t even survey it.” More distressed sales means today’s transactions require much more time and effort than before, Lautz says.
Maria S. Wells, ABR, SFR, broker-owner of Lifestyle Realty Group in Stuart, Fla., sees that dynamic in her local market. “I travel throughout our state and the sentiment is echoed everywhere: All REALTORS® are busy and appreciative that business is back,” Wells says. “A caveat to the surge in sales is the challenge to get them closed; very few of the transactions are easy. They require skill, competence, and patience.”
But REALTORS® are an adaptive sort. In addition to their high level of interest in the short sales and foreclosure markets, 73 percent of members reported having a diversified business portfolio in 2012 which they achieved by adopting secondary real estate specialties.
Property management as a secondary specialty saw an unprecedented jump in activity. The typical property management specialist managed 49 properties in 2012—a significant rise from last year’s average of 30 and the highest number on record for the survey. In terms of specialties across the board, it ranked second behind residential brokerage.
“[We] looked back into the 1970s reports to confirm, and we actually couldn’t find anything comparable,” Lautz says of the increase. “There’s a record number of properties and a record number of renters. Our members are taking advantage of that by entering this specialty.”
Members may be diversifying within real estate, but they are also increasingly dedicated to the industry as a whole. Four out of every five REALTORS® say they are “very certain” they will remain a real estate professional during the next two years, which is up four percent from only one year ago. “That shows a level of confidence, that they’re optimistic about moving forward,” Lautz said.
Yet, that willingness to stay on might be skewing the numbers when it comes to age. Though the percentage of practitioners under the age of 40 has remained fairly consistent over the past three years, the larger trend of an aging population of REALTORS® has continued. The percentage of REALTORS® under 30 has decreased from 4 percent in 1999 to 2 percent this year. And in the oldest bracket (65 and up), the percentage of practitioners has increased from 13 percent to 25 percent during that same time period. That translates to a median age that’s increased one full year since the last report, standing currently at 57.
NAR officials say the association is committed to supporting professional development and programs specifically targeting younger real estate professionals.
“The drop in REALTORS® under the age of 30 stresses the importance of programs such as REALTOR® Magazine’s 30 Under 30 and the Young Professionals Network,” says Pamela Geurds Kabati, NAR’s senior vice president of communications. “Both programs look to identify future leaders whose voices need to be heard when it comes to new issues facing the real estate industry. Now is a great opportunity for this group to get involved with their local, state, and national associations.”