Realtors’ median gross income plunged 14 percent in 2008, to $36,700, forcing many less experienced Realtors to leave the business, according to a survey of members by the National Association of Realtors.
NAR’s 2009 Member Profile showed the median age of Realtors rising from 52 to 54 and average years of experience increasing from eight to 10. Overall NAR membership fell 10.5 percent from December 2007 to December 2008, to 1.2 million, and dropped another 6.4 percent through April.
The survey revealed the extent to which experience is tied to earnings: Those with two or fewer years in the business had a median gross income of $8,600 before taxes and expenses, while those in the business at least 16 years had a median gross income of $53,900.
Median net income after taxes and expenses fell 14 percent, to $23,200, a decline NAR said was consistent with falling home prices and sales volume over the past year. Sales agents had the lowest median net income ($18,700), followed by associate brokers ($27,000), broker-owners ($31,700), appraisers ($39,600), and managers and broker-owners not engaged in sales ($44,400).
Most of the Realtors surveyed — 60 percent — were licensed as sales agents, while 24 percent had broker’s licenses, 16 percent were licensed as broker associates, and 3 percent as appraisers.
Experience levels varied widely among those groups. Brokers not involved in selling had a median 25 years of experience, while brokers involved in selling and appraisers had 20 years of experience each. Associate brokers and managers had a median of 15 years of experience, while sales agents typically had seven years of experience.
Although 73 percent of Realtors said they were "very certain" they would stay active in the business for the next two years, that’s down from 77 percent in 2008. Among those with five years of experience or less, only 69 percent were very certain they’d stay active as real estate professionals.
Roughly three-fourths of those surveyed said real estate was their only occupation, but less than half said real estate was their primary source of household income, suggesting many have spouses working in other occupations.
Realtors in business for 16 or more years reported 23 percent of their business came from referrals from past clients, compared with 16 percent for those with three to five years’ experience and 1 percent for those with two years or less.
Realtors said open houses were of limited use in originating business, with nine out of 10 Realtors getting less than 10 percent of their business that way. The survey showed 61 percent of Realtors got no business from open houses, while 28 percent said open houses generated less than 10 percent of their business. Only 2 percent of those surveyed said more than half their business originated with open houses.
Some 86 percent of licensed sales agents reported specializing in residential brokerage, up from 74 percent in 2005 but roughly in line with a decade ago, when 88 percent said they were residential specialists. Property management was a distant second as a primary specialty of licensed sales agents, with 4 percent identifying themselves as such. Only one out of 100 surveyed identified their primary specialty as either international, land and development, counseling or appraising.
But 22 percent of Realtors surveyed said they were engaged in relocation as a secondary business specialty, and 21 percent said commercial brokerage was a second line of work. Residential property management (17 percent), counseling (14 percent), and land development (14 percent) were other popular secondary business specialties. …CONTINUED
Brokerage specialists reported a median of seven transactions in 2008, compared with eight in 2007, and 40 percent of Realtors said they completed at least one transaction involving a property in foreclosure.
While 12 percent of brokerage specialists said they completed no transactions in 2008, the percentage was much higher for those with two years or less experience — 27 percent.
Those surveyed said the most important factor thwarting potential clients from completing a transaction included expectations that prices might fall further (35 percent), difficulty in obtaining financing (25 percent), low consumer confidence (19 percent), difficulty in finding the right property (6 percent) and concern about a job loss (6 percent).
More Realtors than ever — about four in 10 — are using smart phones with wireless e-mail and Internet capabilities on a daily or nearly daily basis, according to the National of Association of Realtors’ latest survey of members.
NAR’s 2009 Member Profile shows 42 percent of Realtors have adopted smart phones like the BlackBerry, Treo and iPhone, up from 34 percent in last year’s membership survey.
There was a reverse correlation between smart-phone adoption and experience in the real estate field, with the highest adoption rate (47 percent) among Realtors with two years or less experience, and the lowest adoption rate (36 percent) among Realtors with 16 years or more years of experience.
Smart phones have proven versatile tools for real estate professionals and consumers, not only because they allow access to e-mail and the Web on the go, but because developers are writing customized applications tailored for real estate (see story).
While smart phones are catching on, only 7 percent of Realtors said they had a blog — down from 8 percent last year. Realtors 30-39 were most likely to be bloggers (13 percent), and those 60 or older the least likely (4 percent).
A larger share of Realtors said they are involved in social networking (35 percent), although adoption varied considerably by age. While 71 percent of Realtors 29 or younger said they used social networking Web sites, adoption declines in each of the next four age brackets, bottoming out at 19 percent among those 60 and up.
Realtors were most likely to place listings on their own firm’s Web site (81 percent), followed by Realtor.com (80 percent), their local MLS Web site (66 percent), and their personal Web site (46 percent). The percentage placing listings on local newspaper Web sites fell from 29 percent in 2008 to 27 percent in the latest survey. But 16 percent said they are placing listings on other brokers’ Web sites, up from 14 percent a year ago.
A total of 8,113 Realtors filled out the 91-question survey, which was mailed to a random sample of 54,140 NAR members in February and distributed online to another group of 46,561 members. Information about compensation, earnings, sales volume and number of transactions are for 2008, while all other data represent member characteristics in early 2009.
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