The National Association of REALTORS® (NAR) just released its 2019 Profile of Real Estate Firms. Basically, this survey of 6,000 real estate executives and senior management people in both residential and commercial real estate registers the pulse of real estate professionals.
According to NAR CEO Bob Goldberg, “Real estate firms continue to look optimistically towards the future, with the majority of (industry professionals) expecting profits to increase in the next two years.”
Profitability expectations among residential practitioners look like this, according to NAR’s survey:
- 59% of REALTORS expect profitability to increase
- 29% expect profitability to stay the same
- 7% expect profitability to decrease
- 5% have not clarified their profitability expectations
According to John Smaby, NAR president, “ These trends are positive signs, particularly in our constantly evolving industry.”
The top concerns for real estate professionals?
- 46% residential agents/brokers said keeping up with technology.
- 48% residential agents/brokers said increased competition from nontraditional market players.
- 45% residential agents/brokers said they had concerns about affordability.
Firms with one office reported a median brokerage sales volume of $4.2M in 2018, down from $4.3M in 2016; firms with four or more offices reported a median brokerage sales volume of $$100M, down from $235M in 2016.
Firms with one office averaged 18 transaction sides in 2018, down from 20 sides in 2016. Firms with four or more offices averaged 487 transaction sides in 2018, down from 550 transaction sides in 2016.
Where are REALTORS finding business? Past client referrals represented 30% of their business in 2018 and 30% from repeat business.
Additional highlights from the NAR 2019 Profile of Real Estate Firms survey included:
- 81% of firms had one office with two full-time real estate licensees.
- 86% of firms were independent, non-franchised companies
- 11% of firms were independent franchised companies
- 82% of all firms surveyed were residential brokerages
- all surveyed firms have been operating for an average of 14 years
- 57% of one office firms expect profitability to increase
- 63% of firms with four or more offices expect profitability to increase.