The average Realtor
What does the face of the real estate industry look like? According to the National Association of Realtors (NAR), “the typical Realtor is a 56 year old white female who attended college and is a homeowner.”
The 2011 NAR Member Guide shows very similar statistics regarding membership as it has in recent years with a caucasian 50+ woman being the poster child of the NAR membership. What perplexes many, however, is that if the face of real estate is female, why isn’t the executive suite at big box brokerages female?
Gross gross income
Consumers have this image of Realtors as the Cadillac driving millionaires who wear Prada and yell at servants because of television portrayals of the industry, but the truth is that Realtors don’t make much money at all. Although the median gross income of Realtor households is $91,700 and up from the year before, the median gross income of the Realtor alone was only $34,100 which has slid 4.5% from 2009.
No, that isn’t Prada money, that’s just over $17 an hour if an agent works 40 hours each week (although we know many many agents work closer to 60, putting it at roughly $12 an hour… can you say gas station attendant salary?).
The average Realtor has 12 years of experience and while average annual gross income is reflected by experience and years in the business and Realtors with over 16 years of experience brought home $47,100, those in the business for less than two years earned a median gross income of $8,900. That’s eight thousand nine hundred dollars… a year. If an agent works 40 hours per week at that rate, they earn roughly $4 per hour, well under minimum salary.
The dreamers of the past who saw opportunity in real estate should know these numbers and know that the industry is more hard work and less shopping for Prada than they might think. If NAR membership drops in the next three years, it is more likely that potential members will take less risk in a down market than the $40 annual increase in dues.
80% of NAR members specialize in residential real estate and 21% are certified in short sales and foreclosures. Although those certified in short sales and foreclosures is up from 12% in 2009, that leaves 79% of agents that have not sought certification. This stat is of note because it is highly unlikely that only 21% of Realtors are handling 100% of all short sales and foreclosures. There is a major disconnect between the number of Realtors certified to handle these complex transactions and those that actually do handle them.
Real estate is the sole occupation for 75% of NAR members leaving 25% of all dues paying Realtors as hobbyists, part timers, or people with full time jobs that hold membership in the event an extra pay check is dangled in front of them. Industry insiders have mixed feelings about part time agents versus full time agents with critics arguing that full time agency is the only fair way to oversee a transaction while supporters note that many NAR members hold a license as a housewife or even as an investor handling nothing more than their own transactions.
The future of the industry
We acknowledge that the economy is bad, housing is still in a crisis and Realtor income will likely shrink even more as home prices continue to slide. 75% of Realtors are certain they will be in the real estate business in two years. Although this appears to be an optimistic outlook, when we polled our story sources, nearly 100% believed they would be practicing real estate in the future.
Despite shrinking income, a horrific economy, a disconnect between certification and practice, as well as a disparity between the female dominated practitioners and a male dominated leadership suite, the bottom line is that Realtors are confident that they will still be in business in two years.