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Real Estate Big Data

NAR releases study on sources of Realtor incomes

(REAL ESTATE NEWS) Many REALTORS® rely on more than home sales for their income. The NAR has just released a study investigating these alternative sources.

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Diversity of Realtor incomes

For many real estate agents, selling homes just isn’t enough income. The NAR® recently released a study based on the 2017 Member Profile report, detailing the alternative sources of REALTORS®. The report looks at the median income for randomly selected NAR® members, as well as the sources of their income.

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The 2017 Member Profile report was based on a random sampling for the NAR’s membership and asked a variety of questions based on demographics, economics, and business practices.

All the questions proposed aim to answer the question “who are REALTORS®?”

The report found that the median income for all agents in 2016 was $42,500 and the net income (after taxes and expenses) was $26,820. For members with less than two years of experience, the median gross income was $8,930 and the net income was $7,690. Conversely, those members with upwards of 16 years experience, their median gross income was $78,850 and their net was $46,790.

Of the specified income for the surveyed agents, income was predominately earned from selling homes. Approximately 46 percent of agents received 100 percent of their income from their real estate specialty, and another 33 percent received between 50 and 99 percent of their income from real estate. Of the members surveyed, approximately 70 percent stated their main specialty was residential brokerage. 70 percent also stated they were sales agents.

Supplemental Realtor incomes

Agents were also asked about their commission sales and 35 percent stated they received a fixed commission split. 26 percent received a graduated commission split (which increases with production), and 14 percent received a capped commission split (which rises to 100% after a predetermined threshold). Numerous agents also detailed where their supplemental income derives.

Approximately 16 percent of the agents surveyed offer home relocation services; 14 percent offer property management services; and 12 percent offer commercial brokerage service to supplement their incomes. In short, of the surveyed members “half obtain their income entirely from their primary real estate specialty, where two-thirds specialize in residential real estate and two-thirds are sales agents,” according to the NAR®.

The customers who contribute to income

The NAR’s® report also detailed the types of customers that contributed to REALTORS’® income. 13 percent of REALTORS® business came from repeat customers; for agents with more than 16 years experience this number more than doubles to 36 percent.

“Typical” REALTORS® also reported that 18 percent of their business was from referrals of past clients; for those with over 16 years experience reporting 25 percent of their business being from previous client referrals.

While some REALTORS® main source of income may be sales, other have turned to other specialties to supplement their income. Since this was random sampling of REALTORS®, it would be interesting to see how (or if) the statistics changed if all REALTORS® were surveyed. What do you think about the report? Do any of the figures in the NAR’s® report surprise you?

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Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.

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Real Estate Big Data

Home values are on the rise – What will homes be worth in 2023?

(BIG DATA) The housing market is on fire. Will we continue to see home values increasing over the next 2 years? This prediction poll has the answers.

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Houses representing increasing home values.

Ask 12 experts in real estate about the future of home values and you’ll probably get 20 or more different opinions. With mortgage rates rising, the housing market is expected to slow down, but that doesn’t mean that home values are going to decline. Here’s one prediction from GOBankingRates about home values in 2023.

Predictions for Home Values

GOBankingRates used the median home value rate to predict what home valuations will do over the next year. The median home value is the property’s actual valuation, not the list price or home price. It’s interesting to note that there were no predictions in which home values would decline. In most states, home values should increase by 10% or more. Only three states, Louisiana, North Dakota, and Alaska, had predictions of less than 10%. Some states, Utah, Florida, and Arizona had a prediction of over 20% gain.
Here are some of the predictions:

  • Texas – the median home value in 2022 is $290,527. The projected home growth is 15.29%.
  • West Virginia, the state with the lowest median home value of $129,518 has a projected one-year growth rate of 10.39%.
  • Tennessee – with a median home value of $276,250 in 2022, the projected growth rate is 18.19%.
  • Florida – the 2022 median home value is $373,735. By 2023, the projected home value change is 22.04%.
  • Hawaii – the state with the highest median home value of $972,147 has a projected growth rate of 16.65%.

This information is valuable for both homeowners and home buyers. Read the report and find your state here.

The real estate market is promising

Although there were concerns that the pandemic would cause a housing crash, what we’re seeing is much different. It’s not even the housing bubble of 2008. Housing prices are rising because of a lack of supply and increased demand. There’s less likelihood of foreclosure today than 15 years ago, due to more stringent requirements. The housing market looks good, not just into next year, but hopefully over the next decade and more.

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Real Estate Big Data

Median home prices hit $407K, home sales fall 3.4%

(REAL ESTATE NEWS) Home sales dip for a fourth consecutive month in May – what does this mean for the housing market going forward?

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For the fourth consecutive month, existing home sales (real estate contracts signed) fell 3.4% in May from April, and slumped 8.6% from a year ago, according to the National Association of Realtors (NAR). The average days on market fell from 17 days in April (and May 2021) to 16 days in May, and 81% of all homes listed sold in under a month.

The median home price rose 14.8% over the last year to $407,6000, the first time it has ever exceeded $400K. May marks the 123rd consecutive month of annual increases, the longest-running streak in history.

Inventory remains tight, but did rise 12.6% from April to 1.16 million by the end of May, marking a 2.6 month sales pace. Inventory is down 4.1% from May of 2021.

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist, Dr. Lawrence Yun.

“Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions,” Dr. Yun added.

He notes that it is expected that home sales in coming months will continue to decline in light of rising mortgage rates, yet appropriately priced homes will continue to sell quickly.

First time buyers made up 27% of sales in May, down from 28% in April. This diminishing number remains troubling, as the average hovered around 33% for years, and was at 31% in May 2021.

All-cash sales rising to 25% (up from 23% in May 2021), and individual investors or second-home buyers accounted for 16% of sales in May.

“Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties – placing additional financial strain on prospective first-time homebuyers,” said NAR President Leslie Rouda Smith.

“To counter this trend,” Rouda notes, “policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers.”

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Real Estate Big Data

NAR Chief Economist predicts housing market uncertainty

(BIG DATA) Warning bells on the housing market have been ringing for over a year. While this prediction isn’t a surprise, it’s disappointing news.

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Multitude of colorful homes representing housing market.

The housing market is booming. Many experts are concerned about another bust like we experienced in 2008, but the conditions are much different today. Homeowners aren’t extended like they were when the market crashed in 2008. National Association of Realtors® Chief Economist Lawrence Yun suggests that the housing market is still uncertain, even though he says, “housing kept the economy afloat” during the pandemic.

What is impacting the housing market? 

Yun cites record-low inventory and inflation as “curveballs” to the housing market. Many economists, including Yun, have been concerned about low inventory for many years, especially in certain markets. Even though builders are working hard to construct new residences, supply chain and labor issues are not accelerating the process.

Yun is more concerned about inflation impacting the housing market. He says,

“wages have risen by 6% from one year ago…but inflation is 8.5%.”

Rising mortgage rates have made mortgages cost $300 to $400 a month more, according to Yun. Many working families can’t afford that. Yun predicts inflation is going to be high for several months. The market will slow as the Federal Reserve raises rates.

Yun also cites the Russia-Ukraine war as another contribution to the uncertainty of the market. The war is also driving inflation, not just overseas, but in the United States. With gas prices climbing higher each week, this is impacting the housing market.

Is real estate a good investment in this market?

Last year, when Yun opened the Residential Economic Issues & Trends Forum at NAR’s annual REALTOR® Conference & Expo in San Diego, he expected the “housing sector’s success to continue,” but he did suggest that 2022’s performance wouldn’t exceed 2021s.

“Rising rents will continue to place upward pressures on inflation,” he said. “Nevertheless, real estate is a great hedge against inflation.”

There’s a lot we don’t know about the future. It’s disappointing to think that the housing market may be uncertain, but real estate is still a good investment.

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