The year 2012 was a very good year for Realtors, with both business activity and incomes up for the second straight year, according to the latest member profile from the National Association of Realtors (NAR).
That’s after nine straight years of declines, and Realtor income, which increased 25 percent to $43,500, was at its highest level since the peak of the housing boom in 2006. Here in Chicago, agent income in 2012 was $96,266, according to our latest “Truth About Agents survey,” a 2 percent increase from 2011, but a 37 percent leap from 2010.
Paul Bishop, NAR’s vice president of research, said such income gains represent a marked change of pace for Realtors.
“To put that in perspective, the median Realtor income had fallen by 35 percent during the housing downturn, but with the help of sustained increases in both home sales and prices, it’s recovered to the highest level since 2006,” Bishop said.
Incomes and Specialties
As is the case with all of NAR’s reports, its 2012 Member Profile was chock-full of valuable information about Realtor business, including:
• Realtor income generally increases with experience and weekly hours worked; for instance, Realtors with 16 or more years in experience earned a median income of $57,300, while Realtors who worked 60-plus hours a week earned $85,700.
• Among Realtors on the transaction side, annual deals increased from 10 in 2011 to 12 in 2012, a 20 percent increase.
• Eight out of 10 Realtors focus on residential sales, and 73 percent
have secondary specialties, with 17 percent offering relocation services, 8 percent counseling and percent land development.
• Similarly, 39 percent hold at least one certification in specialized training; 23 percent have the most popular certificate of Short Sales and Foreclosures Resource, and 17 percent have e-Pro, the second most popular.
• Referrals remain a major source of business for Realtors, with repeat business accounting for 21 percent of all transactions in 2012; for more experienced Realtors, referrals made up 40 percent of business activity.
Gary Thomas, the current president of NAR, said the real estate industry has gone through some interesting changes in the last 11 years – when the all-time record of Realtor income was set – and the Realtor profession has changed with it.
“Realtors have some way to go to surpass the peak income recorded back in 2002,” he said. “Interestingly, the peak wasn’t during the bubble years because there were way too many people in the business. To help smooth out the peaks and valleys associated with residential sales, many Realtors are diversified into related services. As a result, changes in Realtor income don’t exactly parallel changes in home sales and prices.”
Demographics, Compensation and Politics
NAR’s profile also contained quite a bit of information on the characteristics of today’s Realtors, including:
• Realtors remain a predominantly older group, with the average age in 2012 being 57 years; only 2 percent of Realtors are under the age of 30, and only 4 percent are between 30 and 34.
• The typical Realtor has 13 years of experience and works 40 hours a week, and 57 percent of Realtors are women.
• Split commissions maintained their dominance, with 68 percent of Realtors being compensated through that method; 18 percent received the entire commission. Also, 83 percent of Realtors worked as independent contractors, and the vast majority received no fringe benefits for their work.
• And finally, Realtors remain a politically active bunch, with 94 percent of Realtors having participated in the last national election, and 86 percent in their last local election.
• Also, Realtors are very well-educated, with 50 percent holding at least a bachelor’s degree.
Business for Today’s Realtors
NAR’s report also featured unique insights into how Realtors run their businesses. Sixty-four percent of Realtors, for instance, have their own personal website; 56 percent use social networking sites; and most interestingly, 92 percent prefer to use email to communicate with clients and customers – that’s a greater percentage than those who prefer using the phone!
Also worth noting: 14 percent of Realtors have a personal assistant, and only 6 percent chose real estate as their very first career, with 19 percent leap-frogging from business careers, 15 percent from sales and retail careers and 7 percent from education.