The Other Housing Recovery: Agents' Pay
More home sales and higher home prices are adding up to bigger incomes for local real estate agents. With approximately two million actively licensed agents in the United States, that is a welcome relief for a workforce that was decimated by the housing crash.
The median gross income of a realtor (a member of the National Association of Realtors) jumped 25 percent in 2012 from the previous year, according to a new NAR survey.
About half of all licensed agents are members of this industry group, which is meeting in Washington, DC this week for a semi-annual conference.
"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," says Paul Bishop, NAR's vice president of research.
The median gross income of a realtor in 2012 was $43,500, a far cry from the peak of $52,200 in 2002, but the biggest annual gain in over a decade.
"Interestingly, the peak wasn't during the bubble years, because there were way too many people in the business," notes NAR president Gary Thomas, a California-based Realtor.
The real estate business is unique, in that most come to the field after other careers, or as a side-business to other jobs. Just six percent of agents now report real estate as their first career.
No surprise then, that the typical age of a realtor is 57; just two percent of them are under 30 — which given the crash is not surprising. 25 percent of realtors are over aged 65.
"I have not seen new people being drawn to the business, but I am seeing agents change firms in pursuit of better split agreements," says Rick Ambrose, a real estate agent in Morristown, New Jersey. "Quite a few realtors have left the business or become 'referral agents,' so they could maintain their license while doing something else."
With incomes rising, many will likely return to the business. While online real estate sites are gaining traction by the moment, most buyers and sellers, around 89 percent according to the NAR, still use a real estate agent to navigate the process.
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