The National Association of Realtors (NAR) released its “2021 NAR Member Profile.”
In this member profile report, NAR seeks to take a current pulse on its active members. By surveying a random sample of its members, NAR tries to determine who Realtors really are and what their business looks like. This report provides a snapshot in time by examining various member traits, including demographic characteristics, business practices, and earnings. The goal is to develop an accurate and current description of the typical Realtor in 2021.
Based on that report, below is a brief synopsis of the findings that characterize today’s Realtor that focused on three broad categories: demographic characteristics, business, and earnings. In this highly unusual year, there is a note regarding the possible impact of the COVID-19 pandemic on the data and overall housing market in 2021.
This year marked an incredibly unique time for real estate. COVID-19 lockdowns in the Spring of 2020 led to a drop in home sales. The presence of nationwide changes to remote learning and work from home patterns, combined with a 3.1 percent 30-year fixed interest rate for mortgages, quickly led to an increase in buyer demand. Home sales reached 14-year highs, but inventory fell to near 40-year lows. These changes led to dramatic shifts in how Realtors utilize technology in their business practices.
In addition to market changes, 2020 saw changes in realtor demographics. A significant portion (64 percent) of Realtors stated that real estate was their only occupation both now and pre-COVID-19. However, 11 percent had another source of income prior to the pandemic but have since made real estate their sole occupation. Even during the pandemic, the profession continued to grow, evidenced by the NAR membership increase from 1.40 million in 2019 to 1.48 million at the end of 2020.
Generally, the typical Realtor was a 54-year-old white, college-educated female homeowner. Females make up a larger percentage of the Realtor pool – 65 percent, which is up 1 percent from last year. The largest portion of Realtors (49 percent) range in age from 40 to 59, and 54 is the median age. The second-largest cohort is the 60 or older group (33 percent), trailed by Realtors aged 39 or younger (18 percent). The typical Realtor reported eight years of experience, a decrease from nine in the prior year. This could be a positive indicator of more pros entering the field.
NAR members tend to hold an optimistic outlook for the future: 79 percent are very certain that they will remain an active real estate pro for the next two years. Independent contractors make up 88 percent of the pool and 53 percent are affiliated with an independent company. The typical Realtor is also more likely to be college-educated; 51 percent hold a bachelor’s degree or higher. For 46 percent of Realtors, =real estate was identified as a primary source of income for their household. Homeownership is also prevalent among Realtors; 82 percent own their primary residence and 37 percent own a secondary property.
Realtors are becoming more comfortable with using technology in communication modes and leveraging social media for expanding their business. The typical Realtor said they use a smartphone daily or nearly every day (96 percent) while most use social media apps daily for business (57 percent), and 95 percent indicated they use email daily or nearly every day. Additionally, the typical Realtor prefers to use text messaging to communicate with current clients (93 percent), followed by telephone (90 percent), and then email (89 percent).
Most Realtors have their own website (69 percent) that typically displays their own property listings (81 percent), information regarding the home buying/selling process (69 percent), and a link to the firm’s website (66 percent). Realtors typically reported having their website for five years.
But social media and website traffic only counts for a portion of clients and customers. The typical Realtor also gained a significant number of clients from repeat business (15 percent) and referrals from former clients and customers (19 percent).
As expected, earnings typically grow with experience and an expanded clientele base. The typical Realtor with 16 years or more experience reported a median gross income of $75,000 in 2020, which is a decrease from $86,500 in 2019. In contrast, the typical Realtor with two years or less experience reported a median gross income of $8,500 in 2020, which is again a decrease from $8,900 in 2019.
In 2020, 37 percent of Realtors were compensated using a fixed commission split (under 100 percent). This was followed by 23 percent who were compensated with a graduated commission split (increases with productivity), and then 15 percent with a capped commission split (rises to 100 percent after a predetermined threshold). The typical Realtor worked 35 hours per week, which is one hour less than last year.
In this highly unusual year, it can be difficult to gain enough insight to paint an accurate picture of who the typical Realtor really is. Hopefully, this NAR report presents a realistic depiction of today’s real estate professionals.