New NAR Report Says Industry is 'Optimistic' about The Future of Real Estate
Realtors are looking forward to what the future may have in store for them, a new report from the National Association of Realtors said.
The report, 2014 National Association of Realtors Profile of Real Estate Firms, stated that realtors are “confident” about the “future growth and profitability of their sector.
“The real estate industry is competitive, and realtors know that to be successful they must have a strong entrepreneurial spirit and the know-how to make a business thrive, even in a difficult market,” NAR President Steve Brown, who also owns Dayton-based real estate firm Irongate, Inc., said in the statement.
“Despite continued challenges, real estate firms expect market growth in tandem with the ongoing recovery,” he said.
According to NAR’s survey, 66 percent of housing firms expect their business and profits to grow through the following year. The same is true for commercial real estate firms, noted Lawrence Yun, NAR’s chief economist.
“Commercial real estate firms are even more optimistic, with 71 percent expecting profitability to improve,” said Yun.
Average sales volume for residential brokerage firms that responded to the survey were $4.7 million last year. Sales volume reached $4.3 million for commercial real estate firms.
According to survey results, 35 percent of their sales volume are from past client referrals; 30 percent are from repeat business; 10 percent came from their website, and five percent were closed deals from social media.
Among the challenges that slowed these firms, 59 percent said that millenials’ ability, or rather, inability to buy a home was the most commonly encountered hurdle.
Meanwhile, profitability, a learning curve with new technologies, “maintaining adequate inventory,” and “local or regional economic conditions” are the most reported issues that realtors expect to deal with in the next two years.
But these concerns are not stopping the brokerage firms from expanding. 45 percent are adding new sales agents to their team, with 87 percent of these firms citing “business growth as their primary reason for recruiting.”
A majority 81 percent of participating firms focus on residential brokerage, with commercial brokerages and residential property management as the most popular secondary functions. 84 percent of the firms are independent, non-franchised firms, while 14 percent are independent, franchised firms, according to NAR. Others were subsidiaries of a national or regional company.
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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.