No one is more dependent on statistics than real estate agents.
Your entire livelihood depends on stats such as the average home sale price in your market, how many homes you sell in a typical quarter, current mortgage rates, and your commission rate.
Any change in these variables can have a huge impact on your life.
Statistics are fascinating as well. For example, here’s one pretty amazing statistic from Capterra: we have 251 listings for real estate property management software. Two hundred fifty-one! That’s a lot of choices.
But statistics can also be informational, helping you better understand your industry and craft a strategy to increase earnings.
So we’ve found six amazing statistics about the real estate industry in 2017… and how you can turn them to your advantage.
1. The housing market has risen 11.4% since 2008
It’s hard to believe it’s been a decade since the housing market collapsed, plunging the economy into crisis. In the fourth quarter of 2008 alone, home prices fell 12.4%, the largest year-over-year decline since the National Association of Realtors began keeping records in 1979. In 2017, the market has regained a big chunk of that loss, with the median home price rising from $180,100 in the last quarter of 2008 to $200,700 as of Aug. 30, 2017—an 11.4% increase.
We’re still not back to the dizzying heights of 2007, when median home prices hit $217,900. But considering what happened after that, maybe that’s a good thing.
How this affects you: Part of selling homes is selling your client on the idea that a home is a good investment, and, for most home buyers, the memory of the housing market collapse is still fresh. It’s a huge financial decision, and people want to know they’re not going to take a bath when they pull the trigger on home ownership. Pointing out that homes have steadily but surely recovered most of their value in the last 10 years could help you close that deal.
2. Real estate agent salaries are surging by at least 10%
Home prices aren’t the only thing that have shown a dramatic turnaround since the collapse—so have the salaries of real estate agents. In 2008, the median gross income for real estate salespeople in the U.S. was $36,700, a drop of 14% from 2007.
Exactly how much real estate agents are getting paid today seems to be in dispute—Salary.com has it at $40,204, the National Association of Realtors has it at $42,500, and PayScale and Glassdoor have it in the high $40,000’s—but it’s clear the trend lines have reversed.
How this affects you: Knowing how much most real estate agents make can help you both negotiate your salary and rates with your broker, as well as help you set targets on how much you need to sell.
3. Millennials will make up 33% of home buyers in 2017
Millennials are expected to be a third of the buying market, according to Realtor.com. They’re even expected to eclipse baby boomers (30%) in terms of the percentage of home buyers.
And part of the reason for that is 17% of people under 35 years of age were able to save up for down payments in 2016, boosting their ability to afford a home in 2017.
How this affects you: You might be tempted to dismiss the 20-something couple that walks into your open house in favor of the middle-aged pair. But, as the research shows, that’s a mistake.
4. Suburban markets will see the vast majority of residential growth
Suburban life has often been parodied in our culture, but its popularity continues to skyrocket. A staggering 80% of residential growth will happen in suburban communities over the next 10 years, compared to 71% from 2010 to 2015. By comparison, urban areas will make up 15% of the growth through 2025.
How this affects you: People still love the low prices, light traffic, and other perks that suburbia has to offer, so play that up when you’re marketing a home to a seller. After all, selling houses isn’t just about the house itself.
5. The U.S. economy is growing, but mortgage rates are creeping up
The U.S. economy is expected to continue to chug along at a 2% growth rate in 2017 and 2018, and home price appreciation continues at a healthy clip of3.9% growth year over year (although that’s down from 4.9% in 2016). But mortgage rates are starting to go up, with the Home Buying Institute projecting that 30-year mortgage rates will increase from 3.9% in the first quarter of 2017 to 4.4% by the end of the year.
How this affects you: Time is against the buyer, and on your side to close a sale. With the economy in good shape, your client likely has never been closer to having the means to own a home, but time is running out to lock in a good mortgage rate. So encourage your clients to make an offer as soon as possible rather than wait for a better deal.
6. Most buyers are finding their home through the Internet
The National Association of Realtors, in a 2017 report, discovered that 56% of buyers 36 years old and younger found their homes on the Internet, while 50% of buyers 37 to 51 years old found their homes online. Only older buyers sought out an agent first.
Across all generations, half of all buyers frequently used the Internet to find their home, and an amazing 93% of buyers 36 years and younger frequently used the Internet throughout the search process.
How this affects you: As we mentioned above, millennials make up a greater share of the market, so you need to recognize the power of the Internet and harness it for your own potential. Check out our easy guide to improving your real estate website to make it a destination for people searching for their dream home.
What statistics about the real estate industry fascinate you?
We can’t list all real estate statistics here, of course, but surely you’ve come across a figure that just amazed you, or at least got you thinking. We’d love to discuss some stats you’ve found in the comments section below,and what you think they mean for real estate agents.
Or, perhaps you disagree with an interpretation we have on one of the statistics above. That’s cool, we want to hear what you think about them, too.
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