Residential Brokers & Property Managers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 137,200 residential real estate and property management firms in the US work with owners to find buyers for property for sale, lessees for property for rent, and to maintain and manage rental property. Over 60% of industry revenues come from the sale of residential property, and the remainder comes from property management services.

Fewer Qualified Buyers

Mortgage lenders adopted stricter lending practices in the wake of the 2008 financial crisis, making it more difficult, especially for first time home buyers, to qualify for new loans.

Greater Internet Marketing

Residential real estate brokers and property managers are increasing their use of both the Internet and multiple listing services (MLS) to advertise available properties to prospective buyers and renters.

Industry size & Structure

The typical residential broker and property manager employs 3-12 workers and generates about $1 million in annual revenue.

    • There are about 137,200 firms in the US with $128 billion in annual revenue and about 801,300 employees.
    • The industry is highly fragmented with the 50 largest firms totaling 21-29% of industry revenue.
    • The largest firms include Century 21, Re/Max Realtors, and Coldwell Banker.
    • The majority of industry employees are property managers and real estate agents. The remainder are office/administrative support and management.
                              Industry Forecast
                              Residential Brokers & Property Managers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 17, 2023 - Banking Jitters Push Mortgage Rates Lower
                              • Mortgage rates dipped slightly after the collapse of Silicon Valley Bank, but housing industry watchers are uncertain if lower rates will persist long enough to provide much relief from the affordability issues that have slowed the US housing market, according to Yahoo Finance. Some financial market watchers note that the banking sector's jitters could slow the Federal Reserve’s strategy of taming inflation with rate hikes. Redfin chief economist Daryl Fairweather told Yahoo Finance, “There's still a lot of uncertainty but in the near term, I do expect mortgage rates to drop. And I expect buyers to take advantage of those mortgage rates because we've seen buyers be incredibly sensitive to those interest rates.” However, some industry insiders suggest that rates would need to drop and stay low for a sustained period to lure more buyers into the market.
                              • Apartment rents, which have been on the decline, are expected to come under further pressure as a flood of new supply comes online in 2023, according to The Wall Street Journal. Between August 2022 and January 2023, apartment rents dropped in every major US metropolitan area, according to Apartment List. In January, new-lease renters paid a median rent that was 3.5% below August 2022 levels, and it marked the first time in five years that rents declined every month over a six-month period. Demand for apartments during the pandemic pushed rents to record highs, but the recent drop signals that renters may have reached the limit of what they can afford. Rents are expected to face more downward pressure as nearly half a million new apartments are completed this year, the biggest annual increase in supply since 1986.
                              • Multifamily developer confidence improved in the fourth quarter of 2022 but remained in negative territory, according to February’s Multifamily Market Survey (MMS) report by the National Association of Home Builders (NAHB). The Multifamily Production Index (MPI) rose two percentage points in Q4 to 34 compared to the third quarter of 2022. The Multifamily Occupancy Index increased by four points to 49 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. While multifamily housing demand is robust, supply is catching up with demand in some markets. The NAHB expects multifamily production will slow significantly over the next two years after rapid growth in 2022. Developers face several challenges, including high regulatory costs, difficulty securing new project financing, and high interest rates.
                              • Single-family housing starts rose 1.1% in February 2023 compared to the prior month but were down 31.6% compared to February 2022, according to the US Census Bureau. Single-family home builders continue to struggle with high mortgage rates and elevated costs for building materials, according to the National Association of Home Builders (NAHB). However, while the NAHB continues to expect volatility in the market for new single-family homes, it expects housing starts to tick upward in the second half of 2023 as interest rates ease, which should release demand that has been pent up due to the lack of affordability.
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