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

                              Nov 21, 2022 - Multifamily Developer Confidence Drops
                              • Two key performance indicators of the multifamily housing market showed signs of weakness in the third quarter of 2022, according to the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB) in November. The Multifamily Production Index (MPI) – which measures the construction of subsidized low-rent units, apartments for-rent at market rates, and for-sale condominiums – fell 10 points to 32 in Q3 2022 compared to Q2. The Multifamily Occupancy Index (MOI) measures the industry’s perception of existing apartment occupancy, and the Q3 MOI dropped 15 points to 45 from Q2. While the number of multifamily units under construction is at the highest level since 1972, developers are seeing warning signs ahead amid high costs for materials, land, and financing.
                              • Sales of existing US homes fell 5.9% in October from September and were down 28.4% year over year, according to the National Association of Realtors (NAR). October marked the ninth consecutive monthly drop as rising interest rates slow home sales. NAR chief economist Lawrence Yun said, "More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher. The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years."
                              • Weak consumer confidence may be slowing new household formations and rental demand, according to rental data tracking firm RealPage. More renters moved out of apartments in the third quarter than moved in, marking the first time that has happened since 1992. Year-to-date apartment demand through Q3 was down by more than 47,000 units. Even so, RealPage suggests apartment fundamentals are sound; vacancies rose one percentage point in Q3 but were at a healthy 4.4%. Lack of affordability could be tempering demand, and economic uncertainty may be prompting would-be renters to have a wait-and-see approach to changing their living situation. However, if inflation cools and job and wage growth hold up, rental demand may rise in spring 2023 due to pent-up demand.
                              • Some homebuilders are bracing for an even more challenging housing market in 2023, according to CNBC. While rising interest rates have kept many would-be first-time home buyers on the sidelines, some industry insiders suggest affluent buyers may also be hesitating due to diminished confidence in the economy. NAHB Chief Economist Robert Dietz has said 2022 will be the first year since 2011 to see a year-over-year decline in housing starts. In a recent press release, Dietz said,” While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers.”
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