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 94,000 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 94,000 firms in the US with $128 billion in annual revenue and about 1.1 million 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 19, 2024 - Wage Growth Outpaces Price Gains
                              • Producer prices charged by residential real estate agents and brokers increased moderately in the fourth quarter of 2023 compared to Q4 2022, according to the Bureau of Labor Statistics (BLS). However, BLS data shows real estate agent and broker wages have grown at more than double the rate of pricing. Weaker pricing power amid steadier wage growth may suggest residential real estate agent and broker margins are under pressure from rising wages. In Q4 2023, industry employment was flat compared to a year earlier, according to the BLS.
                              • In mid-March, the National Association of Realtors (NAR) reached a nationwide settlement of claims that the home sales industry artificially inflated agent commissions, according to The Wall Street Journal. The deal follows an October federal jury verdict in Missouri, which found that several large residential brokerages and the NAR conspired to keep home sale commissions artificially high. The jury awarded the plaintiffs – home buyers in several Midwestern states – about $1.8 billion in damages. As part of the $418 million settlement, the NAR agreed to abandon decades-old industry rules requiring most home-sale listings to include an upfront offer detailing buyer agent compensation. Pending approval in federal court, listings in most of the country will no longer include the upfront offers to buyers’ agents, freeing buyers to negotiate compensation details with their agents. The $418 million in settlement money will be distributed nationwide to consumers who’ve recently sold a home. Industry watchers suggest the ruling could reshape the industry, paring down Realtor ranks by half.
                              • To cope with housing shortages and a lack of affordability, many municipalities are changing their zoning rules to encourage more housing development, according to NPR. Cities find their zoning rules rigid and outdated, making building new housing stock difficult and expensive. Some cities are changing their rules to allow more multifamily developments, including townhomes and apartments, and permitting accessory dwelling units (ADUs), which add a secondary structure on one lot. Some cities have also reduced lot-size requirements, encouraging greater density and the number of available housing units.
                              • Home sizes increased during the pandemic as families sought more space, and interest rates were near record lows. As interest rates have risen and homes have become less affordable, the trend is reversing, and homes are getting smaller, according to National Association of Home Builders (NAHB) analysis of Census Bureau data. In the fourth quarter of 2023, the median single-family home square footage was 2,156, which is the lowest since 2010. The NAHB suggests that smaller home sizes will likely persist amid continued affordability issues.
                              Get A Demo

                              Vertical IQ’s Industry Intelligence Platform

                              See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                              Build valuable, lasting relationships by having smarter conversations -
                              check out Vertical IQ today.

                              Request A Demo