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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                              Coronavirus Update

                              Nov 9, 2021 - Soaring Rents Draw Investors
                              • Rents for single-family homes increased 9.3% year over yearin August, up from an 8.5% year-over-year increase in July, according to CoreLogic. All major metropolitan housing markets covered by CoreLogic showed positive rent growth for the first time since before the pandemic. The gains have investors rushing to buy and build more rental properties. In the past year there were roughly 43 announcements totaling more than $30 billion in capital targeting US rental housing, according to John Burns Real Estate Consulting.
                              • Goldman Sachs estimates that 3.5 million households could be evicted now that the federal eviction moratorium has ended. The National Equity Atlas Project estimates the number is closer to 6 million. The US Supreme Court blocked an eviction moratorium which the Biden administration put in place in early August. Demand for individual and family services may increase as a result. "Congress was on notice that a further extension would almost surely require new legislation, yet it failed to act in the several weeks leading up to the moratorium's expiration," the court wrote in an unsigned, eight-page opinion. "If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it," the court said.
                              • Migration out of pricey coastal cities to cheaper rural and inland areas may wind down by the end of 2021 as vaccinations continue and more employees return to their offices, according to Greg McBride, chief financial analyst at Rich Kleinman, co-CIO and head of US research and strategy at LaSalle Investment Management Americas, says that the migration to lower-cost regions will likely continue in 2021, but perhaps not at the same magnitude seen last year. “Long-term the [migration] trends favor less expensive places, but not always rural areas,” he said.
                              • “Traditional” real estate commissions paid by the home seller are being challenged as buyers rely more on technology for video-tours and neighborhood research, a trend accelerated by the coronavirus pandemic. The commissions may be as high as 6%, and are typically evenly split between seller’s agent and the buyer’s agent. Lawsuits brought by private home sellers, an online brokerage, groups of California brokers, and the US Justice Department, claim that brokers’ practices in charging and collecting commissions violate US Antitrust laws and amount to a conspiracy to keep their fees artificially inflated, according to the site. One such lawsuit has been brought by REX, an online brokerage whose fee starts at 2%. When REX represents a home buyer and is given a 3% fee from the seller’s agent, it will give the buyer 50% of its broker commission back to the buyer as a rebate. REX filed suit in Oregon in December 2020, challenging the state’s policy of banning REX and other brokers from refunding the commissions back to the buyer. REX is looking to potentially file suit in Louisiana, Missouri, and Tennessee which have similar anti-rebate laws.
                              • Sales of previously-owned homes increased 7% month over month but decreased 2.3% year over year in September, according to the National Association of Realtors (NAR). The median existing-home price for all housing types decreased 3% month over month but increased 13.3% year-over-year to $352,800. "Some improvement in supply during prior months helped nudge up sales in September," said Lawrence Yun, NAR's chief economist. "As mortgage forbearance programs end, and as homebuilders ramp up production – despite the supply-chain material issues – we are likely to see more homes on the market as soon as 2022," said Yun.
                              • Employment in the real estate industry increased 4.4% year over year in October but was up just 2.7% from the pre-pandemic month of October 2019. Employment of real estate agents and brokers increased 8.5% year over year in September and 5.9% from September 2019. Employment in the property management industry increased 4% year over year in September and was up 5.9% from September 2019.
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