The majority of real estate firms responding to a survey from the National Association of Realtors (NAR) expect profits—and competition—to heat up over the next year as the housing market continues to look up, the association.
NAR released on Tuesday its 2013 Profile of Real Estate Firms, which examines the makeup of companies, their offerings, and their expectations for the industry. This year’s report was based on a questionnaire mailed to a national sample of 121,931 executives at real estate firms; the survey’s response rate was 5.5 percent.
Out of those firms that responded, 84 percent were independent, non-franchised companies, while 13 percent were independent franchises; the remainder were subsidiaries of a national or regional corporation. The majority—approximately 80 percent—specialize in residential brokerage, with commercial brokerage and residential property management the most common secondary functions.
Sixty-nine percent of respondents said they expect profitability to rise over the next year, and most are preparing to battle for every dollar.
“Two out of three real estate firms expect competition in the marketplace to increase, both among firms and nontraditional market participants,” said Paul Bishop, NAR’s VP of research. “Because real estate is an entrepreneurial field, some experimentation in business models is likely when the market is in a recovery phase.”
In response, many firms are bolstering their ranks with new recruits.
“Although conditions vary around the country, 45 percent of real estate firms are actively recruiting agents, largely due to growth in their primary business,” saidNAR president Gary Thomas.
Out of those that are currently on staff at these firms, 72 percent have an academic degree. More than eight in 10 firms have licensees with professional certifications or designations, and more than six out of 10 provide training and education programs for their staff or sales agents. The typical firm requires new agents to receive a median of 21 hours of training or continuing education each year, while experienced agents must receive 12 hours.
Taking a look at potential obstacles ahead, Thomas noted “six in 10 firms cite profitability, 44 percent identified local or regional economic conditions, and 42 percent are concerned about both maintaining sufficient inventory and keeping up with technology.”