Is today's agent prepared to succeed with the Millennial real estate customer?

June 29, 2017 Kat Campise

Is today's agent prepared to succeed with the Millennial real estate customer?

 

In a sense, it would be logical to conclude that the average real estate agent is within the Millennial generation. After all, a day doesn’t go by when some blog or article uses the term “Millennial” in the headline.

 

If we put aside the fact that many misclassify the generation based on an extended number of birth years -- Boomers and Gen X’ers are given a 15 year time span on average whereas Millennials have anywhere between four to five years added to their generation birth rates -- a recent report put out by the U.S. National Association of Realtors (NAR) contradicts this Millennial-real estate agent conclusion.

 

How Many Real Estate Agents Are There?

 

Before we dive right into the statistics of NAR’s report, it’s prudent to understand there are contradictory statistics regarding just how many real estate agents there are in the U.S. The Bureau of Labor and Statistics estimates 151,840. But, that doesn’t include “self-employed workers.” Meanwhile, NAR states that another organization, The Association of Real Estate License Law Officials (ARELLO), estimates the number of licensed real estate agents to be around two million.

 

As of May 2017, NAR has 1,255,619 members. If we round ARELLO’s estimation to a solid two million, then approximately 63% of licensed real estate agents are NAR members. Since NAR has a readily available database of members within the real estate market, they are the primary source of statistics regarding real estate agents. Also, NAR provides the largest collective sample size -- an important fact when you’re calculating statistical measures. Furthermore, if you run a Google search about real estate agent statistics, all roads lead back to NAR.  So, to answer the question “Who is the average real estate agent?”, NAR’s data becomes the focal point.

 

Boomers and Gen X are in the Lead

 

Returning to the generation divide, NAR reports that the median age of real estate agents as of 2016 is 53. Therefore, the current trend is real estate agents who are between 40 to 60 years old. Only 30% of NAR’s members are over the age of 60, and 4% are below the age of 40.

 

Depending on which generational age range you use, this places Gen X’ers and Boomers as the dominant generations within the real estate agent population. Drilling further down into demographics, most of NAR’s membership are white, college educated females who have been in the industry for ten years and own a primary residence.

 

In this age of “Content is King,” where posting blogs is a cornerstone of informational advertising, real estate agents haven’t quite come around to engaging in this form of marketing. Only 10% have blogs (even though 52% have personal websites)! There is no additional information as to why this is the case.

 

Granted, only 1% of the NAR members business arrived through their website. Their primary marketing tools are FaceBook and LinkedIn. This could be attributed to the fact that both forms of social media provide real-time posting of pictures and information regarding the agent’s local housing market. Whereas blogs are static and best used for industries where there are constant changes occurring (the real estate market isn’t known for quick, continual, and disruptive changes that warrant a consistent stream of blog postings).

 

Million Dollar Listings? Not so Fast!

 

The hot housing market has bumped agents median income to $42,500. But, this isn’t what the average new agent earns. Those with less than two years of experience scraped by with under $10,000 in earnings. On the flip side, agents who passed the 16 years of experience mark were more likely to earn over $100,000 (the median for this group was $78,850). Considering that most agents work 40 hours per week, there’s a significant time investment to become a successful real estate agent.

 

With the real estate reality TV shows that only demonstrate the top performing Millennial agents in large metropolitan areas (where the luxury housing market can yield a huge commission), there is a fact versus fiction divide. Per NAR’s research, the young and new real estate agents don’t fare as well financially when compared to the older, more established group.

 

Perhaps younger generations have a bubble bursting moment when they enter the profession with visions of million dollar listings only to find their gross monthly earnings barely reach the $800 threshold. Unlike the tech industry, where a new shiny app claiming to be fueled by artificially intelligent technology can possibly yield the interest of a generous venture capitalist, the real estate industry is a slow beast. And, so far, it appears the primary demographic -- according to NAR’s report -- who has the patience to weather through the large time investment are college educated women above the age of 40.  


 

Will We See a Generation Change Hands?

 

For certain, Millennials and younger consumers are driving marketing and advertising today. Just take a look around at commercial on TV, app-based advertising on mediums like Snapchat.

 

With the younger generations set to inherit trillions in the next couple of decades, it’s no wonder that most successful retail companies are already moving swiftly to perfect not only tried and true digital marketing mechanisms, but they’re also experimenting and pushing envelopes now as they try to settle into the center of what will be needed to reach these younger consumers who will very soon make up the “buying public.”

 

Yet, if you look to the statistics, most real estate agents still struggle even with websites, blogs and paid ads; all the venerated hallmarks of today’s mainstream, technology-driven inbound marketing principles. It’s a gap that’s easily observable by simply comparing the websites of your local, neighborhood agents to the kind of thing fielded by tech-centric giants like Zillow.

 

If you observe present data, it’s not hard to conclude that we’ll soon see natural selection and evolution at work in the real estate profession. The most tech-savvy, quick-adapting and agile agents will succeed in the long-term and even very near future.

 

The big question is, will an influx of “new blood” into the profession steadily replace the older generations or will the current demographic adapt to maintain a longer hold on what has been a very traditional, slow-changing career field.

 

About the Author

Kat  Campise

Kat is a freelance Data Scientist who specializes in text analytics (natural language process). She’s merged her technical writing with a penchant for penning potent prose and provides writing and editing services to individuals and enterprises in the real estate, technology, and finance industries. She is also currently a marketing consultant to HomePocket.

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