Summer Webinar Series: 2013 Commercial Member Profile & 2013 Member Profile

Jessica Lautz July 30, 2013

2013 Commercial Member Profile

Methodology
Emailed to 42,169 members Received 1,796 surveys Response rate of 4.3 percent

Business Characteristics

What do commercial members do?

60 percent brokers 19 percent broker associates 25 percent sales agents 37 percent are members of a NAR affiliate Wide varieties of specialty areas Investment sales Land sales Office leasing Retail building sales

Years of Experience in Real Estate

35
30 25 20 15 10 5 0 Broker NAR's Commercial Members Broker Associate Sales Agent Appraiser 13 31 31

25

25

Licensed As

Business Activity

Sales and Leasing Volume

2006 Sales transaction volume Median dollar value of sales transactions $2,248,700 2008 $2,024,900 2009 $1,067,000/ $1,767,900 $407,200 2010 $1,282,100/ $1,722,200 $397,600 2011 $1,058,300/ $2,010,500 $414,300 2012 $1,857,100/ $2,507,700 $433,600

$553,000

$544,100

Typical sq ft of sales transactions

Leasing transaction volume Leasing dollar value Typical sq ft of leasing transactions

15,770

14,000

9,026

8,900

9,600

10,400

$183,300

$244,300

$45,000/ $330,200 $140,600 4,359

$118,400/ $145,000 $145,000 4,100

$93,100 $402,100 $144,800 4,100

$230,500/ $476,400 $169,100 4,200

$97,700 4,230

$128,900 4,300

Transaction Volume
8
8

8
7

6
6 5 4

3
3 2 1

0
All Commercial Members 2 years or less 3 to 5 years 6 to 15 years 16 to 25 years 26 years or more

Business Revenue and Firm Affiliation

Median Gross Annual Income, 2006-2012

$120,000 $115,600 $99,900 $86,000 $68,600 $76,500

$100,000
$80,000 $60,000 $40,000 $20,000 $0 2006

$90,200

2008

2009

2010

2011

2012

Median Gross Annual Income, 2012

$120,000 $120,000
$100,000 $80,000 $60,000 $40,000 $20,000 $0 $90,200 $98,900 $86,400 $69,900

2012

Broker

Broker Associate

Sales Agent

Appraisal

Median Gross Annual Income by Experience

$140,000 $123,700 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 All Commercial Members 2 years or less 3 to 5 years 6 to 15 years 16 to 25 years 26 years or more $35,400 $90,200 $68,200 $90,400 $94,700

Business Practices
83 percent work 40+ hours/week 52 percent spend 75 to 100 percent of time on commercial real estate 45 percent work on commission split basis and 34 percent work 100% for commission 56 percent of firms are local 31% are independent and not affiliated with a firm

Demographics

Who are commercial members?

Typical commercial member: 59-years-old 78 percent are male 91 percent are white/Caucasian 65 percent have at least a Bachelors degree

2013 Member Profile

Jessica Lautz May 13, 2013

Methodology

Tailored Design Method Mailed hard copy and emailed to 58,068 members Re-mail reminder Received 4,883 surveys Response rate of 8.4 percent Incentive drawing for gift cards

Business Characteristics

What do our members do?

27 percent brokers 18 percent broker associates 56 percent sales agents 4 percent appraisers

Years of Experience in Real Estate

14 12 12 10 10 8 8 7 10 11 13

6
4 2 0 2007 Survey 2008 Survey 2009 Survey 2010 Survey 2011 Survey 2012 Survey 2013 Survey

Will Remain Active in Real Estate for Two More Years by Experience

All Members
Very certain Somewhat certain Not certain 80% 14 6

2 years or less
77% 19 5

3 to 5 years
81% 15 5

6 to 15 16 years or years more

82% 13 5 78% 14 8

Business Activity

Business Activity
2009 Survey Properties appraised Transaction sides Percent of members who had a transaction involving a foreclosure Percent of members who had a transaction involving a short sale 200 7 41% 2010 Survey 200 7 48% 2011 Survey 200 8 51% 2012 Survey 200 10 56% 2013 Survey 200 12 53%

28%

40%

45%

51%

51%

Brokerage sales volume

Number of properties managed

$1.2 million
40

$1.2 million
33

$1.1 million
25

$1.3 million
30

$1.5 million
49

Transaction Sides
14 12 12 10 10 13

8
8 6 4

4
2 0 ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more

Most Important Factor Limiting Clients

RESIDENTIAL SPECIALISTS Broker/ Broker Sales Associate Agent Difficulty in obtaining mortgage finance Difficulty in finding the right property No factors are limiting potential clients Ability to sell existing home Expectation that prices might fall further Low consumer confidence Concern about losing job 30% 22 13 10 8 8 2 28% 28 13 8 8 5 2

Commercial Specialists 21% 25 24 5 16 8 0

Where Clients Come From

21 percent repeat business from past clients 21 percent referrals from past clients 4 percent off member website (of those with a website) Only 34 percent of members report any business from an open house

Technology

Changes in Technology
Communication Source
Realtor website Realtor blog

2009 Survey
60% 7

2010 Survey
63% 10

2011 Survey
62% 10

2012 Survey
62% 10

2013 Survey
64% 12

Use of social media

35

51

49

54

56

Percent of Business from Website by Amount to Maintain

14 12 12%

10
8 6 7%

4
4

4%

3%

2
0% 0

ALL REALTORS

None

Less than $100

$100 to $499 $500 to $999

$1,000 or more

Income and Expenses

Gross Annual Income, 2001-2012

$60,000 $52,200 $50,000 $40,000 $30,000 $20,000 $47,700

$49,300
$47,700 $42,600 $36,700 $35,700 $34,100 $34,900 $43,500

$10,000
$0 2001 2002 2004 2006 2007 2008 2009 2010 2011 2012

Net Annual Income, 2012

$35,000 $30,000 $27,400 $23,200 $22,200 $33,500

$25,000 $20,000
$15,000 $10,000 $5,000 $0 In 2012

In 2011

Broker/ Broker Associate

Sales Agent

Gross Annual Income by Experience, 2012

$60,000 $50,000
$40,000 $29,600 $30,000 $20,000 $9,700 $10,000 $0 ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more $57,300 $46,000

$43,500

Expenses 2010-2013
2010 2011 2012 2013

Total Expenses
Business Use of Vehicle Technology

$5,480
1,580 720

$4,270
1,680 630

$4,520
1,770 630

$4,900
1,790 690

Professional Development
Administrative Marketing of Services Median percent spent on online marketing Business Promotion Affinity/Referral Relationship

700
690 690 10% 670 0

600
720 550 10% 580 0

600
560 510 10% 560 0

640
830 590 10% 640 0

Office/Lease Building

Office and Firm Affiliation

Where do our members work?

Franchised company 41% Other 3%

Independent company 56%

Relationship to the Firm

Other, 11% Employee, 6%

Independent Contractor, 83%

Demographics

Who Are Our Members?

Typical member: 57-years-old 57 percent are female 50 percent at least a Bachelors degree 34 percent had prior career in management/business/financial or sales/retail 77 percent real estate is only occupation Household income in 2012--$99,400 47 percent real estate is primary source of income for household

Age Rising
57
57 56 56 54 52 52 51 52 51 52 54 56

55
54 53

52
51 50

49
48 1999 2001 2003 2005 2007 2008 2009 2010 2011 2012 2013

Invest in Their Product

87% own their own home 13% own a vacation property 36% own a residential investment property 10% own a commercial property

Next up on the Summer Webinar Series

August 6th: 2013 Investment and Vacation Home Buyer Survey

Where to find NAR Research

Jessica Lautz: jlautz@realtors.org, 202-383-1155 NAR Research www.realtor.org/research-and-statistics Economists Outlook Blog: economistsoutlook.blogs.realtor.org FaceBook: facebook.com/narresearchgroup Twitter: twitter.com/NAR_Research