Real estate brokerage executives are increasingly confident about housing markets and the economy, but cite recruiting and training the next generation of agents as top concerns.
That’s according to a "Thought Leader" survey of more than 850 brokerage executives at leading franchises and independent brokerage firms that handled more than one-third of U.S. residential real estate transactions last year.
The survey, conducted in September by real estate marketing technology firm Imprev Inc., found 81.5 percent of brokerage executives were more confident about the housing market than they were in January.
Most (70.8 percent) said they were "highly confident" (6.2 percent) or "confident" (64.6 percent) that the housing market would continue to improve in the next 12 months, compared with 30.8 percent who said they were "less than confident."
| Survey question: How confident are you that the housing market will continue to improve in the next 12 months? | |
| Selections | Percentage of respondents |
| Confident |
64.6%
|
| Less than confident |
30.8%
|
| Highly confident |
6.2%
|
| Not confident at all |
1.5%
|
Source: Imprev Inc.
Only a slight majority (53.9 percent) were as bullish about the overall U.S. economy, with 7.7 percent saying they were "highly confident" it will continue to improve in the next 12 months, and 46.2 percent merely "confident." Four in 10 said they were less than confident about continued economic improvement, and 6.2 percent said they were not confident at all.
Top concerns about the U.S. economy included economic instability (cited by 89.7 percent of those surveyed), inflation (85.7 percent), government financial policies (85 percent), job creation (85 percent) and immigration policies (80 percent).
Although many feel the economy is still on shaky ground, brokers were more likely to identify recruiting as the biggest challenge they faced (42 percent), than profitability (19 percent) or competition (14 percent).
Of course, recruiting has a direct impact on a firm’s profitability and competitiveness. One broker said it’s difficult "covering overhead with 65 percent fewer agents."
|
Survey question: What is your company’s biggest business challenge?
|
|
|
Selections
|
Percentage of respondents
|
|
Recruiting
|
42% |
|
Profitability
|
19% |
|
Competition
|
14% |
Source: Imprev Inc.
It’s not easy retaining agents "when other struggling companies are offering desperation commission splits to recruit agents to stay solvent," said another broker. It’s also hard to keep agents who are leaving the business for lack of sales.
Another survey respondent cited the difficulty of competing with discount brokers "who only have a dollar proposition."
Then there’s the fact that Realtors as a group aren’t getting any younger. The National Association of Realtors reports that the median age of its members increased from 51 in 2006 to 56 in 2011.
"As the real estate brokerage industry ages, we may experience a knowledge walkout," said Imprev CEO Renwick Congdon in a statement. "Being aware of the possibility, and the impact it could have on a generation of homebuyers, will help the industry in recruiting and training the next generation of leaders."
Brokers said their best recruiting tool was their company’s brand and reputation, followed by technology, culture, market shares, and administrative and support services. Mentoring, leads and referrals, size and compensation were cited less frequently.
| Survey question: Why do you believe agents join your company? (Respondents checked all that applied) | |
| Selections | Percentage of respondents |
| Brand and reputation |
78.1%
|
| Better technology |
75.0%
|
| Culture fit |
75.0%
|
| Market share |
65.6%
|
| Admin & support services |
57.8%
|
| Staying power |
45.3%
|
| Mentoring |
45.3%
|
| More leads & referrals |
42.2%
|
| Size |
39.1%
|
| Support for teams |
39.1%
|
| Better compensation |
35.9%
|
| Advertising & marketing support |
28.1%
|
| Benefits |
7.8%
|
| Training & education |
3.4%
|
Source: Imprev Inc.
But when brokers lost agents to competitors, they were most likely to cite compensation (60 percent) followed by culture (30.8 percent), administrative and support services (12.3 percent), and leads and referrals (10.8 percent).
| Survey question: Why do you believe agents leave your company? (Respondents checked all that applied) | |
| Selections | Percentage of respondents |
| Better compensation |
60.0%
|
| Culture fit |
30.8%
|
| Admin & support services |
12.3%
|
| More leads & referrals |
10.8%
|
| Staying power |
7.7%
|
| Advertising & marketing support |
6.2%
|
| Brand and reputation |
4.6%
|
| Support for teams |
3.1%
|
| Better technology |
3.1%
|
| Training & education |
3.1%
|
| Size |
1.5%
|
| Mentoring |
1.5%
|
| Market share |
1.5%
|
| Benefits |
0%
|
Source: Imprev Inc.
Although brokerage executives were largely optimistic about the economy, they cited lack of job creation, threats to the mortgage interest deduction, and the number of underwater homeowners as concerns.
| Survey question: What overall factors concern you most today about the real estate industry? (Respondents checked all that applied) | |
| Selections | Percentage of respondents |
| Lack of job creation |
80.0%
|
| Threats to the mortgage interest deduction |
55.4%
|
| Number of underwater homeowners |
53.8%
|
| Lack of access to mortgage financing |
43.1%
|
| Amount of distressed inventory |
35.4%
|
| Mortgage rates going higher |
27.7%
|
| Creation of a ‘renter’ generation |
24.6%
|
| Increase in down payment needed |
20.0%
|
Source: Imprev Inc.
