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It’s no secret that the past year has been tough on real estate professionals, and it’s perhaps no surprise that many agents are leaving the field.
National Association of Realtors membership declined by 1.4 percent in the 12-month period that ended in October, coinciding with a deepening down market for real estate transactions, according to data the trade group provided to Intel. And in some states, more than 5 percent of real estate agents have already left the industry.
Using state-level NAR membership numbers and market data from Realtor.com, Intel set out to understand what’s happening in the housing markets where the agent population is falling off fastest, as well as why agent counts in other states are growing.
This analysis paints a stark picture of a U.S. housing market divided across state lines, where some regions are expelling agents in droves, and other regions are prompting thousands of new practitioners to join the industry.
It also reinforces just how powerful market data can be as a tool for explaining agent behavior.
Market forces
The biggest takeaway is clear: Agents are leaving the industry in states with high median list prices and falling inventory. On the other hand, people are joining the ranks of Realtors in states with more affordable homes and an upswing in inventory.
- These two market metrics alone explain 51 percent of the change in state-level agent count over the past 12 months, according to an Intel analysis.
But there’s a lot more at play than just inventory and affordability.
- By adding three more key market metrics into the fold — median days on market, year-over-year change in days on market and year-over-year change in median list price per square foot — the share of the change in NAR membership explained by these market fundamentals jumps to 61 percent.
When used in tandem, all five of these market metrics from Realtor.com were statistically significant in explaining agent-count changes at the state level.
Using this approach, Intel can estimate how many Realtors one would have expected over the past 12 months to join a given state’s housing market — or drop out of it — based on market fundamentals alone. The resulting relationship is pretty strong.
Chart by Daniel Houston
It’s apparent that the housing market is playing a big role in growing the ranks of agents in some states, while driving out real estate practitioners in others.
But Intel’s analysis reveals that some states face a rare blend of market forces that can have an outsized effect on an agent’s decision to bow out.
An unlikely pairing
Normally, when a housing market is slowing down and homes are sitting on the market for longer, it allows the market’s home inventory to replenish.
But in three slowing U.S. markets, inventory is drying up too.
Chart by Daniel Houston
As seen in the chart above, markets where housing is on an abnormally stagnant trajectory — with inventory drying up even as homes sit for longer on the market — are where NAR membership has taken the steepest hit over the past 12 months.
These three markets have gone down this path over the past year. All feature high price points, a shrinking pool of listings and slowing housing markets.
1. District of Columbia
Median list price: $659,950
Active listings: -6%
Median days on market: +9%
NAR membership: -8%
2. Washington state
Median list price: $642,250
Active listings: -13%
Median days on market: +3%
NAR membership: -6%
3. Massachusetts
Median list price: $769,500
Active listings: -11%
Median days on market: +1%
NAR membership: -4%
On the flip side, nine markets were on an unusually active trajectory over the past year. This means they experienced inventory growth at the same time as faster-moving homes — an appealing cocktail from a real estate professional’s point of view.
These are the three markets on an abnormally active trajectory that also saw the biggest increases in NAR membership over the past year.
1. Mississippi
Median list price: $275,000
Active listings: +20%
Median days on market: -3%
NAR membership: +2%
2. South Carolina
Median list price: $359,900
Active listings: +5%
Median days on market: -3%
NAR membership: +2%
3. Florida
Median list price: $467,250
Inventory: +18%
Median days on market: -2%
NAR membership: +1%
Beyond the numbers
Although market fundamentals might explain most of the state-level shift in agent count over the past year, they leave plenty of movement unaccounted for.
For instance, in the greater Washington, D.C., area and the remaining parts of Maryland and Virginia, Intel’s analysis of the area’s weak housing fundamentals suggests NAR would have been expected to lose 1,789 members. In reality, the trade group lost far more: 3,019 members in the region left NAR in the past year.
Meanwhile, the mostly bullish housing markets in Florida, Texas and Tennessee don’t come close to explaining the slew of agents who have added themselves to NAR’s ranks. This Big 3 group of southern states had relatively healthy housing fundamentals, but would have still been expected to lose a combined 1,991 agents amid this down market. Instead, they gained a total of 4,050 agents.
To see where your market falls, check out the table below.
