This article was shared here with permission from Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.
Real estate is a high-churn business, with over 144,000 agents changing brokerages in the past 12 months.
Why it matters: For brokerages, this highlights the critical importance of recruiting and retention — and knowing which types of agents are the most likely to move.
Context: The joke is that the median number of houses sold per agent each year is zero — and the truth isn’t too far away.
- Approximately half (47 percent) of the 1.4 million agents in this analysis sold zero houses in the past 12 months.
- These non-producers may be on teams, which was true for about 26 percent of agents in 2018, according to The National Association of Realtors.
Agent churn is when an agent changes brokerage; it does not include agents new to or exiting the industry, and the time period is the last 12 months (June 2023 – June 2024).
- Including non-producers, 10 percent — or around 144,000 agents — changed brokerage in the past 12 months.
- And lower producers in the $1 – $10 million range were the most likely to churn.
Excluding non-producers, some of whom were part of a team, 14 percent of the remaining “active” agents changed brokerages in the past 12 months.
- It’s notable that the highest producing agents, $50 million and above, churn at higher than 10 percent — a significant shift in revenue (and a recruitment and retention opportunity).
Tenure matters: The longer an agent has been in the industry, the less likely they are to change their brokerage.
- The newest agents — those in the industry between 12 and 23 months — were the most likely to switch brokerage, while agents in the industry 12+ years were the least likely to change.
Agent churn is also correlated to office size.
- The largest brokerage offices, with over 500 agents, are churn machines with the highest percentage of agents joining and leaving; agents are 33 percent more likely to leave a big office vs. a small one.
- Keep in mind, the publicly reported agent counts of brokerages obfuscate true churn; a 2 percent increase in agent count may be the result of 12 percent joining and 10 percent leaving.
The bottom line: Any business forecasting a minimum of 10 percent churn of its most productive employees or its total revenue is in for a challenging year ahead.
- By its very nature, real estate is a high-churn business, which represents a massive shift in potential brokerage revenue each year.
- This is a risk and an opportunity — the constant movement of agents means that brokerages can’t stand still and always need to be offering the best proposition to current agents and prospective recruits.
Mike DelPrete is a strategic advisor and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.
