The vast majority of U.S. real estate firms in 2022 were single-office entities not affiliated with a franchise network, according to the 2023 Profile of Real Estate Firms published by the National Association of Realtors (NAR).
Last year, 81% of the nation’s real estate firms operated out of a single office and typically had three full-time real estate licensees. Roughly nine out of 10 firms – 86% – were independent and non-franchised, while nearly one-third (31%) of brokers of record were either CEOs, COOs, presidents or owners of a multi-office firm; nearly two-thirds (65%) were managers or owners of a single-office firm.
During 2022, NAR found that single-office firms had a median brokerage sales volume of $5.3 million and 15 real estate transaction sides, up from $4.5 million and down from 19 transaction sides, respectively, in 2020. Firms with four or more offices had a median brokerage sales volume of $154.6 million and 403 transaction sides in 2022, an increase from $146.2 million and a decrease from 571 transaction sides two years earlier.
The typical firm generated 48% of its sales volume from repeat business from past clients and 47% from past client referrals.
Nearly one-third of firms – 30% – expect profitability or net income from all real estate activities to increase this year, down from 58% in 2021. Housing affordability, maintaining sufficient inventory and keeping up with technology were the main concern of the real estate professionals polled for the report.
“Housing affordability has had an impact on real estate firms’ overall sales activity,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “There are fewer buyers who can purchase a home due to the rise in prices and interest rates, and fewer sellers are motivated to make a move. While sales are down, sales volume has increased as home prices have augmented because of limited inventory.”
“Due to tight inventory, the outlook among real estate firms is more conservative since the pandemic-induced housing boom,” Lautz added. “Only 30% of real estate firms believe there will be an increase in profitability from all real estate activities, compared to 58% two years ago.”
Small and local is how real estate should be.