WASHINGTON (June 17, 2015) - While total unit sales from international home buyers decreased from last year, total sales dollar volume increased 13 percent, according to the National Association of Realtors® 2015 Profile of Home Buying Activity of International Clients .
For the period of April 2014 through March 2015, total international sales were estimated at $104 billion, compared to the previous year's estimate of $92.2 billion. This represents 8 percent of the total existing-home sales dollar volume.
"In 2014, sales transaction to buyers outside of the U.S. dropped 10 percent, possibly due to the strengthening of the U.S. dollar in relation to international currencies and weakening foreign economies," said NAR Chief Economist Lawrence Yun. "However, the amount of money spent has increased; this means international purchasers in the U.S. have become an upscale group of buyers, spending more money on fewer homes."
In 2014, five countries accounted for 51 percent of all purchases by international buyers: China, Canada, Mexico, India and the United Kingdom. For the first time, buyers from China exceeded all other countries in terms of units purchased and dollar volume, purchasing an estimated $28.6 billion worth of property. Buyers from Canada followed with $11.2 billion in purchases, followed by India with $7.9 billion, Mexico with $4.9 billion and the U.K. with $3.8 billion.
International buyers tend to purchase more expensive properties with the average purchase price being $499,600, compared to the overall U.S. average house price of $255,600. Chinese buyers typically purchased the most expensive properties, at an average price of $831,800.
Thirty-five percent of Realtors® reported working with an international client in 2014, up from 28 percent in 2013. About 46 percent of reported international transactions were intended for primary residences, 20 percent for residential rentals, and 26 percent for investment rentals, vacation homes or both. Global buyers also purchased properties for commercial rentals and as residences for children studying in U.S. educational institutions. Indian buyers were the most likely to purchase a primary residence (79 percent), while Canadian buyers were most likely to purchase property as a vacation home (47 percent).
While international buyer clients purchased property across the nation, four states accounted for half of all international sales: Florida, California, Texas and Arizona. Florida remains the top destination for international buyers, claiming a 21 percent share of all foreign purchases; California comes in second with a 16 percent share, Texas with 8 percent and Arizona with 5 percent. Chinese buyers tended to gravitate towards the West Coast, which provides ample education, business and trade opportunities, while Canadians seeking winter vacation opportunities focused on the Southwest and Florida.
The majority of international purchases (55 percent) were made with all-cash, compared to about 25 percent of all purchases made by domestic buyers. Mortgage financing tends to be an issue for non-resident international clients because of a lack of a U.S. based credit history or Social Security number, difficulties in documenting mortgage requirements, and financial profiles that can be different from those normally submitted to financial institutions by domestic residents.
"Working with a Realtor® gives buyers from across the globe a considerable advantage," said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. "Realtors® who have completed NAR's Certified International Property Specialist designation have obtained specialized training and are best prepared to help clients with the unique challenges of being an international property buyer."
Realtor.com® International delivers U.S. residential listings to buyers across the global, as well as listings from international data providers and up to date information about available properties. As NAR's official property website, Realtor.com® increases exposure of U.S. properties to global markets and helps Realtors® grow their global business.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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WASHINGTON (June 15, 2015) – Commercial real estate markets are improving with Realtors® specializing in commercial real estate reporting an increase in annual gross income, the number of sales transactions and sales volume, according to the 2015 National Association of Realtors® Commercial Member Profile.
The annual study's results represent Realtors®, members of NAR, who conduct all or part of their business in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily and retail buildings, as well as property management.
“After years of slow recovery, the commercial real estate market has shown meaningful growth and our members have seen significant improvements in their business activity,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “Realtors® who practice commercial real estate help build and revitalize communities by facilitating investment in commercial properties that support millions of jobs nationwide. There is every indication that continued improvement to commercial markets with help stimulate economic growth for the rest of the country.”
The profile shows the median gross annual income of commercial members, which has increased steadily for the past five years, was $126,900 in 2014, an increase from $96,200 in 2013. Appraisers and brokers reported the highest annual gross income while sales agents, often newest to the field, reported the lowest. Sixty-seven percent of Realtors® who specialize in commercial real estate reported they derived 50 percent or more of their income from commercial real estate in 2014.
Commercial members completed a median of 11 sales transactions in 2014, up from last year’s median of eight. Six percent reported no sales transactions, down from 9 percent in 2013. The 2014 median sales transaction volume for members who had a Sales transaction was $2,916,700 - a significant increase from $2,554,700 in 2013.
Fifty-nine percent of commercial members are brokers. Licensed sales agents, at 24 percent, represented the next largest segment. A majority of commercial members reported working for a local firm, and 82 percent reported working at least 40 hours a week.
Thirty-two percent of commercial members were involved in international transactions in 2014. Eighteen percent saw an increase in international clients and only 1 percent had a decrease. Broker associates had the most experience with foreign clients with 43 percent reporting an international transaction.
Eighty-three percent of commercial members reported having a leasing transaction. The median transaction leasing volume for members who reported at least one transaction was $500,000 in 2014 – a more than 15 percent increase from 2013. The median dollar value for leasing transactions is heavily influenced by the member’s experience level.
“When it comes to leasing transactions, the report tells us that the more years of experience an agent or broker has the more high value transactions in which they are involved,” said Lawrence Yun, NAR chief economist. “The broad improving leasing trend will continue this year and next because of rising occupancy rates across all commercial property types.”
Commercial members who manage properties typically managed 75,000 total square feet, which represents 20 total spaces. Those who manage offices typically managed 25,000 total square feet, representing eight total offices.
The typical commercial member has been in real estate for 25 years and in commercial real estate for 20 years. The median length of membership in NAR is also 20 years. Additionally, 45 percent of commercial members are also affiliated with one of several commercial organizations including the CCIM Institute, the Institute of Real Estate Management, the Counselors of Real Estate, the Realtors® Land Institute and the Society of Industrial and Office Realtors®.
Commercial members are predominately male with a median age of 60. However, more women continue to enter the profession, as 51 percent of those with two years or less experience are female Seventy percent of Realtors® who specialize in commercial real estate have an education level of a bachelors’ degree or higher. Seventy-eight percent of commercial Realtors® are married, with 13 percent being divorced, and five percent being single and never married.
The 2015 NAR Commercial Member Profile was based on a survey of 1,982 members. Income and transaction data are for 2014, while other data represent member characteristics in 2015. Approximately 350,000 commercial real estate professionals are members of NAR, making it the largest commercial organization in the industry.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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Read more: Realtors® Report Increase in Commercial Transactions, Income and Sales Volume
WASHINGTON (June 3, 2015) – After gradually climbing for three consecutive years, the decline in existing-home sales in 2014 resulted in a slight reduction in Realtor® business activity and income last year, according to the 2015 National Association of Realtors® Member Profile. The survey also found that Realtors® are increasingly more comfortable using multiple communication channels, including social media, to connect and interact with their clients.
Lawrence Yun, NAR chief economist, says business activity for a typical Realtor® was slightly subdued last year because of lower sales and more members. “Existing-home sales didn’t surpass year-over-year levels until October, which is likely the reason the typical member had 11 transactions last year versus 12 in 2013,” he said. “Slightly fewer transactions resulted in the median gross income of a Realtor® falling to $45,800 from $47,700 in 2013.”
Adds Yun, “Despite the modest setback, median gross income last year was still the second highest since the downturn and up over 5 percent from 2012 ($43,500). Furthermore, NAR membership at the end of 2014 stood at 1.1 million, up 5.5 percent from 2013.”
As expected, median gross income and number of transactions generally increase with experience. Last year, Realtors® in business for more than 16 years earned $68,200 and made 13 transactions. On the contrary, those with three-to-five years earned less than half that amount ($37,400) and had 10 transactions. Incomes also varied by license type, as members licensed as brokers in 2014 earned $65,300 ($66,300 in 2013), while the median earnings for sales agents decreased $1,100 from the previous year to $33,900.
According to the survey, a majority of Realtors® (91 percent) report their firm has an online presence and two-thirds have their own personal website – operational for a median of seven years. Sixty-five percent of the respondents use social or professional networking sites – an increase of 4 percent points from 2013 – and 12 percent have a blog.
Realtors® also use a variety of communications methods when interacting with current clients or customers, with 93 percent preferring e-mail, followed by telephone at 91 percent and text messaging at 85 percent.
NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., says the survey’s findings reveal that Realtors® are continuously adapting to consumers’ online and communication preferences to better serve their needs. “To put it in perspective, only 35 percent of Realtors® used social media in 2008, and text messaging was the preferred method of communication among only 40 percent in 2010,” he said. “Attracting potential clients online and communicating with them through various platforms helps Realtors® stay a step ahead – especially as millennials become more active buyers in the years ahead.”
Women represent 58 percent of all Realtors®, accounting for 53 percent of brokers and 63 percent of sales agents. More than three-quarters (77 percent) of all members cite real estate as their only occupation, and 84 percent (82 percent in 2014) are certain they will remain in the business for at least two more years.
Last year continued the recent trend of more new members to NAR. Although median years of experience in real estate remained at 12 years for the second straight year, more members (17 percent) reported they have been in the business for two years or less (13 percent in 2013).
The median age of members inched to 57 years (56 years in 2013), elevated from the 1999 to 2008 range between 51 and 52 years. Two percent of all Realtors® are under 30 years of age, 18 percent are between ages 30 and 44, and 25 percent are 65 and older.
“The slight increase in median age last year is likely another example of the overall national trend of baby boomers delaying retirement and staying in the workforce later than previous generations,” says Yun.
For the seventh consecutive year, the typical Realtor® said they work 40 hours per week. Over half (58 percent) are licensed as sales agents, 26 percent are brokers, 18 percent broker associates and 3 percent appraisers. Sales agents are more likely to primarily specialize in residential brokerage. While only 18 percent of members have personal assistants, the use of personal assistants is more common among more tenured members, broker-owners and managers.
Realtors® are well-educated (50 percent hold a bachelor’s degree or higher), have invested in at least one residential investment property (38 percent), and bring a wide range of expertise and experience to the profession. Only 5 percent began their career in real estate, with the highest share having previous full-time careers in management, business or financial (19 percent) or sales and retail (16 percent).
A majority of NAR members own their own home (85 percent), are married (71 percent), are registered to vote (96 percent) and were born in the U.S. (89 percent). Forty-eight percent of those fluent in other languages speak Spanish (41 percent in 2013).
Regardless of their experience, Realtors® said several factors limited potential clients’ ability to complete a transaction, with finding the right property (33 percent) followed by obtaining a mortgage (26 percent) cited as the two biggest challenges. Only 20 percent said there weren’t any factors limiting their clients’ ability to close.
“According to our data, inventory shortages were prevalent in many parts of the country, all-cash purchases were elevated for most of the year and significant lender overlays and loan processing delays were repeatedly reported by members in our monthly Realtors® Confidence Index,” added Yun. “As a result, it’s no surprise finding the right property for their clients and helping them obtain a mortgage were cited as primary challenges for members and their clients – especially for first-time buyers.”
A majority of NAR members (80 percent) focus on residential sales and 71 percent (73 percent in 2013) have secondary real estate specialties. Of those members with secondary specialties, residential brokerage is the largest at 34 percent. Both relocation and commercial brokerage were next at 17 percent, followed by residential property management at 16 percent. Smaller percentages were also in counseling, land development, commercial property management and international.
As Realtors® gain experience, they also build a client network through referrals of past clients and repeat businesses. Repeat business accounted for a median 20 percent of activity in 2014 and is higher for those with more experience. For members in the business 16 years or more, repeat business was 40 percent of their activity and referrals were an additional 24 percent.
Similar to recent years, firm affiliation and compensation structures for Realtors® remained mostly the same in 2014. Sixty-nine percent of respondents are compensated through a split commission arrangement, 17 percent receive all of the commission and another 4 percent receive a commission plus a share of profits; 11 percent received some other form of compensation. Percentage split-commission was more popular with sales agents (78 percent). Furthermore, members with less experience more often had percentage split-commission arrangements, as well as those who had lower personal earnings.
Eighty-three percent of members work as independent contractors for their firms. The vast majority receive no fringe benefits, although 36 percent (33 percent in 2013) are covered by errors and omissions insurance by their firm. Only 5 percent receive health insurance through their firm – unchanged from a year ago.
Fifty-nine percent of Realtors® are affiliated with an independent firm, and 37 percent are with a franchised company; 4 percent are other. Respondents worked for a firm typically with one office (51 percent) and have been with that firm for five years (six years in 2013). Slightly more (11 percent) Realtors® reported their firm was bought by or merged with another firm compared to in 2013 (9 percent).
The 2015 National Association of Realtors® Member Profile is based on a survey of 180,703 members, which generated 6,750 usable responses, representing an adjusted response rate of 3.7 percent. Survey responses were weighted to be representative of state-level NAR membership. Income and transaction data are for 2014, while other data represent member characteristics in early 2015. The study can be ordered by calling 800-874-6500, or online at www.realtor.org/prodser.nsf/Research. The profile costs $14.95 for NAR members and $149.95 for nonmembers.
The survey’s results are representative of the nation’s Realtors®; members of NAR account for about half of the approximately 2 million active real estate licensees in the U.S.* Many non-member licensees are inactive or part time. Realtors® go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice and committing to continuing education. NAR members also have access to professional resources to better serve their clients’ needs.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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*Data from the Association of Real Estate License Law Officials shows there are approximately 2 million active real estate brokers and sales agents in the U.S. out of nearly 3 million licensees. To be considered active, a licensee generally was involved in at least one real estate transaction in the previous year.
Read more: NAR Member Survey Reveals Slight Dip in Realtor® Business in 2014
CFPB Takes First Steps Toward Greater Clarity on RESPA-TILA Integrated Disclosure Enforcement
WASHINGTON (June 3, 2015) – The following is a statement from National Association of Realtors® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., in response to the Consumer Financial Protection Bureau’s announcement of “sensitivity” to companies making a good-faith effort to comply with the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure regulation.
“The action announced today by the CFPB is a welcome first step toward clarifying the changes coming to real estate closings August 1. NAR appreciates the “sensitivity” offered by the CFPB to companies making a good-faith effort to comply with the new TILA-RESPA Integrated Disclosure regulation.
“NAR will continue to work with the CFPB to minimize any possible market disruptions or uncertainty when the rule takes effect August 1, during the busiest transaction season for real estate.
“Almost 300 U.S. Senators and Representatives asked the CFPB to further develop market certainty through a clarification of the TRID regulation. NAR has long advocated a period of restrained enforcement and liability for the TILA-RESPA Integrated Disclosure rule.
“While NAR appreciates the CFPB’s understanding of the difficulties involved in making a change of this magnitude, we hope that continued dialog with U.S. Senate and House leaders will result in a solution that allows the lending industry and CFPB to address any implementation issues and minimize costly closing delays for home buyers and sellers.
“NAR extends its gratitude to U.S. Reps. Blaine Luetkemeyer, R-Mo.; Andy Barr, R-Ky.; Carolyn Maloney, D-N.Y.; Steven Pearce, R-N.M.; Brad Sherman, D-Calif.; and U.S. Sens. Tim Scott, R-S.C.; and Joe Donnelly, D-Ind., who came together, at our request, to bring this issue to the attention of the CFPB.”
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