Increasing the number of young people in real estate has been a longstanding goal of the industry, so it’s good news that the median age of REALTORS® dropped this year. It’s now at 53, down from 57 last year. What’s driving the decrease are two trends: an increase in REALTORS® under 30, and a drop in REALTORS® over 65.
The flip side to having younger people is a decline in experience. Twenty percent of REALTORS® haven’t been in the business a year, and a third have been in it less than three years. As a result, median income is down, even though sales are up. That’s because newer REALTORS® tend to make less money. But that money isn’t disappearing; older, more experienced REALTORS® are seeing their income go up.
These changes are a top story in the latest Voice for Real Estate, which also looks at what the rise of younger buyers means to the industry. Millennials now make up the largest group of homebuyers—about a third—and they have particular cities they like. NAR has just released an analysis of the 10 metro areas that they like the most. Some of these metros you can probably guess, because they’ve long tended to attract young people. Denver, Seattle, Austin, Texas, and Washington, D.C. Some you might not have thought of include Salt lake City, Ogden, Utah, and Charleston, S.C. Rounding out the list are Raleigh, N,C., Portland, Ore., and Minneapolis.
What’s common among all these metros is strong job growth and relative affordability. They also have a lot of millennials already buying, selling, and renting.
The video also provides an update on a problem NAR has been trying to get ahead of for several years: patent trolls. The association just filed a petition with the U.S. Patent and Trademark Office challenging the validity of the claims a company has been making for technology that NAR believes is widely available and not warranting patent protection. The company says its patent entitles it to receive money whenever a real estate brokerage sends out an email alerting its customers to new listings or to changes in its listing details. But NAR says its just “ordinary, garden variety” technology that everybody uses.
The petition asks the federal government to look into whether the patent claims are valid.
The video also looks at an upcoming rule that NAR is afraid will dampen the availability of commercial real estate loans. The rule is a part of the “qualified mortgage” concept in the Dodd-Frank banking reform law enacted in 2010 and it would require lenders to retain 5 percent of the value for loans they package into securities for sale to investors. NAR says loans packaged into commercial mortgage backed securities (CMBS) should be expect from the 5 percent risk retention requirement, and the House Financial Services Committee agrees. It passed a bill that would exempt the loans. Now NAR is educating other members of the House and senators with the goal of getting a change enacted before the rule takes effect at the end of this year.
The video looks at a big hike in signed contracts, too. Signed contracts jumped to their highest level in 10 years in April, and closed sales increased, too. These developments are good news for markets, and NAR Chief Economist Lawrence Yun says it’s simply strong economic fundamentals—good job growth and low mortgage rates—that’s driving the increase.
Watch the Voice for real Estate.