How the Gold Rush of New CRE Agents Flooding the Market Impacts You
Last week, I read with great interest Mark Heschmeyer’s article Gold Rush: Swelling Numbers of CRE Brokers Making for Tougher Competition in the Ranks Long-Running CRE Recovery Attracts Younger Brokers; Spurs Larger Firms Expand into Smaller Markets.
Mr. Heschmeyer addressed, based on the NAR 2016 Commercial Member Profile, the number of new agents joining the ranks of commercial real estate professionals. In fact, as cited in the article, the number of those with less than 2 years of experience have almost doubled as a percentage of total commercial members (9% in 2015 compared to 5% in 2014).
While I expanded on the commercial compensation elements of this article in my blog earlier this week, it is no surprise that this influx of new agents also resulted in a decrease of average compensation of commercial real estate practitioners – the median gross annual income for commercial members in 2015 was $108,800, down from $126,900 in 2014. Note the median gross annual income from 2006 was $115,600. Thus average earnings growth has been basically stagnant over the past 10 years.
More importantly is the shared data that there are approximately 80,000 commercial practitioners in the market today. If you recall, back in 2007, the number of commercial real estate professionals was estimated at 100,000 to 120,000. Then as of 2009, the mass exodus of commercial real estate professionals resulted in a significant reduction in the number of CRE professionals to an estimated 50,000 to 60,000. Even with this gold rush of new agents, we are still far from our high number of 2007.
So what does this all mean to you? Click the button below to read more.