We All Started @ $0 - 2023 NEFAR Agent Statistics
Over the past few years I have been obsessed with asking big questions and thinking differently. This question and thinking process, when backed by massive action, has led me to open new businesses and meet incredible groups of people with a common mission of building a better life. For me, this is what it is all about: being a lifelong student. Part of this process includes spending a moment reflecting on where I stand amongst others in the same field, as often there are many lessons that come from observing those at a higher level.
Instead of looking at these high performers with envy or through the lens of comparison, I look to those ahead of me to learn where I can improve myself by understanding their strengths, studying their business models, and their thinking. In fact, I want to spend more time with these top performers.
So, one exercise I do annually is review agents from a production standpoint and ask why they are ranked that way. So let’s dig in to my observations of 2023.
Overall, there are approximately 12,000 active realtors in Northeast Florida (according to my friend who also has secondhand information on this stat. If you know the exact numbers, please let me know and I’m happy to update). The data provided here is from MarketView Broker from January 1, 2023 to December 31, 2023. If you have other data, please feel free to share. For the sake of this research, those are my parameters and data sources.
Interesting Statistics to Consider
Here’s some interesting statistics to consider about the agent population for 2023:
3,738 (31.2%) of agents are in active or referral status but did not sell a home in 2023 – this is nearly the same as 2022.
6,176 agents (50.5%) produce at least one sale in the $0-3M sales bucket – this is nearly the same as 2022.
1,625 agents (13.5%) produce between $3-8M in sales – this is down about 500 agents in this bucket from last year
560 agents (4.7%) produce $8M+ in sales – down about 400 agents in this bucket from last year
My Initial Thoughts
First off, these are some incredible statistics with the 80/20 rule clearly at play. To me, this means that 75.4% of agents do not produce enough income for real estate to be a full-time job (or are doing it part-time).
For example, even if we assume that these agents sell $2M (which they don’t) and have a 3.0% average commission (which is often lower), the maximum revenue they can bring in is $60,000 (+/- transaction fees). Though, out of that money, let’s assume they must pay their brokerage 30% in splits along with their licensing, marketing, gas, etc. It’s very likely that this level of production nets less than $35,000 and that income is then taxed. Now for some people this level of income may be great, though for most who are looking to make a business out of real estate and live a big life with real estate funding their life, this isn’t so great. It just depends on your situation and there's no judgement. Our goal is to help agents get from point A to point B, regardless of where they are today.
We all started at zero.
My Takeaways
If you want to become a top performer, you have VERY little competition, except for yourself.
The Top 20% of agents produce 75% of the total production in the marketplace. The top 10% of agents produce 54% of the total production in the marketplace.
There is no one agent or even one brokerage with market saturation (more than 30% share). The market is very fragmented. When I was a producing top agent selling 60+ homes for years, I rarely ever ran into the same agent twice. This is true for most agents, even in similar geographic locations.
There is a huge opportunity for rainmakers who can create lead opportunities to employ this 75.4% of the agent population that appears to not have enough work. While other industries have a labor shortage, real estate agents have an incredible labor supply of agents looking for business. If you’re building a team, you have many agents you can interview to find the hungry ones who fit your culture.
The middle 60% of agents are living on the roller coaster of sales, with their number of sales going up and down throughout the year, based on seasonality and their personal efforts. I personally call this subgroup the messy middle. These agents are one phone call away from being out of income (i.e. a deal falling through).
Thus, to me, it looks like this:
For approximately 75% of agents, the primary conversation that matters is how to consistently generate business opportunities.
For approximately 18% of agents, the primary conversation is how to build systems and models so they can scale.
For approximately 8% of agents, the most important conversation is “what got me here, won’t get me there” by giving up control, sourcing and training talent, and becoming a leader. These agents are the ones who are evolving from being self-employed to becoming a business owner. These agents start to get their time back while sustaining their income and growing their wealth. At the $8M+ production level, that’s where the magic happens financially for most of the agents we observe.
To become a top performer, consider reading my prior post about the similarities amongst the top performers.
If you have any questions, feel free to comment or email me: jon@movewithmomentum.com.
