Commissions Reach 9-Year Peak
Real estate commissions today are at the highest point since 2001, according to Bloomberg News Service, which combed through statistics from the NATIONAL ASSOCIATION of REALTORS® and Real Trends Inc. to get its results. Total commissions through November 2009 reached $40.6 billion, and the average payout for the year was 5.29 percent.
Agent pay initially begin its descent at the turn of the decade, when the housing market was first taking off. Brokers offered concessions in order to get listings, and discount brokerages cropped up to cash in on the sellers’ market.
However, once the housing bubble burst in 2006 and property owners found it more difficult to unload their homes, commissions resumed an upward pattern and have remained on that trajectory for the past four years.
Higher commissions and more sales should not be equated with greater profit at brokerages, though. Brokerage income has been eroded by home-price declines as well as more interest in the lower end of the market due to 2009’s first-time home buyer tax credit.
Source: United Press International, Steve Cook (01/10/10)
REALTOR® Magazine-Daily News