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Top 1% of real estate agents make up 15% of home sales
BatchService, a property intelligence and technology company, calculated the share of home sales made up by top agents.
Lance Lambert
June 24, 2024
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The elevated mortgage rate environment is proving particularly challenging for small players and newcomers in the housing sector. Many smaller mortgage shops are going under, and many small builders are losing market share to deep-pocketed big builders with their own in-house mortgage arms. And, many newbie "pandemic agents" are walking away, realizing that 2021 was an anomaly.
Yet despite the spike in mortgage rates many of the top real estate agents are not only holding market share but taking it.
Indeed, according to a custom analysis that BatchService, a fast-growing property intelligence and technology company, did for ResiClub, the top 1% of real estate agents over the past 12 months made up a staggering 15% of U.S. home sales.
In states like Florida and Texas, the top 1% of real estate agents made up 23% and 19%, respectively, of home sales, according to BatchService.
Why do top agents hold so much market share?
Skill level: Many top agents typically have more experience and have honed their skills over many years, making them more effective at closing deals.
Market knowledge: Many have deep knowledge of their local market, trends, and pricing.
Networks: Top agents often have extensive networks of contacts, including other agents, lenders, contractors, and potential buyers or sellers.
Repeat clients and referrals: They often have a large base of repeat clients and receive numerous referrals, leading to a steady stream of business.
Marketing power/brand recognition: High-performing real estate agents typically invest in advanced marketing tools and strategies, such as professional photography, staging, online marketing, and social media campaigns. They often work with well-known agencies or have established personal brands that attract clients.
Why should homebuyers, sellers, and investors care?
Often top agents have access to more listings, including off-market properties, giving buyers more options.
Experienced agents with market share often help negotiate better deals, potentially saving buyers/sellers/investors money. It varies, of course.
On Monday, Bank of America published its revised out for national home prices:
+4.5% in 2024
+5.0% in 2025
+0.5% in 2026
“Our outlook for slower home price appreciation [by 2026] is based on two assumptions.
First, as noted above, home prices have already overshot their long-run fundamental value based on real disposable personal income per capita. Although smaller in magnitude than the overshoot observed in the housing boom, it is similar in size to that seen in the two prior overshoots in the late 1970s and 1980s. It is reasonable to think that it will be more difficult for home prices to continue to overshoot personal income in an environment where we expect employment and labor market income growth to moderate.
Second, our outlook for the US economy calls for continued normalization as the effects of the pandemic move further into the rearview mirror. With each passing quarter it becomes clearer that the shift in relative demand for goods and services is normalizing, whether that is in terms of the share of goods and services in consumption, the production of goods and services, and employment in goods-producing and services-providing sectors. We think the effects of the pandemic on the cyclical performance of the US economy are likely to be completed by the end of 2025.
If so, the elimination of pandemic effects means less home price appreciation. By our estimate, the pandemic-induced shift in relative demand toward housing in lower-density areas where single family home dominate the landscape was worth about 6pp of home price appreciation annually since 2020. In other words, of the roughly 60% appreciation in the S&P CoreLogic Case-Shiller Home Price Index that we project between 4Q 2019 and 4Q 2025, about a third can be traced to the pandemic”
Nothing in this newsletter is investment advice. Please do your own research.