Realtor Population Explosion

In 2002 The North Carolina Association of Realtor (NCAR) reported over 26,000 members. That grew in 2005 to over 32,000 members, in 2006 to over 38,000 members and currently in 2007 a claimed membership of over 42,000. That is the equivalent of an annual growth rate of 10% per year since 2002 and a growth rate of 15% per year for the last two years. NCAR criticisms of the growth in public services due to population growth don’t seem to apply to their own organization.

That growth rate is faster than increases in population or economic growth in North Carolina. NCAR bemoans the modest take-home pay of individual realtors. It is becoming clearer that too many individual realtors are getting a smaller and smaller slice of the pie even as the pie has been growing. Home values have risen faster than consumer inflation as real estate commissions have remained steady. Homeowners are paying out more dollars now for the same transactions made 5 years ago even when adjusted for consumer inflation.

It is clear that the large sums of money involved in real estate transactions, where property values are rising, are attracting a lot of people to the business. Individual realtors may be seeing a decline in income because there is more competition. More competition has not led to a substantial lowering of cost for consumers because of NCAR’s strong hold on the market and, it seems, on legislators. NCAR now has a large base of nervous realtors ready to part with PAC money to shore up the monopolistic hold on the real estate business.

Update: For more on individual realtor income read our later post: Ethics Schmetics