PHILADELPHIA - As a real estate agent, how much money can you expect to make in 2023? Here are a few predictions for the profession: Home-price growth will drop to 4% in 2023, commission splits between the buyer and listing agent, and job security.
The Average Salary For A Real Estate Agent In 2023
The average salary of a real estate agent in 2023 will be $91,000, up from $82,000 in 2018. Agents with one to three years of experience earned an average of $82,077 yearly. Those with more than 25 years of experience earned an average of $156,237 yearly.
The salary of a real estate agent is directly correlated to their level of performance. However, entry-level agents can earn as little as $44,000. Your salary will likely be higher if you're in the luxury real estate market.
Home-price Growth Will Drop To 4% In 2023
In the coming years, Fannie Mae predicts that home-price growth will slow. The average annual growth rate for homes will reach only 4.4% in the second quarter of 2023 and fall to 2.9% by the end of the year. This is less than half the rate seen before the housing bubble collapsed. If that trend continues, the 2023 real estate market may crash.
As a result of higher interest rates and the weakening economy, demand for housing will slow. For home-price growth to slow, the housing supply must rise. But that's unlikely to happen. While home-price growth will slow, it won't stop. It will continue to grow in some markets and will moderate in others.
Commission Splits Between The Listing Agent And Buyer's Agent
Commission splits between the buyers, and listing agents are changing. While the average commission split is 50/50, it can vary. Some agents offer 2.5% to the buyer's agent and keep the remaining 3.5%. A more complicated split might be a 60/40 split or an 85/15 split. The key is to find a split that works best for the seller and buyer.
Real estate commissions vary widely. Some are split among fewer agents, while others are split among four parties. For example, a three-bedroom home could yield a 60/40 commission split. That would give the buyer's agent a total of $10,500 and the listing agent $7,200.
Job Security For Real Estate Agents
The job security of real estate agents is extremely tenuous. Oxford University's report examining 700 occupations found that real estate agents will be among those whose job security is most at risk due to AI. The National Association of Realtors, or NAR, was founded in 1908 with 120 members. By 2021, the organization will have 1.4M members. While today's home buyers and sellers can do without real estate agents, the future of this profession may be uncertain.
In the future, job security for real estate agents will be even less certain than it is today. With technology disrupting the global workforce, real estate agents must be on their toes to stay competitive. In the future, the fastest and most responsive agents will be the most sought-after.