Real Estate Industry Is Aging--Fast

The collapse of the housing market is transforming the National Association of Realtors, the professional association of the real estate industry. According to demographic research produced by Nikolai Kolding, a partner in the real estate consulting group REAL Trends, the median age of NAR members is rising rapidly, climbing from 51 to 56 between 2006 and 2011. Behind the aging of NAR is its changing demographics. Not only is total membership shrinking, but the biggest declines are occurring among younger members.

Overall, NAR's membership fell 21 percent between 2006 and 2011, says Kolding, from 1.36 million to 1.07 million. By age group, the changes look like this...

under age 35: -50%
35 to 44: -45%
45 to 54: -32%
55 or older: +4%

Kolding comments: "The industry is very rapidly aging in part due to the fact that younger sales agents appear to be leaving the business in droves....this may be greatly hurting an industry that is trying to relate to an ever-younger pool of potential buyers."

As a profession, the real estate industry is not alone in coping with enormous demographic change as younger adults look elsewhere for economic opportunity. According to unpublished tables from the Bureau of Labor Statistics, the median age of the overall labor force climbed from 40.8 in 2006 to 42.0 in 2010 (the latest data available) because of the aging of the baby-boom generation. Some occupations are aging more rapidly, however, as younger adults shy away from uncertainty. The median age of bookkeepers, for example, climbed from 45.2 to 47.7 between 2006 and 2010. Postmasters aged from 51.5 to 53.5, travel agents from 46.0 to 48.5, and bridge and lock tenders aged by nearly 10 years--from 46.7 to 56.6. Bottom line: The age composition of occupations can change rapidly depending on perceived economic opportunity.

In his monthly newsletter, Kolding offers advice to the real estate industry: "We believe brokers would be well served building the rental and property management businesses to prepare for the growing proportion of the population that will rent rather than buy. Many of the companies we deal with that have strong rental and brokerage units tell us that the rental division often attracts a younger professional who, in time, moves on to the brokerage side. It would seem that expanding your rental business could potentially address two challenges at once."