How many Boston real estate agents are too many?
The number of Boston condo and rental agents peaked last year, or maybe not it is hard to tell. The number of Boston condo sales started to decline last year and has continued on a downward trajectory.
The media has reported layoffs for the large real estate companies (Compass, Redfin) and in real estate technology companies. Some of these large companies like Compass may have over done their expectations, and as a result closed offices and had large layoffs/
Our economic system is based on continuous growth, which isn’t sustainable for any industry.
Some real estate agents have moved on into different industries to make a living.
You might say there is a recession or a depression in real estate workers, reminding me of the housing market crash and the great recession. Some real estate agents retired early and others found jobs while the rest of us slogged through a down market. As home prices went down so did commissions which are often based upon the sale price of a Boston condo for sale.
This is a good time for Boston condo buyers and even apartment renters to negotiate the best rates when working with real estate agents. When choosing an agent choose one with experience. New agents tend to charge as much as experienced agents charge. Always ask if they have ever sold a Boston condo before or how many condominiums they have sold in the last 12 months.
Often new agents don’t know what it is they don’t know and do not ask for help. As independent contractors agents do not get a lot of supervision.
It is true we all need to start somewhere and most new agents will get experience from working with friends and relatives and maybe a neighbor or two.
According to the National Association of Realtors, 87% of real estate agents fail within the first five years. Often the agents who fail do not make enough money to pay their personal bills and business expenses. Most real estate agents work on a 100% commission basis and only get paid after a successful closing.
We have five times as many realtors as we need, and the market has never been so competitive. Any advertising that would help consumers differentiate between agents would be the most helpful and pertinent information possible.
But hey, these guys are just trying to drive traffic to their website:
Thanks to the readers who sent in the recent WSJ article that mentioned that the national inventory is so bleak that there are more realtors than homes for sale (1.04 million homes vs 1.45 million realtors).
Original Boston Real Estate Blog Post
Number of Real Estate Agents in the U.S.
According to the National Association of Realtors 2018 Member Report, there are 1.3 million Realtors in the United States, up from 1.22 million in their 2017 report, an increase of 6%. Typically speaking when the real estate market is strong, there are more real estate agents, and when the market softens, membership decreases. Real estate agents must obtain a license through a local state agency that provides oversight and requires education and testing. In order to maintain their real estate license, agents must also complete continuing education and keep their license in good standing with their state.
Average Massachusetts Salary
Average Real Estate Agent Yearly Salary in Massachusetts. Real Estate Agents earn an average yearly salary of $66,174. Salaries typically start from $27,258 and go up to $139,679.
Number of real estate brokerage firms in Boston
It turns out that it doesn’t just feel like there are a lot of brokerages in Boston; there are a lot of real estate brokerages in Boston. In fact, Boston has 480 licensed real estate brokerages – 800% more than the next city (Cambridge, which happens to be right next door).
Total Real Estate Brokerages by City
- Boston 480
- Cambridge 60
- Quincy 54
- Newton 49
- Worcester 45
- Brookline 44
- Brockton 35
- Waltham 34
- Framingham 33
- Somerville 33
That’s so many brokerages that the City of Boston has an average of 10 brokerages for every square mile of land.
Keep in mind that Boston isn’t even the largest city in Massachusetts by landmass. It’s #2 in the State after Barnstable, and other cities like Taunton and Westfield have nearly the same land area as Boston, but none of them rank in the top 10 (or even the top 20) for a total number of real estate brokerages. Compared to any other town or city in Massachusetts, Boston is absolutely packed with real estate brokerages.
Plus, look at the towns on that top 10 list. We might as well re-label it, “Cities in the Greater Boston Area.” The T or the commuter rail visits every town and city on this list, many of which also have a high number of real estate brokerages per square mile. So even when you leave Boston proper, you’re still surrounded by real estate brokerages. Cambridge, for instance, has 9.38 brokerages per square mile, and it’s right across the Charles River from Boston.
This helps explain why it feels like there are so many real estate agents in Boston: there are far more brokerages stuffed into the city of Boston than other comparably sized cities, which means lots of job opportunities for licensed agents. That kind of hiring climate makes getting your real estate license a no-brainer if you’re interested in real estate.
The data also shows that real estate brokerages in Boston tend to cluster in certain areas (most notably Newbury Street in the Back Bay, and Commonwealth Avenue in Allston/Brighton). This means that, for some parts of the city, the number of brokerages per square mile is actually much higher than the average. The map below shows the location of each licensed brokerage in Boston, illustrating this distribution:
2. Boston has way more real estate agents than any other town or city in Massachusetts
Seriously, it’s not even close. Boston’s high density of real estate offices means lots of opportunities for agents, so it not surprising that Boston is home to 5,628 individual real estate agents. The next closest city (Quincy) is home to only 934. In fact, if we rank each town and city in Massachusetts by how many real estate agents call it home, we end up with the following top 10:
Total Real Estate Agents by City
- Boston 5,628
- Quincy 934
- Worcester 782
- Cambridge 726
- Brookline 640
- Plymouth 637
- Medford 599
- Waltham 556
- Framingham 537
- Newton 529
Boston absolutely dominates this list! Its real estate agent population is more than 600% larger than the next largest agent population. That said, there’s something surprising about Boston’s agent population compared to other towns and cities (keep reading below to find out what).
3. But Boston doesn’t come close to having the most agents per capita.
The fact that Boston is home to Massachusetts’ largest population of real estate agents might not be that surprising: after all, Boston has a population that’s nearly six times larger than the next most populous city in the state (Worcester), and Boston has far more real estate brokerages than other comparably sized cities. So what happens if we control for population and look at the number of real estate agents per capita for each municipality in Massachusetts, rather than the raw number of agents?
Remarkably, we discover that Boston doesn’t rank anywhere in the top 10 list for agents per capita.
The distinction for the most real estate agents per capita goes to the Town of Chilmark on Martha’s Vineyard, where a whopping 1 out of 24 people has a real estate license. The Town of Nantucket comes in a close second, with 1 out of 30 residents holding a real estate license.
Boston, by comparison, doesn’t come near these numbers: only 1 out of every 119 people in Boston has a real estate license. While there may be a lot of real estate agents in the city, there actually aren’t nearly as many as you’d expect based on how much larger Boston’s population is compared to other cities in the state. This is doubly true when you account for the number of brokerages in Boston.
Boston’s agents per capita statistic is probably why a career change to real estate is so common among city professionals looking to escape the 9 to 5 grind: the per capita supply of real estate agents in Boston isn’t large enough to satiate the hiring appetite of local real estate brokerages, so real estate jobs are easy to come by. Not a bad problem to have if you’re an agent (though competition for new hires presents a real challenge if you own a brokerage!).
Here are the 10 towns in Massachusetts that have the most real estate agents per 100 residents:
Number of Real Estate Agents (Per 100 Residents)
- Chilmark 4.27
- Nantucket 3.3
- Cohasset 2.44
- Nahant 2.43
- Dover 2.43
- Lynnfield 2.37
- Orleans 2.28
- Weston 2.24
- Wellfleet 2.18
- Hingham 2.14
Interestingly, 50% of these towns are located in resort or vacation areas (Martha’s Vineyard, Nantucket, or Cape Cod). Keep in mind that this list reflects where the agents live – these aren’t necessarily the towns where they work. This means that real estate is a popular career choice among the residents of resort communities, which makes sense: a desk job isn’t very appealing when you live by the beach.
Oh, and in case you’ve been wondering where real estate agents live besides beach towns, here’s every agent in Massachusetts mapped out, based on the home addresses they reported to the Board of Real Estate: