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Real estate industry stats, vs. common poor research

Posted 06-30-2020 at 05:35 AM by MikeJaquish


I so often see people contending that Zillow, among others, will kill real estate brokerage by agents and REALTORS.
Often citing poorly researched stats to support that contention.
An example from the CD Real Estate Forum:
https://www.city-data.com/forum/58512142-post30.html

Quote:
Originally Posted by MikeJaquish View Post
I believe your REALTOR head count is in error.
1.38 million as of May, 2019. https://www.nar.realtor/membership/monthly-report

I believe your transaction data is hugely erroneous, and under-researched.

Between those two significant errors, it is obvious your statistical presentation is flawed beyond value.

New home sales, 2019: 683,000
https://tradingeconomics.com/united-...new-home-sales
Even when the buyer does not have an agent, most tract builders, and many custom spec builders are represented by licensed employees who often are also REALTORs.
Each transaction MAY have two agents, creating 1,366,000 potential agent transactions.
How did you account for new home construction sales by REALTORs?

Existing Home Sales, 2019: 5.33 million
https://tradingeconomics.com/united-...ing-home-sales
Each transaction MAY have two agents, creating 10,660,000 potential agent transactions.

10,660,000 + 1,366,000 = 12,026,000 potential sales transactions.

What info did you use to reduce that figure to 5.5 million?

Rentals.
Home ownership in the U.S. hovers in the 63%--65% range. I.e., a third of residents are renters.
https://tradingeconomics.com/united-...ownership-rate
How many units did you allow for property management/rental transactions in your 5.5 million figure?
30% to 40% of U.S. residents are renters, and the most common leases are 12 months. I.e., did you allow for REALTOR-assisted property rentals, renter moves, or lease renewals as transactions?
In most states, property management requires a real estate license, and many property managers are also REALTORs.
How do your figures account for the full time property managers?

Commercial REALTORs.
Do your 2mm/1.4 million take them into account, and also their sales and leasing transactions?

Land specialists.
Brokering land sales is big business, for residential and commercial agents. Some only work land. Some work residential and/or commercial also.
How do your sales figures account for land sales by REALTORs?

Many licensees and REALTORs never intend to sell property at all.

They may be licensed assistants in offices or on teams. They may be property managers who only handle rentals and leasing. They may be home inspectors, appraisers, pest control operators, all who need MLS access and/or data to do their jobs.
How do your figures adjust for these facts?

Churn/burn industry.
A huge percentage of licensees never renew past the first or second year, when they realize the realities of making a living from a standing start.
How do you adjust your stats for that annual turnover when calculating sales per REALTOR?

Zillow....
LOL Lawdy, Lawdy.
Yes. Premier Agents advertising revenue, DotLoop revenue and data-skimming for resale have helped keep Zillow afloat.
Since going public in 2015, Zillow has never presented a credible path to sustainable profit.
They HAVE managed to incinerate over a billion dollars of investment capital, whilst insiders, including the people you mention above, have successfully stripped out over $800 million in stock-based compensation + salaries and benefits.
Unless Z can slow the bleeding, I predict they will issue more stock by the end of next year, diluting their stockholders value. The insiders will likely mostly cash out before that happens.
And, the insiders still hold 12% of the float. Anxiously waiting for that next window of opportunity to cash out?
Such a role model for change!!
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