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1 Market overview
1.1 Definition and presentation
Real Estate Agencies are intermediaries in the housing market which facilitate the reconciliation between supply and demand. Real estate agents oversee negotiations between sellers and buyers or owners and tenants with the primary goal of erasing asymmetry and enable market equilibrium.
Real estate agencies act for two types of clients:
- Residential customers: the majority of real estate agencies are dedicated to individuals looking to buy or rent houses, land or garages in urban and rural areas.
- Commercial customers: a minority (less than 10%) of real estate agents are focused on the search and match of commercial real estate - offices, industrial land, factories and warehouses or shops.
In 2018, Asia Pacific accounted for 54% of the global market. North America was the second largest region accounting for 23%. Revenues for Real Estate Agencies, or Realtors, come from fees, which hoover around 6% in the US. [WashingtonPost] This fee is highly dependent on real estate transactions; the US Government reports that since 2015 transactions have been declining.
The US market is highly fragmented; the role of independent real estate agents is gradually decreasing in favor of franchises, which are better distributed and more visible. Moreover, margins are under constant pressure; online property companies charge a fee for Real Estate Agents to list their properties online.
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the real estate agency market | United States
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