Question: What is 54 years old, white, female, went to college, has ten years experience, works about forty hours a week, and earned a little under $38,000 last year?

Answer: The typical Realtor®.

These and other data are to be gleaned from the 2009 Membership Profile of the National Association of Realtors® (NAR). (Income figures in the survey are based on 2008 numbers.) Slightly less than 100,000 of NAR's 1.2 million members were surveyed. (There are about 2 million people actively engaged in the real estate business overall.) The response rate was 8.2%.

It is no surprise that survey results showed that median income was down. At $36,700, it declined about 14% from 2007. The median number of transactions dropped from eight transaction sides to seven. These figures pretty well tracked the drop in volume and prices in the real estate market throughout the country.

Nor should it be a surprise that years of experience and hours worked were proportional to income differences. The median income of those with only two years in the business was only $8,600. For Realtors® who had been in the business for more than sixteen years, the median income was $53,900. Ten percent of that cohort reported an income of at least $200,000. Experience isn't the only relevant factor; hours of work is important too. Among those who reported working twenty hours or less per week, the median income was $8,200. For those who reported working sixty or more hours, it was $74,000.

Part of the reason that years of experience correlates with increasing income is that those who have been in the business for some time receive an increasingly larger percentage of business from referrals. Newcomers only have about one percent of business from referrals; those with more than sixteen years have about twenty-three percent. Of course there is some “self-selection” here. People who have stayed in the business for a while are the ones who do it better, and therefore receive more referral business. That partially explains why the median age of Realtors® has increased by a couple of years.

When one looks at the typical income numbers, it is natural to ask, “How can they get by on such a (relatively) low annual income?” The answer to this is that, for many Realtors®, their income from the real estate business is neither the sole nor the primary household income. While about three-fourths of those surveyed said that real estate was their only occupation, fewer than half said that real estate was the primary source of their household income.

Many might be surprised by the apparent role of education and specialized training among the more financial successful Realtors®. Fifty-four percent of those earning more than $150,000 annually have at least one professional designation. Sixty-three percent of them hold a bachelor's degree or higher. (Overall, twelve percent of Realtors® hold a graduate degree, twenty-eight percent a bachelor's.)

Forty percent of respondents had participated in a transaction that involved a foreclosed property, but only about one in seven had been involved in a short sale. We all know that the market has been down. But why, especially given low interest rates, should it be down? Respondents were queried as to what were the most limiting factors keeping their clients from completing a transaction. Thirty-five percent cited the expectation that prices were likely to fall further. Another twenty-five percent had difficulty obtaining mortgage financing. Until those perceptions and realities go away, we can expect the trends shown here to continue.