How has the business of real estate changed over the last 15 years? The numbers show that national house prices and agent salaries are both increasing faster than the inflation rate*. Take a look at these differences from 1999 to 2014.

By: Mary Gramer, Social Media Marketing Intern

Flickr Creative Commons: Ken Teegardin

1.House Prices (census.gov & RealEstateabc.com)

• Then: Median home price =  $161,000.
• Now: Median home price = $241,500.

This is a whopping 66.67% increase in average price over the past 15 years.

How do we account for the fact that house prices have increased faster than the inflation rate? Home buyers’ tastes change with time. People now prefer to buy larger homes with high-end fixtures, which is different than 15 years ago. In fact, according to the US Census, the median home size has increased from 2028 sq. ft. in 1999 to 2453 sq. ft. in 2014. As a result, homes being sold today are priced relatively higher than they were 15 years ago.

2. Real Estate Agents (Bls.gov)

• Then: 55,010 employed real estate agents who made an average of $35,600 per year.
• Now 157,660 employed real estate agents, who made an average of $55,530.

Real estate agents’ salaries increased by 55.98% in the past 15 years.

Agents’ wages increased more since 1999 relative to inflation, but not as much as home prices. Why is this? Well, the increase in average home price can account for the increase in salary for real estate agents, who earn a percentage of the sale. However, the pay increase does not quite match the increase in home price, and that’s because there are nearly 3 times the amount of real estate agents than there were 15 years ago.

Could it be that real estate agents are selling less homes every year than in they did in 1999, but the homes they are selling are worth more? Or are agents taking a smaller percentage of the sale? Let us know your thoughts on this data!

*According to usinflationcalculator.com/, inflation from 1999 to 2014 was 42.1%

All photos used under this license.