Value of Fees Received by Brokers Jumped in April by the Largest Percentage in Eight Years as Home Sales and Prices Rise
By The Wall Street Journal
Residential real-estate brokers and agents—among the hardest hit during the housing bust—are seeing their compensation rise at the fastest pace in nearly a decade as home sales and prices pick up.
The dollar value of commissions received by real-estate agents per transaction jumped 2.7% in April from the prior month, as measured by changes in the producer-price index. That is the largest monthly gain in eight years and the third-largest monthly gain in the 17 years that the PPI has tracked real-estate commissions. Year over year, commissions per transaction were up 9.1% in April, the largest annual gain since August 2005.
With Realtors’ fortunes improving, investors have bid up the stock prices of real-estate-services companies. Shares of Realogy Holdings Corp., RLGY -1.47% the nation’s largest real-estate brokerage firm that includes Coldwell Banker, Century 21 and Corcoran, have climbed 79% from their initial pricing at the company’s IPO in October. On Tuesday, shares closed at $48.46, down 3.5% from Monday’s close.
While commission rates for Realogy’s brokers have held steady at around 5% per transaction, the average sale price of homes handled by brokerages franchised by Realogy jumped 7.7% between 2011 and 2012. Over the same period, Realogy’s annual revenue increased 14%, to $4.7 billion.
