As the NAR Profile of Real Estate Firms was released, we’ve been able to learn what challenges real estate brokerages face in 2023. While the majority of brokers have optimistic expectations towards the new season, they are also increasingly aware that the industry at large is getting more competitive than ever.
Let’s have a closer look at what the biggest challenges for the real estate brokerages are expected to be.
Top 10 challenges for real estate brokerages in 2023
1. Keeping up with technology
As technology keeps evolving, agents struggle to figure out what works for them and implement the new tech efficiently. This includes having great systems to manage websites, inventory, leads and contracts as well as new marketing tools to promote listings.
2. Maintaining sufficient inventory
Low inventory and high prices have been affecting a lot of markets recently and have been one of the major challenges for real estate brokerages. Inevitably, this led to fewer transactions closed throughout the year.
3. Competition from non-traditional and traditional brick and mortar firms
Despite any difficulties agents are facing from season to season, real estate still remains a lucrative industry. And that means the local competition is as tough as ever. However, today’s brokerages are also competing in another, online, venue. Additionally, 50% of brokers say they expect non-traditional competition to grow as well.
Even with all the challenges in mind, most brokerages are optimistic about profitability in the upcoming season. 62% expect profitability to improve which creates more opportunities for adopting new technologies and hiring talented staff.
5. Local or regional economic conditions
Local markets and inventory directly affect real estate businesses. These trends can be quite different nationwide. Development and sustainability of local areas are obviously a cause for concern for agents as they dictate how they would market the local lifestyle and properties.
6. Recruiting younger agents
32% of brokers say they would like to hire more younger agents to connect with millennial homebuyers better. This is not to mention that 32% of brokers are concerned with the way millennials view homeownership and how that would affect the real estate markets for years to come.
7. Competition from new virtual firms
Innovative virtual firms and property portals that spring up permanently reshape the real estate industry. Even experienced brokers find it hard to compete with them as these new firms have cutting-edge technology that puts them ahead of the competition.
8. Agent retention
Agents want to work for brokerages that can empower them with good technology to make daily sales and marketing work easier. This includes a reliable real estate CRM, marketing automation, sales software and training. Brokers that fail to provide these see their best talent fleeing them to join better-equipped brokerages.
9. Protecting client data
Having reliable systems working behind the scenes is crucial in the age of high cybersecurity risks. In order not to compromise their own business data and client data, agents say implementing good systems is one of the major challenges for real estate brokerages today.
Here’s a recap of profile from NAR back in 2017 as a comparison.