Highlights:
- Median Denver real estate agent income $63,300
- Agent pay metric analyzed by SmartAsset.
- SmartAsset ranked best cities to be a real estate agent.
It pays to be a real estate agent in Denver.
A national report claims the median income of a real estate agent in Denver is $63,300, the third highest in the nation.
Surprisingly, Denver agents aren’t topped by agents selling homes with nosebleed prices in San Francisco or New York City. Rather, the top two cities for agents, respectively are Albany, New York, at $79,720 and Montgomery, Alabama, at $78,560.
At least that is according to New York-based SmartAsset, a technology company launched in 2012.
One possible reason that incomes aren’t higher in ultra-expensive markets is because so many people are entering the industry, diluting the overall incomes.
“As a financial technology company, we like to just crunch the numbers then let others interpret the results,” said Jeremy Bennett of SmartAsset.
“But, high entry into the job market in large cities is a great assumption you’ve made,” he added.
Kirby Slunaker, CEO and president of REcolorado, said he has no idea if the $63,300 is correct or even in the ballpark.
“I don’t know,” Slunaker said. “I wish I had a better insight. But GCI (gross commission income) is not something that we track or is disclosed.”
However, he didn’t think many Realtors would survive in the business making $63,000 in the Bay area in Northern California.
“When you look at the price of homes in San Francisco or Palo Alto, good luck in trying to make it on $63,000,” Slunaker said.
One back-of-envelope way to get an idea of gross commission income, is that in the first seven months of the year, Realtors in the Denver area sold a record $11.45 billion in homes, according to the Denver Metro Association of Realtors.
If the average commission was 5.2 percent, that equates to $595.5 million paid in commissions so far this year. With an estimated 16,000 active Realtors in the Denver area, that would equate to an average gross commission income of $36,875 per Realtor, for the first seven months of the year.
SmartAsset based its numbers on data from the Bureau of Labor Statistics. To earn the $63,300, the typical agent in Denver sold seven homes a year, according to SmartAsset.
Overall, SmartAsset ranked Denver No. 3 in the nation as far as the “best cities to be a real estate agent.”
Only Reno, Nevada, and Lincoln, Nebraska, which were No. 1 and No. 2, respectively, bested Denver.
In 2014, SmartAsset ranked Denver No. 8.
SmartAsset ranked cities on four metrics:
- Annual sales per agent;
- Median annual income;
- Turnover rate, which is the percent of homes in a city sold in one year;
- And price appreciation.
SmartAsset than totaled the scores from zero to 100 for each of the 113 cities in its study. Denver had an index score of 92.4.
SmartAsset cited data by the National Association of Realtors that showed home prices rose by 17.2 percent in Denver. That was in the first quarter compared with the first quarter of 2014.
The turnover rate in Denver was 7.98 percent, according to SmartAsset.
Colorado Springs also made the list at No. 19.
In Colorado Springs, the typical agent handles 13 transactions annually, for a median annual income of $45,520, according to SmartAsset.
SmartAsset is backed by investors including Y Combinator, Javelin Venture Partners, North Bridge Venture Partners, Quotidian Ventures and Peterson Ventures.
A link for the study can be found at SmartAsset.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com.DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.
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