A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Tuesday, May 31, 2005

Real Estate Agents vs. Houses Sold - You do the Math

Alex at Marginal Revolution has an interesting post about the number of real estate agents in California. Here's a quote I thought was interesting:

There are 437,000 agents in California, enough to form the state's eighth-largest city. With only 680,000 home sales a year, competition for listings can be savage.

Let's think about that for a minute. Using those numbers, each agent gets 1.5 sales per YEAR! Of course, the median home price is somewhere around $500,000 in California, so each agent would make somewhere around $30,000 per sale (that's at 6% commission with no splits!). At 1.5 sales per year, each agent makes $45,000! Granted, my numbers aren't precise. I also haven't taken into account the fact that the agent must split with the firm they work for.

Anyway, there's definitely some bubble action going on in California.