An expensive housing market doesn’t necessarily translate into a lucrative one for real estate agents.
That’s according to a new report from Clever Real Estate, a company that connects homebuyers and sellers with agents. The company weighted 14 different variables to rank the top 50 metro areas in the U.S. in terms of how friendly they are to agents.
The top-ranked city on the list is Detroit, followed by Buffalo, New York; Kansas City, Missouri; Tampa; and Richmond, Virginia. The worst city for real estate agents is San Francisco, followed by Austin; San Jose; Dallas; and Milwaukee.
The top-five cities aren’t usually considered hot housing markets, while the bottom five tend to be thought of as the best ones. This outcome can be explained by the metrics Clever Real Estate chose and how they weighted them.
The most heavily weighted metric (at 19.2%) is affordability of homes, which is based on the number of years of median agent pay needed to buy a home. Detroit, Buffalo and Kansas City are among the most affordable cities in the nation in this regard, while Clever Real Estate’s bottom-three cities for affordability — San Francisco, Austin and San Jose — are anything but.
Three metrics — annual salary for agents, number of agents per 100,000 residents, and annual home sales per full-time agent — were each weighted at 11.5% of the overall rating. While annual salary is obviously important, the other two categories effectively serve as measurements of how competitive the market is for real estate agents.
Detroit and Buffalo were Nos. 1 and 2, respectively, for both the fewest number of agents and most homes sold. Buffalo edged Detroit atop the list for the fewest years of salary needed to afford a home. The highest median salaries, meanwhile, were found in New York City, Buffalo, Seattle, Tampa and San Diego.
The top-five cities in terms of the most years of agent salary needed to afford a home are all California markets, with San Jose and San Francisco topping the list.
New York City has the highest full-time salary but the third-fewest agents. This didn’t result in a top-five spot for affordability because housing is so expensive, but the Big Apple did place No. 11 among the best cities for agents.
Rounding out the top 10 of best cities are Columbus, Ohio; Jacksonville; Atlanta; Pittsburgh; and Hartford, Connecticut.
