(AP)- In the past couple of years, Detroit, Michigan has edged its way into the top five major cities where first time homeowners can afford to put down roots. Despite significant changes in the real estate industry, Detroit is also the best place for realtors.
Homebuyers continue to pack their moving trucks and head south, seeking lower living costs and warmer temperatures. Real estate agents may be tempted to follow. However, a new study by Clever Real Estate finds the grass is actually greener for agents in the northern Midwest.
For years, moving patterns have shown people relocating to the South or West. New data from the moving and storage company PODS echoes this: of its top 20 cities with the highest number of move-ins, only three fall outside the Sun Belt.
Yet according to the Clever study, cities in the Midwest and Northeast boast some of the best markets for real estate agents, with Detroit offering the most opportunity. High average salaries, less competition, and affordable homes are just a few perks agents can expect if they relocate.
Most of the top markets are also ideal for new agents. The hours required to get and keep a license fall well below the norm.
What’s Behind Population Moving Trends?
Real estate in the 2020s combines long-term trends with substantial systemic shakeups.
United States Census Bureau findings show that Southern cities grew the most in 2023, averaging 1% year-over-year. 13 of the 15 fastest-growing cities are in the South — eight in Texas alone. San Antonio welcomed the most new residents, with Fort Worth close behind. Florida cities note similar growth.
“Economic opportunities, such as job availability and income potential, are significant motivators,” explains Dennis Shirshikov, a finance, economics, and accounting professor at the City University of New York and Head of Growth at gosummer.com. “States with lower taxes, affordable housing, and good weather, like Florida and Texas, have seen an influx of new residents.”
Remote work propels this shift, pushing professionals out of expensive urban centers and toward affordable locales without sacrificing higher salaries.
The Census Bureau reports declining population in high-cost states like California and New York, with their largest cities citing .2% and .5% shrinkage, respectively. With average home prices of $793,600 in California and $649,000 in New York, consumer cash stretches further in Texas and Florida, whose respective averages are $336,400 and $405,000.
The Carolinas, Tennessee, and Georgia have grown over the past year, becoming popular among consumers who seek affordable housing and enhanced quality of life.
Selling Points for Agents
The study says homebuyers’ preferred locations differ from those of real estate agents. Residents prioritize affordability, well-being, and amenities, while agents analyze market activity, median home prices, living costs, and the ratio of agents to households. Texas, for instance, has a highly competitive real estate market, leaving fewer deals for full-time agents.
Conversely, Detroit’s affordability is good news for agents and clients. Despite a median home sale price of just $245,683, agents’ 2.96% commission rates inflate salaries to $63,910. Despite its high potential, agent competition is low in Detroit, with only about 15 full-time agents for every 100,000 residents.
Buffalo, New York, is even more affordable for real estate agents. Low living costs and competition allowed each agent to sell approximately 49 houses last year.
Kansas City, Missouri, is also ideal. The Midwest city’s average annual agent salary is $59,430 — 18% higher than the national average. There’s also less competition here to handle a fast-paced market. Homes tend to sell in just 34 days. Between 2020 and 2023, Kansas City had the state’s largest overall population growth.
“Real estate agents prioritize markets with high transaction volumes, strong economic growth, and favorable commission structures,” Shirshikov says. “These conditions ensure a steady stream of business and income opportunities.”
When Should Agents Make a Move?
Job opportunities, an attractive climate, a lower cost of living, and lifestyle preferences may tempt agents to relocate. But they shouldn’t pack up without doing their research. The following factors can help you determine if it’s time to make a move:
Increased Competition
A competitive, cut-throat real estate market may make earning a living difficult. Regardless of agent experience, those looking to settle in a new town should analyze regional data, such as agents per 100,000 residents and agents’ annual sold property average.
Time To Get a Real Estate License
Licensure procedure varies from state to state. Some offer partial or full reciprocity agreements, allowing agents licensed in another state to skip some or all educational requirements. However, in many states, agents must completely restart licensing training.
Texas agents must fulfill 180 hours of industry education to obtain licensure, more than any other state. Massachusetts and Michigan require the least — just 40 hours.
Property Appreciation Rates
Property value analysis points real estate agents toward cities on the cusp of a sales boom. Zillow data cited in the study says Buffalo, San Diego, Phoenix, Tampa, Florida, and Charlotte, North Carolina, will see values rise 1.1% or more in the next year.
“In cities where property values are climbing quickly, agents stand to make a lot more money,” said Jeffrey Zhou, CEO and Founder of Fig Loans. “This rise in property value isn’t just good for the agents; it’s great for their clients, too. Everyone wins, making these cities even more appealing.”
For Agents, Opportunities Buck the Moving Trends
Real estate agents considering a change of scenery should look beyond the cities where the masses are moving. A market saturated with too many agents can make settling down and earning a living difficult, especially for those just starting.
By contrast, markets in the Midwest and Northeast offer little competition, affordable housing, and high median salaries. As such, they’re rife with opportunities for agents who aren’t afraid to go against migration trends.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
