Agent Production Grows at Predictable Rates

How similar are the production trends for real estate agents as they begin their careers? Are agent career progressions predictable to any degree?

It turns out that, over the last 8 years, agent “cohorts”, groups of agents who were licensed in the same year, follow remarkably similar production progressions. We looked at thousands of agents who were licensed in Wisconsin and Arizona since 2011 and followed them through their first 8 years in real estate. What we found was that agent cohort’s average production followed nearly the same trend whether they were licensed in 2012 or in 2017.

When we plot the average production of a cohort of agents (all licensed in the same year) against the number of years since they were licensed, all cohorts since 2011 follow a similar curve. In Wisconsin (below), most cohorts finish the first year averaging around $800,000 in production growing steadily through $3,000,000 in production by year 5.

Agent cohort production by years since licensure. Data: WIREX

Phoenix-based agents also follow very consistent paths, topping out somewhat lower than their Wisconsin counterparts (believe it or not).

Agent cohort production by years since licensure. Data: ARMLS

Beyond this growth consistency, a few other observations:

Agents leave the business at very high rates during the first 2-4 years. This ends up being a case of selection bias where the successful agents remain and the unsuccessful agents self-select out. We’ll focus on this in a future blog post.

The average agent growth continues through at least year 7. Agents don’t necessarily top out in year 3 or 4.

This predictability in growth is what allows Relitix to make accurate assessments of the future success of newer agents – our Rookie Potential Rating.

We’ll continue looking at the growth and development of new agents with a look at attrition in our next post.