As reported by Real Estate News, the National Association of Realtors (NAR) experienced a staggering decline in membership, losing 26,000 members in 2023. This marked the first annual decrease since 2012, raising questions about the challenges faced by the organization in what was obviously a tumultuous year.
The Large Decline In Numbers
Closing the year with 1,554,604 members, the NAR witnessed a significant drop of 17,489 members from November to December alone. The year-over-year decline of 26,367 members indicates a trend that is causing concern within the real estate industry.
Washington state bore the brunt of this decline, suffering a 9.5% reduction, equivalent to almost 2,200 members. Washington D.C. (down 8.7%), Colorado (down 5.8%), and Maryland (down 5.2%) also experienced substantial drops.
In contrast, Florida (up 1.1%) and Texas (up 0.2%) emerged as the only large-population states showing membership increases, highlighting regional disparities.
Market Dynamics and Internal Challenges
The decrease in membership can be partly attributed to the shrinking home sales market, with annualized existing home sales plummeting from 6.18 million at the end of 2021 to 3.82 million in November 2023. The industry’s landscape has become increasingly challenging for agents with fewer sales opportunities.
However, NAR faced internal challenges, adding complexity to the situation. Dealing with commission lawsuits, navigating leadership changes due to allegations of sexual harassment, and addressing a “culture of fear” painted a challenging picture for the organization.
Another factor influencing the decline was NAR’s decision to raise annual membership dues from $150 to $156 and an additional $45/year fee for consumer advertising support. Anticipating a 15% decline in membership over the next few years, the dues increase created financial strain for many realtors.
Looking Ahead to 2024: A Crucial Year for NAR
As NAR braces for a pivotal year in 2024, industry experts emphasize the importance of the organization returning to its core services and demonstrating its value to members.
Clint Skutchan, SVP of Organized Real Estate at T3 Sixty, emphasized the need for NAR to communicate its distinctive offerings and separate itself from MLSs, suggesting a national roadshow to convey this message.
The real estate landscape remains unpredictable, but NAR’s response to internal challenges and ability to adapt to market dynamics will undoubtedly shape its trajectory in the coming year. We can only patiently wait to see how everything turns out while following the situation.
What are your thoughts on this topic? Is the decline in NAR membership solely a reflection of the challenging real estate market, or are internal issues contributing more significantly than anticipated?
In the face of regional variations, what strategies should NAR employ to address the divergent membership trends across states? With the real estate market expected to improve in 2024 slowly, what specific initiatives should NAR prioritize to regain lost ground and rebuild its membership?
