Fewer transactions, lower sales volumes and rising industry costs have weighed on both residential and commercial markets, in a stark contrast from the record-setting activity in 2022.
But despite housing affordability and economic challenges, real estate firms are showing resilience, leaning heavily into repeat clients and referrals, training and technology. They’re even expanding into add-on services, according to the newly released 2025 Profile of Real Estate Firms, a survey by the National Association of REALTORS® of more than 4,500 real estate executives.
“Real estate firms are on the frontlines of the industry and are seeing firsthand how housing affordability and local economic conditions are impacting their clients,” says Jessica Lautz, NAR’s deputy chief economist. “Firms are also experiencing the rising cost of running their businesses. While the current real estate market is challenging, the majority of firms expect profitability to at least remain stable.”
Top Industry Challenges Identified by Real Estate Execs
Housing affordability has been a persistent thorn to the real estate market and was cited as the biggest challenge real estate firms will likely face over the next two years, NAR’s survey of real estate execs shows. Respondents also cited rising costs, local or regional economic conditions, as well as keeping up with technology as the top challenges they anticipate continuing for the next two years.
Despite these perceived challenges, more than a third—or 38%—of real estate firm leaders expect their profitability to increase by the end of the year, offering what they believe is a hopeful trajectory that the market is on the cusp of better days ahead.
Market Performance by Firm Size
Both the residential and commercial markets have seen fewer sales transactions, which has dampened sales dollar volume. Most sales that were generated tended to be from repeat business and referrals—with firms reporting that about half of sales were from past clients.
Real estate firms with only one office posted a median brokerage sales volume that fell slightly to $4.6 million in 2024, whereas firms with four or more offices had a median brokerage sales volume rose to $169.2 million, NAR’s report shows.
Expanding Services to Reach More Clients
Many firms are offering in-house ancillary services to increase how they serve their clients, such as with the addition of business brokerage, commercial consulting, relocation services or home staging, the NAR report shows. The following shows the most common add-on service offerings by real estate firms.
Support to Agents and Staff to Stay Resilient
Real estate firms are helping agents as they navigate the shifting market. They are prioritizing errors and omissions/liability insurance as a top benefit provided while the most common tools they provide to agents are electronic contracts and forms, comparative market analysis, e-signature and multiple listings. What’s more, nearly three in four firms said they urge their agents to pursue real estate certifications and designations.
