Most brokerage leaders expect business to improve in 2025
More than 70% of execs in a recent poll anticipate a bump in transactions this year, a sign of confidence that the real estate market has reached its bottom.
Key points:
- Delta Media's annual survey of brokerage leaders found that optimism is way up, with most execs expecting their profits and transactions to rise this year.
- Unlike consumers, leaders are also feeling good about the U.S. economy — or at least they were when the survey was conducted in December.
- But they do have some concerns: Recruiting, declining profit margins and technology issues were among the top five challenges.
Consumer sentiment is in the doldrums, but that doesn't seem to be dampening the spirits of brokerage leaders. A new report indicates that real estate execs are feeling quite optimistic about the direction of their business and the economy in 2025.
Profitability, transactions, market share expected to increase
The annual Delta Real Estate Leadership Survey — a poll of more than 100 broker-owners and executives leading firms of all sizes — found a big jump in confidence for 2025.
Expectations of greater profitability were at a three-year high, increasing from 48% to 63%, while the share of leaders expecting transaction volumes to increase reached an all-time high of more than 70%. More respondents also said they expect their market share to increase in 2025.
Few are concerned about the US economy
One of the biggest turnarounds in the latest survey is the share of leaders expressing confidence in the economy. Two-thirds of the respondents said they were more confident in the U.S. economy than they were a year ago; in the previous survey, just 10.6% felt that way. This aligns with the latest quarterly report released by The Conference Board, which found that the share of CEOs (across industries) who said economic conditions had improved over the past six months had more than doubled.
The Delta survey, conducted in December 2024, "confirms what we've been hearing from top brokerage leaders — they believe their business and the economy will improve this year," said Michael Minard, CEO and owner of Delta Media Group. "They see opportunities in technology, talent acquisition, and overall market share growth. Despite the challenges 2025 will present, the brokerage leaders we surveyed are bullish on success."
Consumers have a different take
Among the general public, the outlook is considerably less rosy. The Conference Board's monthly poll found that consumer confidence fell to an eight-month low in February, largely due to concerns about inflation and the impact tariffs, deportations and federal job cuts will have on the economy.
Because the Delta survey was conducted prior to the rollout of new government policies, it's possible that brokerage leaders could now have some of those same economic concerns. Minard said it's too early to tell, but he expects "we will have a more clear picture in the coming weeks as to if the sentiment is changing."
The start of a recovery in 2025?
While cautious optimism about the new presidential administration may have contributed to the higher sentiment reported in December, Minard says the survey results also suggest that brokers believe home sales have reached a bottom — which would mean the only way to go is up.
"Let's be honest, 2023 and 2024 were very low sales volume years and the general consensus is that sales volume has to go up to more normal volumes for 2025," Minard said.
"Only time will tell if this holds to be true."
What's keeping brokerage leaders up at night
Despite the overall surge in optimism, real estate executives do expect some headwinds in 2025.
The biggest challenge? Recruiting agents, which continues to be the top concern for brokerage leaders. That was followed by reduced profit margins, agent adoption of new brokerage technology, managing the impacts of artificial intelligence — which replaced commissions lawsuits as a top-five concern this year — and strategic cost-cutting.
When asked about their firm's use of AI, most leaders said their agents are leveraging AI-powered tools to write listing descriptions. While 42% of the brokerage leaders were "highly concerned" about the technology, that was down from 50% a year earlier.
"Brokerages recognize the potential of AI but also remain cautious about risks and implementation hurdles," according to the report.