Real Estate

San Francisco: Worst City for Real Estate Agents with $65K Median Salary

San Francisco real estate agents face high costs, earning $65,000 while needing $300,000 to afford a median-priced home.

By Doug Elli

7/10, 13:04 EDT
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Key Takeaway

  • San Francisco is the worst city for real estate agents, with a median salary of $65,000 and high competition among 103 agents per 100,000 residents.
  • Affordability is a major issue; it takes 18 years of an agent's salary to afford a median-priced home in San Francisco compared to the national average of less than 8 years.
  • Detroit ranks as the best city for agents due to high sales volume and low competition, with full-time agents selling nearly 90 homes annually.

San Francisco: A Tough Market for Real Estate Agents

San Francisco has been identified as the worst place in the country to be a real estate agent, according to a recent analysis by Clever. Despite a relatively high median salary of $65,000 for agents in the area, the exorbitant housing costs make homeownership unattainable for many. The Bay Area's competitive market, coupled with fewer sales per agent, exacerbates the challenges faced by real estate professionals. This analysis highlights the broader economic pressures and market dynamics that are reshaping the real estate landscape in San Francisco and beyond.

The Affordability Crisis

The affordability crisis in San Francisco is stark. It takes a median salary of about $300,000 to afford a median-priced home in the city, a figure far out of reach for most real estate agents. In the neighboring San Jose Metro, the situation is even more dire, with agents needing 25 years of their median salary to afford a home, compared to 18 years in San Francisco. Nationwide, the average is less than 8 years. This disparity underscores the severe housing affordability issues plaguing the Bay Area, making it one of the most challenging markets for real estate professionals.

Market Dynamics and Competition

The competitive nature of the San Francisco real estate market further complicates the situation for agents. With about 103 agents per 100,000 residents, compared to the national average of 63.5, the competition is fierce. Full-time agents in San Francisco and San Jose sold fewer than 10 homes on average last year, significantly below the national average of 18. In contrast, cities like Detroit and Buffalo, which have fewer agents per capita and higher sales volumes, offer a more favorable environment for real estate professionals.

Broader Economic Context

The challenges faced by real estate agents in San Francisco are part of a broader economic context. The city's commercial real estate market is also struggling, with office vacancies reaching a record 34.5% in the second quarter of 2024, according to Cushman & Wakefield. The tech sector, a major driver of the local economy, has seen significant layoffs, further impacting the real estate market. While the rise of AI startups has provided some relief, it is not enough to offset the broader market downturn.

My Perspective: Navigating a Challenging Market

The data from Clever and additional insights from Cushman & Wakefield paint a challenging picture for real estate agents in San Francisco. The high cost of living, intense competition, and broader economic pressures create a tough environment for professionals in the field. However, these challenges also present opportunities for innovation and adaptation. Agents who can leverage technology, build strong networks, and offer unique value propositions may find ways to thrive despite the difficult market conditions. The key will be to stay agile and responsive to the evolving market dynamics.

Street Views

  • Alyssa Evans, Clever (Neutral on the real estate industry):

    "Many people think becoming an agent is easy and can result in a high salary, when in actuality, it’s very demanding and time-consuming, and agents, especially newer ones, likely aren’t making as much as they expected. The most successful ones make high salaries, but it takes a lot of time and effort to get there."
    "It makes sense for agents to be able to afford a home themselves on their salary, and that isn’t always the case in many cities."