A real estate agent’s success depends largely on their market. To help determine the best states, we evaluated agent opportunities in all 50 states based on salary, cost of living, home values, competition, and home ownership. Unsurprisingly, the top 10 states had several characteristics in common, including high income and high average home values.
How We Evaluated the Best States for Real Estate
When deciding where to continue or build a real estate career, it’s important to consider factors like cost of living and earning potential. We also ranked states based on home ownership indicators and home values to evaluate the relative strength of real estate markets. Finally, we considered how many real estate agents are already employed in each state to rate locations based on agent competition.
In ranking the states, we considered five major metrics:
- Home values (20%): States with higher home values ranked higher for real estate agents because of the opportunity for higher commissions and because high home values indicate a strong housing market.
- Homeownership (20%): States were ranked based on the percentage of homes that were owner-occupied in 2017. This number reflects the current volume of homeowners and potential for future sellers and buyers.
- Agent competition (20%): To calculate agent competition, we ranked states based on the number of real estate agents per 1,000 workers in each state. We also factored in each state’s location quotient, which represents the number of real estate agents each state has in comparison to the national average.
- Agent salary (20%): We ranked states by agent salary, averaging rankings for mean agent salary and median agent salary. This represents an agent’s average earning potential in each state.
- Cost of living (20%): To balance the agent salary metric, we ranked each state based on its average cost of living.
The 10 best states to be a real estate agent in 2019 are:
Wyoming ranked No. 1 on our list largely due to high rankings for overall agent salary, boasting an annual median wage of $71,430, and a high percentage of owner-occupied homes in the state (70.8%). In addition, the overall cost of living in the state is the 10th lowest of all the states and was given a cost of living index of 90.5 (the average is 100) by the Missouri Economic Research and Information Center (MERIC).
Although Wyoming didn’t perform well for median home value (23rd on the list), there are fewer agents in Wyoming than in many states, ranking it 12th on our list for agent competition. Plus, Wyoming has some of the lowest taxes in the country and has a large volume of undeveloped land, making it attractive for home buyers who want to build a home on acreage.
Michigan ranks high on our list of the best states to be a real estate agent because of low agent competition (third on our list) and a high percentage of owner-occupied homes (71.3%, making it fifth on our list). The state also boasts an extremely low overall cost of living — fifth on our list.
In spite of ranking highly for several criteria, the overall median home value in Michigan is low as compared to other states at $155,700 (41st). Agent salaries are also lower than in other parts of the country, with annual median salaries around $46,000 (33rd on our list). However, the low cost of living makes up for this, allowing Michigan to rank No. 2 on our list; it’s a great option for new agents who want to keep expenses low while building their business.
Vermont offers an excellent environment for real estate agents primarily because of a low rate of agent competition — first on our list. The state also boasts a relatively high percentage of owner-occupied homes (69.5% and 11th on our list) so there is notable opportunity to become either a buyer or seller agent.
Vermont also ranks slightly above average for both agent salary (19th) and median home value (20th). In spite of these favorable factors, Vermont has among the highest costs of living in the United States, ranking 40th on our list for the metric. This combination of characteristics makes the state a great fit for established agents who can afford the high cost of living while continuing to build their business with high salaries and home values.
Iowa ranks fourth on our list because of the high percentage of owner-occupied homes (71.6% at third on our list) plus low agent competition (seventh). The state’s low cost of living —13th on our list — also makes it easier to establish and sustain a successful real estate career in Iowa.
Consistent with the state’s low cost of living, however, the average agent salary in Iowa is lower than half of the other states at about $48,000. The state ranked 43rd on our list for median home value, with a median home value of $149,100. However, the Iowa Association of Realtors®️ housing stats reveal that median sale prices increased 4.5% in April after a 6.7% increase in March.
5. West Virginia
At fifth on our list, West Virginia is a great option for real estate agents primarily because of the high percentage of owner-occupied homes (72.5% and second on our list). Agents in the state also have the potential to earn $63,620 per year on average — more than agents in most states and ranking 10th for that metric — and face less competition than agents in other states (11th overall). This is balanced, however, by the state’s low median home value ranking — last on our list.
West Virginia’s appeal for agents is rounded out by the overall cost of living in the state (21st overall). Plus, while not a criterion considered in our rankings, West Virginia also shares license reciprocity with 12 states and Puerto Rico. This makes the state a great option for agents who want to sell real estate in multiple states ranging from Georgia and Alabama to Massachusetts.
6. New Hampshire
New Hampshire is a good option for real estate agents because of the state’s low agent competition (fifth on our list) and its high percentage of owner-occupied homes (ninth). The state also has a median home value higher than more than two-thirds of the states at $263,600.
However, New Hampshire has a high cost of living compared to other states (37th on our list) and a low overall salary (34th). This can make it a difficult environment for new agents. However, the Granite State is known for its natural beauty and the recent influx of high-tech industries, which make it a huge draw for new homebuyers and, therefore, real estate agents.
Alaska ranks seventh on our list because the state boasts the second highest annual agent salary and the third lowest agent competition. Although the state has one of the highest costs of living in the country (44th overall), median home values are in the top third of states at $273,100 on average.
The percentage of owner-occupied homes in Alaska is lower than in many states (39th) but the lack of major agent competition makes up for this. What’s more, Alaska is a great place to specialize in unique homes like fly-in and off-grid properties. This is a great way for new agents to build their careers in a real estate niche specific to the unique lifestyle in the state.
One of the few western states in the top 10, Utah is among the best states to be a real estate agent because of the higher percentage of owner-occupied homes (69.9% and eighth on our list). The state also ranks well because of the high median home value (11th at just over $275,000), which increases agent commissions.
Utah does, however, have more agent competition than most of the other states, ranking 40th on our list. Even so, the state’s average cost of living (25th) and salary ranking (18th) mean it’s still a great place to start or build a real estate career. Plus, the state is expected to double its population by 2065, which will have a huge impact on the local housing market — especially for agents who specialize in new development.
Ranking ninth on our list, Maine offers real estate agents excellent career opportunities largely due to the high percentage of owner-occupied homes (73.2% and first on the list). The state also ranks better than over half the states for agent competition (17th) and agent salary (19th). This combination of rankings makes the state a great option for new agents because there is only a moderate barrier to entry.
However, the median home value in Maine is $191,200, making it just below average on our list. What’s more, the overall cost of living is quite high (39th on our list) so agents will be best served if they choose a sub-market with higher property values than the state average. For example, consider focusing on a coastal area like York, Rockport, or Bar Harbor where you can manage vacation rentals or represent buyers and sellers of second homes.
10. Rhode Island
Rhode Island ranks 10th on our list overall because of the state’s low agent competition and high agent salaries (ranking second for both metrics). Like Maine, Alaska, and Vermont, Rhode Island has a high cost of living (42nd on the list). However, the high salary potential makes up for this — especially in sub-markets with higher property values and, therefore, higher commissions (the state ranks 17th for median home value).
In addition, Rhode Island features one of the lower percentages of owner-occupied homes (46th on our list), which suggests an opportunity for agents who want to specialize in rental properties. The state may also be a great option for agents interested in working with new construction and first-time homebuyers who will soon be ready to move out of their rentals.
The specific rankings for each of the 50 states and the District of Columbia are:
Rankings of Best States To Be a Real Estate Agent 2019
|OVERALL STATE RANKING||STATE|
|50||District of Columbia|
Click here for a complete summary of the data we considered as part of this study.
To rank the best states to be a real estate agent, we evaluated states based on five major factors: agent salary, cost of living, home values, competition, and home ownership. Each of the categories was given equal weight based on the importance of each metric to the real estate profession. We then averaged the rankings for each state to obtain an overall ranking.
We analyzed data for these five categories:
Home Value (20%)
We obtained median home value data for 2017 from the United States Census Bureau. This metric represents the median value of homes in each state. In addition to being an indicator for real estate agent commission potential, the average home value also reflects the overall health of a state’s housing market and its economy in general.
Home Ownership (20%)
The percentage of homes that are owner-occupied represents how prevalent home ownership is in each state. Higher rates of owner-occupied homes demonstrate a higher likelihood of home ownership in the future, which suggests opportunities for new construction, new listings, and increased need for buyer’s agents. States were ranked from one (the highest rate of owner-occupied homes) to 51 (the lowest); data was compiled by the U.S. Census Bureau in 2017.
Agent Competition (20%)
We measured real estate agent competition based on Bureau of Labor Statistics (BLS) data about the number of real estate agents per 1,000 workforce members in each state. This data point is a single number representing the ratio of agents in each state to the national average. States with fewer agents and a lower location quotient were ranked higher in this study because it shows there is less competition.
Agent Salary (20%)
To evaluate states based on real estate agent earning capacity, we ranked each for annual median real estate agent salary and annual mean real estate agent salary. These data were calculated by the BLS based on “year-round, full-time” hours and reported survey data from real estate agents.
Cost of Living (20%)
We included cost of living in our rankings to adjust for average agent salaries in each state. Cost of living information was obtained from the Missouri Economic Research and Information Center (MERIC) and represents data from 2018.
Bottom Line – Best States To Be a Real Estate Agent in 2019
Choosing a state with a healthy real estate market and low cost of living can have a substantial impact on the success of your career as an agent. If you’re contemplating a move, check out western states like Wyoming, Midwestern states like Iowa and Michigan, or Northeastern states like Vermont and New Hampshire.
No matter which state you choose, Real Estate Express can help you meet the state’s licensing requirements and take the courses necessary to earn your license. In addition to offering pre-licensing courses, they provide a range of continuing education courses to help maintain your license. Click here to learn more.