Home -> Law Blog Directory -> Bailout Blogs -> Calculated Risk

Bailout

: Calculated Risk

Real Estate Brokers' Commissions Lowest since 1982 as Percent of GDP

By Anonymous

More from the Q3 2010 GDP underlying detail tables ...

Note: Residential investment (RI), according to the Bureau of Economic Analysis (BEA), includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories.

Click on graph for larger image in new window.

This graph shows the various components of RI as a percent of GDP for the last 50 years. Usually the most important components are investment in single family structures followed by home improvement.

Investment in home improvement was at a $146.6 billion Seasonally Adjusted Annual Rate (SAAR) in Q3 (1.0% of GDP), significantly above the level of investment in single family structures of $110.0 billion SAAR, or 0.75% of GDP.

Brokers' commissions also declined sharply in Q3 as the number of existing homes sold fell off a cliff in Q3. This has pushed brokers' commissions (0.33% of GDP), to the lowest level since 1982, as a percent of GDP.

Brokers' commissions peaked at 0.91% of GDP in Q3 2005. In nominal terms, commissions have declined from an annual peak rate of $116.5 billion in Q3 2005, to an annual rate of $48.2 billion in Q3 2010 - a decline of over 58%.

And investment in multifamily structures - already at a series low as a percent of GDP (since 1959) - declined further in Q3. This might be the low for multifamily structures since multifamily starts increased in recent months.

Full post as published by Calculated Risk on November 01, 2010 (boomark / email).