Would it surprise you to know that the number of local people working in the real estate economy makes up one of the largest employment groups in the Tri-Cities region?  

One measure is the Northeast Tennessee Association of Realtors® (NETAR) membership. The most recent count is 1,929 members. Add in the number of support personnel at real estate offices who are not agents, and those involved in mortgages, moves, remodeling and home builders, and you can see how the total employment number puts real estate in the ranks of the region’s top employees. As such, they are an important part of the overall business-to-business economy.  

Their efforts account for about 16% of the local economy with the sales and leases of properties and land, and they are also consumers of products and services that help drive the rest of the local economy.  

They are consumers of things like internet service, car purchases and rentals, business supplies, photography, and marketing services. The list goes on and on. The point is real estate is important to the overall economy in both the service and value it adds. It’s especially important to the business-to-business economy. 

In the recent Small Business Week column, I pointed out that the most current Census count lists 264 real estate, rental, and leasing firms in the NE TN – SW VA region monitored by NETAR. Here’s some of that real estate landscape looks like. 

Most local real estate firms have fewer than five employees. Many – if not most – Realtors® are not employees of the firms where they hang their license. They’re entrepreneurs and non-employee businesses.   

The IRS describes non-employee businesses as “small firms – like real estate agents and independent contractors” who meet the standards as a business, but don’t have any employees. They’re one-person enterprises. There are 40,635 of them in the Tri-Cities Combined Statistical Area (CSA). The number jumps to 46,81 when Greene and Johnson counties are added to the count to better describe the NE TN market rather than the government’s CSA definition. They range from medical and technical positions to house-cleaning or small lawn services.   

Locally, real estate professionals account for a little more than 10% of the region’s non-employee businesses. But that doesn’t include real-time conditions. The Census reports lag by a year to a year-and-a-half. The number of Realtors® used to decline when the market softened. But so far that hasn’t happened here. The total keeps increasing. Some of them are full-time Realtors® whose sole role is real estate. Others use real estate as a side hustle. And many are also active real estate investors. 

The payroll amount for real estate firms with employees isn’t publicly available. This is partly because the real estate industry is heavily populated with “nonemployee businesses” – independent contractors pay commission, not an annual salary. However, the revenue attached to the region’s 3,817 non-employee real estate workers efforts was $380 million in the latest report. But there’s a lot more to the economic impact Realtors® provide.   

Residential home sales alone in NETAR’s core area had a volume of almost $2 billion last year. Sweep in the economic multipliers identified by the National Association of Realtors® (NAR) economic researchers and the total balloons by another $1 billion. And that doesn’t include vacant land sales and commercial real estate transactions or deals that were not listed on the local Multiple Listing Service (MLS).   

Overall, real estate accounts for about 16% of the state and local economy, and almost all the heavy lifting is done by firms with fewer than five employees and the non-employee businesses.   

That’s a good definition of small businesses and their impact on the local business-to-business community.