To cover the projected budget deficit, the National Association of Realtors’ Finance Committee has proposed aligning membership fees with the Consumer Price Index, increasing the likelihood of annual price increases.
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The National Association of Realtors will consider tying annual fees to a measure of inflation at its board meeting this week, NAR Treasurer Greg Flabach announced at an interim meeting of the trade association on Sunday afternoon.
The NAR Board of Directors votes on industry association budget proposals each year at the Real Estate Agents Legislative Conference in Washington, DC. Board meetings are held on Thursdays.
Greg Flabach
“The NAR closed out 2022 in a strong financial position with record membership,” Hrabcak told conference attendees.
“Having said that, it will be tested for strength in the next few years under difficult conditions,” added Hrabcak. “Our chief economist Dr. Lawrence Yun forecasts an estimated 15% decline in membership over the next few years. We expect a dollar budget deficit.”
The NAR will end in 2022 with a record of 1,580,971 members and says it now has 1,607,000 members in its database. Industry groups project membership numbers of 1.5 million in 2023 and 1.38 million in 2024.
“[I]It’s common for organizations to match their budgets to the current number of members in their database, knowing that there will inevitably be room for variation,” NAR spokesperson Mantil Williams told Inman via email.
The annual membership fee for NAR is currently $150, plus a special assessment for consumer advertising campaigns, which was increased to $45 last year.
To cover the expected budget shortfall, the NAR’s finance committee is proposing to tie the annual membership fee for each member to the annual growth rate of the headline consumer price index (CPI), Hrabcak said. told attendees. CPI is a measure of inflation. This change means that members’ annual dues are likely to rise each year.
Hrabcak added that the rise will not exceed 4% and indexation will begin in 2024.
“We understand the challenges facing our members and are committed to meeting their needs and keeping the NAR financially sound,” Hrabcak said.
If the proposal is approved, the annual dues for 2024 will be $156, an increase of 4% from the current dues.
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manchill williams
“We’re using the Composite Composite CPI from the end of last year,” Williams said.
“For example, we made our 2024 budget proposal in Q1 2023, so we used a CPI of 6.5% at the end of 2022, with a cap of 4%.”
Hrabcak said the NAR finance committee “has been working together to reduce costs and explore opportunities to increase non-membership revenue,” but did not provide additional details.
When asked about the non-membership income the NAR is considering, Williams said: In 2024, he will account for 20% of total revenue and almost 30% of operating revenue. ”
Editor’s Note: This article has been updated with additional comments from the NAR regarding the use of current membership totals in budget proposals.
Email Andrea V. Brambilla.