Real estate agents feel weight of market slowdown
The real estate boom of the past five years caused many people to switch to, or begin a career as a real estate agent.
Homes were literally flying off the shelves, and many people saw this as a great opportunity to join in on a thriving industry. When potential homeowners were practically clamoring over one another to get into a home, it was fairly easy for just about any agent to sell a house, no expertise was needed.
But now as the market continues to cool, real estate agents who joined on the bandwagon during the boom and lack any “real” experience or expertise are going to go through some tough times in the near future.
An October 3, 206 article by Rob Kelley of CNNMoney.com, “Real estate downturn hits real estate agents,” looks into how the agents are affected by the changing market as well.
“There wasn't just a boom in real estate over the past decade - there was also a big boom in real estate agents. Floods of people across the country applied for real estate licenses, attracted by record sales volumes and seemingly non-stop price gains.”
“During the boom's peak from 2002 to 2004, the National Association of Realtors (NAR) saw memberships soar 26 percent. Today, over 1.2 million Americans call themselves Realtors.”
But now things are looking a bit different for both Realtors, and the housing market in general. The NAR is predicting home sales to fall by 7.6 percent in just 2006 alone.
People who came into the industry during the housing boom are the ones that are probably going to be the hardest hit by our slowing market, since this profession relies a lot on experience, referrals and references.
“Real estate is a notoriously difficult industry for newcomers. The NAR reported in 2005 that those who have been in the business for two years or less had an average income of only $12,850 a year. Long-time brokers - those with at least 26 years of experience - had an average of $92,600.”
“‘You've got a lot of people who got into the business in the last two to three years who never really had to do the hardest work of an agent, people who were basically picking low-hanging fruit,’ said Fryer. ‘Now they're suffering the most.’”
The professionals who have worked in real estate long enough to see many hard times and many busy times, are the ones who are fairing the best during a downturn where most of the nation is affected.
“It is the long-time agent that's proved most immune to the sales contraction, and that's due both to the strong Rolodexes they've put together, and the expertise that only time can build.”
Now many real estate agents who cannot cope with the slow times are beginning to look for other professions.
“Some realtors are beginning to look to other professions for an income to sustain them during the tightening. ‘Many agents in my local community are really crying the blues,’ said Geri DeWitt Ruby, a REMAX agent in upstate New York. ‘They're very pessimistic, and they're even talking about finding other employment.’”
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