Not surprisingly, the number of people that thought a real estate career was a great idea skyrocketed during the housing boom a few years ago.
It happens all the time. People looking for easy money jump into the latest craze. When the easy money disappears, they move on to the next scheme.
Many long time real estate agents are seeing the game changing. Newspaper advertising is dead and agents no longer control access to real estate information. Consumers can pop onto hundreds of websites and find information on every local property for sale. Faced with the prospect of competing with agents that are blogging and using social media to target the next generation of home buyers, many more agents have decided it is time to find a regular job with a paycheck or retire.
Most full time professional real estate agents welcome the exodus of agents that jumped into the field in search of easy money. We wish the part-time agents who don’t treat real estate as a career would find another pastime. These agents often contribute to the unprofessional image of our profession.
Cleaning house is a good thing.
The real estate agents who are still making a living in the current market are professionals. They understand what it takes to make a small business successful. They know how to give their clients excellent customer service. They educate themselves on the trends and issues, and are willing to change with the times.
How Many Agents are Getting out of the Business?
The vast majority of agents in major metropolitan areas join their local Realtor Association and the National Association of Realtors.
I’m pleased to see that membership in the St. Louis Association of Realtors has dropped below 2002 levels. With 11% increased membership in 2003 & 2004, we simply had too many brand new agents that didn’t know what they were doing.
Based on these numbers, 1 in 4 real estate agents that were working in the St. Louis region in 2005 have stopped selling homes.
Nationally the trends are basically the same, though the build up of new agents continued throughout 2007 and only started dropping last year.
*** Membership numbers provided by SLAR and NAR.
I predict that the numbers will continue falling as real estate agents opt for a steady paycheck. Assuming that they can find a job.
Offices Closing their Doors:
Along with agents, many brokerages are finding it hard to make ends meet. Many of the larger brokerages in town have cut costs by consolidating branch offices. Others have gone out of business including including some of the largest companies in town such as Edward L. Bakewell Realtors and Blake & Davis Realtors.
The numbers are continuing to spiral down.
As of March 15, 2009:
- St. Louis City – 47
- St. Louis County – 516
- St. Charles County – 238
The agents and the offices that survive will embrace the new market. They will be reading blogs to find the most successful practices in the industry. They will learn to market their services on Twitter, Facebook, LinkedIn and by becoming bloggers. They will abandon expensive and ineffective newspaper advertising, and will provide excellent customer service.
I intend to be one of those agents that survives.
Visit me on Twitter, LinkedIn and Flickr.
To learn more about Keller Williams Realty, visit ConsiderKW.com.
10936 Manchester Road St. Louis, MO, 63122 USA
admin@archcityhomes.com • 314-677-6538
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{ 2 comments… read them below or add one }
Karen, any metrics on the suspected level of attrition that is not reflected by these numbers? What I mean is, surely there are speculative optimists who are maintaining their membership in the unlikely event they may get a listing or start up again when the market recovers, but who are not actually doing business now.
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Rich – Without access to membership info, the best I can do is look at MLS sales. There are many agents that keep their association memberships but work as an assistant to another agent, working as an appraiser, inspector, or are riding out the bad market.
According to the local MLS (MARIS), there were 28,774 MLS listed closed sales in 2008 across all property types. The top 2000 agents by volume did 76% of the sales. The top 5000 did 97% of the volume. There were 7284 agents that did at least 1 transaction. That number suggests to me that most of the agents that renewed their license last year (2008 was a license renewal year including required continuing ed classes) are actually working agents.
But, the numbers drop dramatically if you look at the number of transactions agents are doing:
1+ – 7284
2+ – 5626
3+ – 4582
4+ – 3863
5+ – 3351
6+ – 2914
Last year, I did 21 transactions which put me in the top 600 agents (which includes big teams where all of the listings are entered under just the team leader’s ID). If you look at agent ranking by $ volume, then my $6.7mm puts me in the top 265 agents/agent teams.
The reality is that there will always be a large percentage of agents in any market that manage to help 1 or 2 friends/relatives each year. Many new agents will get into the field, manage to do a couple of transactions before they realize it is hard to make a living in real estate, and will then quit.
Still, the overall numbers coming down are a good thing for those of us that treat real estate as a career rather than pocket money.