For everyone in my industry that will read this, that is kind of an intimidating title, right? For anyone who has seen their social media explode over the past 3 years with their friend’s list outlining that their calling has led them into part time real estate to serve their friends and family, maybe you are relieved. I kid. I don’t write this to say that all part-time realtors fit the stigma that comes with that title, but one bad apple can spoil the bunch. For those of you that are, or have worked with someone that is devoted to this field out of the sole desire to work their tails off for their clients in an effort to see their family and finances thrive (part or full time), you are the real MVP. This article will outline a fair balance of historical facts and educated thoughts as it relates to the quickly approaching market shift, time to buckle up.
Let’s start with the facts. The chart above outlines the most recent cyclical pattern of the number of realtor memberships – in the far right column – with NAR (National Association of Realtors) per calendar year. I understand and acknowledge that there are an unaccounted for number of agents that are not affiliated with NAR, but believe that those numbers would further support this point. Many people believe that the housing market crash was in 2008, but that was the stock market crash. In truth, real estate prices had been trending downwards for nearly two years before this. Total number of transactions dipped from nearly 7 million to 4.12 million from 2005-2008. Below is a chart that better illustrates the number of transactions in the US, beginning in 2005 and ending with *predictions for 2023.
I’m getting to the point, promise. Why would I outline that we will be losing a historical number of agents? It’s because we have more licensed realtors today, than ever in history. As of the most recent report, we have 1,559,537 realtors. Before that, the peak was in 2006 at 1,357,732. Over the course of the market shift up until about 2012, that number was reduced by nearly 360,000. With a current number of nearly 1.6 million, and an inevitable market shift, what is your guess as to the number of agents that will remain? Some would say that is a dangerous question, but cycles are a part of life. Market shifts are normal, and have been happening in this industry since the early 1900’s.
I typically get two responses from fellow agents when I say the title of this article. One is, “Good! It’s about time the more fair weather realtors removed themselves, it makes my job more difficult on the other side of the deal.” The other is more out of worry, asking, “Really? Why would you say that? When is the shift?”.
Reality. The market shift is coming, and if I can be so bold, I think we are starting to see the beginning stages. Again, I am not arrogant enough to say an absolute “yes” or “no” as to the exact date, I’ve been in the industry long enough to know better. What I do know is, I am ready for it. Cross examine the two charts in this article. Do you realize that when the number of agents drops, so does the number of transactions? As we organically and healthily lose agents, the number of transactions to agents remains relatively the same. Another reality. A lot of newer agents are coming up on their CE (Continuing Education) and may not be called to continue with that expense looming. There are multiple factors that contribute, too many to list.
The point. Market cycles should be expected, and are not daunting. The fact that we will be losing agents is good. For those of you that are or know someone that is excellent at what they do [besides this author 😉 ], but are fearful for a shift, encourage them! While I am so thankful for the abundance I have seen in this industry over the past 3 years, I am equally as expectant and eager to watch my business grow in the market shift. My business was around long before COVID reared its head. Serve people well, and they will tell THEIR people just how well you did.
Ricky Caruth: https://rickycarruthrealestate.com/about-ricky-carruth/