Feb022012

realtors losing people, losing income, losing homes

This is a miserable time to be a realtor. Over the last five years, 21% have let their licenses lapse, total commissions are down over 40%, and 12% of realtors have reported losing homes.

It’s hard to feel too sorry for many of them. This is the same crowd that pushed homes on people as great investments in 2006. Conditions may be tough on realtors, but it has been more tough on their bubble-era clients.

1 in 5 gave up real estate license

Published: Jan. 24, 2012 Updated: 12:25 p.m. — posted by

California has 21% fewer people holding a real estate license than it did five years ago when the tally peaked at just under 550,000 licensees, state figures show.

That’s equivalent to one out of every five license holders at the peak giving up their California real estate licenses, or allowing them to expire.

The number of people holding a license has fallen from one month to the next for every month but one in the past four years, according to the state Department of Real Estate.

In addition, the state figures show:

  • As of October – the latest month for which numbers were reported – California had 435,865 people with a real estate license.
  • That compared to 549,244 in November 2007, when the number hit an all time high. That was equivalent to one person with a license to sell real estate for every 24 households in California.
  • Since then, the number of license holders dropped by 113,379, or 21%. The latest tally still is equivalent to one license holder for every 31 California households.

Do we really need that many realtors? Do realtors produce such a valuable service to our economy that we need to sustain so many of them? Would we somehow be unable to consummate a real estate transaction without them?

Having worked with Shevy for a few years now, I see the value an agent can bring to the transaction, but by and large, most agents are transaction leeches. They siphon money from a transaction without providing any value. If we have fewer of them, I don’t see any great loss to society. Perhaps some will get retrained to do something more productive.

Home commissions fell $100 million in ’11

January 30th, 2012, 11:43 am — posted by

Yeah, we know, we’ve said it before.

The real estate market was the pits in 2011. Big deal.

Well it was a big deal if you were a real estate agent here last year. How big? $100 million bucks worth.

That’s how much got sucked out of the real estate earnings of agents and brokers in 2011. And that’s just comparing it to 2010. Compared to 2005, real estate commissions were down almost 700 million big ones.

Homes sold through the broker-run multiple listing service generated $13.8 billion in 2011 — 10.8% less than in 2010, according to figures from the California Regional Multiple Listing Service.

The dollar volume of home sales has nearly cut in half, and realtor commissions are slipping as competition is forcing many to drop from 6%. Overall dollars flowing to realtors is down significantly.

The latest CR-MLS report shows further …

  • The service reported 26,392 homes sold through the broker-run network last year, down 3.1% from 2010.
  • The average price paid for an Orange County home was $522,815, down 7.9%
  • Of the 26,392 homes sold in 2011, 11,733 — 44.5% — were “distressed.” The bulk of those were bank-owned, foreclosed homes or “short sales” — that is homes selling for less than sellers owed on the mortgage.

Sales volume is 2011 was down from the anemic levels of 2010, and prices were off nearly 8%. Those are horrible numbers. Falling prices and falling volume portends of continued falling prices in 2012. The high percentage of distressed sales is equally telling. The so much bank-held inventory and shadow inventory, the percentage of distressed sales will likely be the same or higher in 2012. I wonder how many of those distressed sales were realtors…

12% of agents lost property to foreclosure

January 31st, 2012, 10:04 am · · posted by

A new survey taken for title insurer Entitle Direct of 290 Southern California agents — and 800-plus nationwide – found deep financial pain for many real estate salespeople.

The survey says:

  • 12 percent have lost their own property to foreclosure during the housing downturn — a roughly 1-in-8 rate that’s one-third higher than a comparable national trend.
  • 88 percent of local agents polled say they lost money, are making less money or are depending on savings now to supplement their income.
  • 32 percent of those surveyed say they’ve experience a cut in revenue of 50 percent or more.
  • 16 percent of local agents had to get a second job.
  • 10 percent of agents from the region said they were forced to sell their primary residence.
  • 12 percent of local agents toll pollsters they’ve been forced to rent housing vs. 9 percent nationally.

Twelve percent admitted to losing a property to foreclosure, and another 50% lied about it — I made that up, but you get the point. realtors were major speculators during the bubble, and I have a hard time accepting only 12% lost homes to foreclosure.

Thirty-two percent have seen their income drop by 50% or more! Ouch! How do they continue to make the lease payments on their Mercedes? I hope their Option ARM hasn’t recast yet.

It’s a tough time to be a realtor.