Thanks to a struggling housing market and commissions that have been cut nearly in half since 2005, a number of realtors are dropping out of the ranks, reported the National Association of Realtors (NAR) this past weekend[1]. Lawrence Yun, chief economist for NAR, estimates that the “gross commission total has plunged 50 percent in the last five years” and home sales are down a full third in that time as well. Both Yun and Rob Peltier, chairman of HomeServices of America, Inc., estimate that there will be additional drop-off in the coming year.
The NAR currently has about 1.1 million members, but the number of U.S. home sales agents and brokers has decreased by about 25 percent in the past two years. Prior to the housing boom, the association boasted about 800,000 members and in 2006 NAR had 1.4 million members. Peltier believes that the falloff is both inevitable and potentially necessary. “We have too much capacity [and] there are way too many brokers in America,” he said.
Realtors “dropping out” of the business – for now, at least – cite a number of factors, including other time commitments (many of those leaving were part-timers), having to work in “far-flung” areas instead of being able to specialize in certain, preferred neighborhoods, and even health issues associated with showing foreclosures[2]. Some full-time realtors claim to actually “welcome the flight” as they believe that the departure of the part-timers will help keep the full time realtors “who feed their family with commissions” in the game.
Do you think some realtor drop-off could be a good thing?
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[1]http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-salesindustry_08bus.ART0.State.Edition1.3ca0535.html
[2] http://thetimes-tribune.com/news/number-of-realtors-slipping-1.1060881
