The softening residential real estate market is tightening recruiting plans for the nation’s realtors.
After the number of real estate agents in the country nearly doubled between 2000 and 2005, the National Association of Realtors expects the number of agents to stay flat in this year compared to last.
With unit sales of existing homes predicted to be down 6.5% this year, Walter Molony, a spokesman for the group, said the number of realtors is expected to be close to the nearly 1.3 million sales agents working in 2005.
That 1.3 million compares to just 767,000 as recently as 2000.
Molony said the drop in home sales is the most severe in California, Florida, and the Mid-Atlantic with some upturn in the less-pricey areas in the nation’s midsection.
Recruitment is down for Prudential California Realty, which covers the areas of Beverly Hills, Santa Monica, and Brentwood, according to a company spokesperson.
Unit sales in the market are down by a third this year with dollar volume declining by 20%.
He said agents are dropping out rather than being fired.
“We don’t get rid of people. The market gets rid of people,” the spokesperson said.
Bob Dowe, manager with RE/MAX Partners in Ft. Lauderdale, said some of his existing agents who are having a tough time are dropping out. However, he noted new associates are coming in just as fast as clip as they were.
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Rick Loughlin president Coldwell Banker Residential Brokerage for Central New England, said with the tighter real estate market, he is focusing on recruiting agents with previous real estate sales experience. The office covers Massachusetts and Rhode Island.
Loughlin said recruitment used to be 75% new agents and 25% with experience, but this year he is aiming for a 50-50 ratio because the learning curve is lower with the experienced sales professionals.
RE/MAX International spokesman Jack Farrar said the higher experience of his company’s agents compared to other brokerages is helping the company weather the sales slump.
“We feel with the structure of our network we pick up market share because our agents are the most productive in the country. Newer agents do get hurt in a slowing market.”
Orawin Velz, director of the Mortgage Bankers Association of America, said her member companies are seeing employment gains slowing compared to the last three years, with job growth expected to be 5% to 8% in 2006.
She added that the expectation that the Federal Reserve Board will stop increasing interest rates could help the recruitment picture for mortgage bankers.
–By Ted A. Knutson