The easy money may be disappearing. In recent years, Top property valuation companies in Brisbane Sacramento’s high-priced housing market has lured thousands to train as real estate agents, many hoping to cash in on the real estate boom.
But now that homes are taking longer to sell and the market appears to be cooling off, many real estate professionals are predicting a shakeout that will force new agents to leave the business and veteran sellers to work harder for commissions.
“Real estate is cyclical,” said Pam Petterle, regional manager for the Sacramento and Tahoe offices of Prudential California Realty. “The people who thought this would be quick and lucrative probably won’t be here in another year.”
Even experienced agents are adjusting for a softer market. They’re beginning to ramp up their marketing, hold more open houses and encourage sellers to list their properties longer.
Those changes come as the number of existing homes sold in the Sacramento area dropped 15 percent in September, according to DataQuick Information Systems.
But that hasn’t translated to a drop-off in real estate licensing. As home prices rose statewide, the number of Californians with real estate broker and sales licenses jumped 23 percent, from 363,842 in June 1990 to 449,107 in June 2005. That’s roughly enough agents to equal the population of Sacramento city, but not all of them work full time.
The increase followed the state’s galloping run-up in the median price for a single-family resale home, which jumped from $194,410 to $543,120 in the same time period, a 179 percent rise.
According to the state Department of Real Estate, the ranks of licensed agents in California swelled by another 5,000 between July and August this year.
But industry observers expect a change. That’s because people tend to enter the business only after prices start climbing and leave after a sustained period of slowing down. State real estate licenses are valid for four years.
“The number of licensees trails the market,” said Dave Tanner, current president of the Sacramento Association of Realtors. He said it usually takes two years after a market upswing or downswing to affect the number of agents statewide.
With California’s median price for an existing single-family home at roughly $550,000, a typical 3 percent sales commission would be $16,500 in today’s market.