It’s your last chance to get BOTH new Marketplace Sock designs for only $5/month.
Don’t wait – this special offer ends today!
Strong home sales in recent years have drawn a wave of people into the real estate business. Case in point: membership in the National Association of Realtors has jumped 25 percent in the past four years.
But aspiring agents be warned: even as home sale prices continue to climb, many markets are suffering from low supply. According to Redfin, the number of homes for sale dropped 11.4 percent in February 2018, marking 29 straight months of year-over-year declines in housing inventory.
The wave of new agents, combined with fewer homes to sell, means more competition between realtors, said Jim Haffey, Jr., a realtor with Howard Hanna Real Estate Services in Northeast Ohio.
On a recent, and unseasonably warm, afternoon Haffey spent two hours walking door-to-door in the city of Rocky River, Ohio, trying not to sweat through his blazer and hoping to meet his next client. Haffey, who used to work as a tree trimmer, has been an agent for over a decade. And until recently, door-knocking wasn’t one of his preferred methods for drumming up potential clients.
“But now that there’s more people in the business, there’s less of that to divvy up,” he said. State and local realtor associations have seen their ranks swell in the past few years. The Ohio Association of Realtors (OAR), which has about 32,000 members, has grown 19 percent since 2013.
“Competition is good. It does things like this,” Haffey said, as he walked with a stack of fliers and business cards in hand. “It’s making me step my game up.”
Although realtors like to joke that the influx of interest in real estate is driven by reality TV, the main draw seems to be a strong housing market. Recently, the average home sale price in Ohio reached a record high, according to OAR.
“The housing market is on fire,” said Christy Bernard, a spokeswoman for Hondros College of Business, an Ohio-based for-profit school that runs classes aimed at preparing students for the state’s realtor license exam. “More homes are selling, and for higher prices.”
As a result, Hondros has seen yearly enrollment for its pre-licensure program more than double, from just under 2,000 students in 2012 to over 4,000 in 2017. To meet that demand, Hondros has added more locations, more instructors, and an online course.
But as more people jump into the industry, each agent’s piece of the real estate pie gets a little smaller. Despite the increasingly competitive field, Katherine Stewart, 26, said she’s not worried. Currently an agent at Stouffer Realty in Stow, Ohio, Stewart dropped out of the University of Akron when she was 19. After several years of waiting tables in a diner, she said she’s just happy to have a potentially lucrative job that doesn’t require a college degree.
All it took, she said, was eight weeks of night classes and about $1,200, “which is a lot cheaper than one semester at Akron U.” It’s an investment that’s starting to pay off, Stewart said. Shortly after getting her license last Spring, she said her first sale came relatively quickly, and her commission was about $2,000.
“It was the biggest paycheck I’ve ever had,” she said. But after the euphoria of that first deal faded, it was back to the hardest part of the job — finding the next client. On that score, Stewart said she spends a lot of time on Facebook, looking for hints that people in her network are soon going to be in the market. Big life events, like a new job or a new baby, are some tell-tale signs.
“People getting engaged is a big one,” she said. Stewart also relies on an app that alerts her when people Google-search home listings in her territory.
“There’s money to be made in this field,” she said, “you just got to find it.”
The median income for realtors nationwide is $44,090 per year, with the top 10 percent of earners bringing in upwards of $112,570, according to a 2016 estimate by the U.S. Bureau of Labor Statistics.
Nationwide, the average yearly income for real estate agents is $59,360, according to a May 2016 estimate by the Department of Labor.
That earning potential is what attracted Victoria Timperio, 34, to the industry. For most of the past 15 years, she said, she’s worked as a restaurant server in Mentor, Ohio. But on a recent weeknight, she was at Lakeland Community College, studying for the state real estate exam. With her first child on the way, she said she needs a better paying job, and she’s not too worried about competing with the hundreds of others getting into the field this year.
“Looking around the class, we’re not all going to make it,” she said. And she’s right. According to a survey by the National Association of Realtors, many newer agents aren’t sure they’ll stay in the business more than a couple of years.
“You hear realtors talk and you hear stories,” Haffey said. “Someone who just got in the business gets a ton of sales and you kind of catch yourself wincing a bit.”
To try to keep ahead of the competition, Haffey said he’s doing a lot of things he didn’t use to do. Now, he spends several hours a day making cold calls, scouring the internet for leads, placing neighborhood-targeted ads on Facebook, and combing various databases for homes that were listed but have not sold. Recently, he’s been experimenting with making video postcards for potential clients — anything to gain an edge in an increasingly crowded field.
“I’d like to say that I work 40 hours a week, but realistically it’s probably more like 60,” he said. “You definitely lose sleep in this business.”
Despite the challenges, Haffey said he loves the job, especially the moments when he gets to hand the keys to the buyer of a recently purchased home. “[You] give them a big hug, take a picture with them. You’ve almost made a friend for life,” he said.
He said he’s committed to building his business, which means he’ll probably be knocking on a lot more doors.
|Tight inventory slows down housing market|
|Tax changes could have big effect on housing|
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.