This trend could signal a new housing bubble
Here we go again. The number of Realtors is rising, fueling concerns about an overheating real estate market.
When John D. Rockefeller got a stock tip from a shoe-shine boy, he decided it was time to sell. The year: 1929.
That story is often cited as providing a clue about dangerous bubbles: when the "common man" thinks he's an expert in a particular market. Back in 2003, the Economist warned of a housing bubble (apparently, its prediction was a tad early) after its economics editor was advised on the housing market by a taxi driver, a plumber and a hairdresser.
But here's another data point that some people are monitoring as home sales and prices keep rising. That's the number of people switching careers to become Realtors. The thinking is that a surge in property agents may be an early-warning sign as some opportunists jump in when selling homes looks like easy money.
And, indeed, at least a few markets are seeing a boom in new Realtors, Business Insider reports.
In Miami, the city's Association of Realtors says it has seen a 27% jump in new members, ending June with 3,800 agents, up from 3,000 a year earlier. Only a few of those would be transfers from other associations.
And the Chicago Realtors association noted 600 new members this spring, its first growth in membership for the past five years, Chicago Grid reports.
Not surprisingly, the resurgent interest in a real estate career accompanies a jump in sales. In Chicago, home sales rose by 32% in May from a year ago, and in Miami, home prices are up again after the housing collapse hit the city hard.
Because Realtors' pay is based on commissions, a thriving market translates into more income for agents.
During the boom years, Chicago Now's Gary Lucido says, "every doorman, bar tender, and taxi driver became a real estate agent so they would have a ticket to earn the outrageous commissions from friends, family and casual acquaintances."
Even though mortgage rates are rising, they're still near historic 50-year lows, The Wall Street Journal notes. And Freddie Mac (FMCC) economists say rates shouldn't affect buying patterns unless they reach 7%.
There's some evidence that more people are flocking to the real estate profession across the country. As of June, about 1.44 million people worked in the business, according to the U.S. Bureau of Labor Statistics. While not all of those workers are licensed Realtors, that's still a jump from June 2012, when 1.42 million people worked in the field.
Still, most of those new Realtors probably won't be raking in the big bucks. After all, the Labor Department notes the median earnings of a Realtor stood at $42,680 in 2010.
Follow Aimee Picchi on Twitter at @aimeepicchi.
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"Are there too many realtors?"......
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Not only are there too many realtors, there are too many car dealerships, retail chains and defense contractors. But the National Association of Realtors is one of the top five lobbyists greasing the US political system with cash, and the car dealers, retailers and defense industry are not far behind.
When is America going to have a system of free media for political campaigns?
As a former real estate agent, I know that only 20% make a living out of real estate. What you have te hand over to the company is in most cases 50% and then you have more cost that company wants from you, which means that you end up with about 42.5% in your hands.
Most agents sell 1 1/2 to 2 homes a year! Especially if you don't go after listing in a specified area. When I did that I started to make money, but before that I had two jobs to make ends meet.
I AM A REALTOR - Please note that a "Realtor" is more than a licensed agent. We have a code of ethics that is enforceable against bad eggs but it is only as good as long as people file complaints against these folks. I have found the biggest turkeys to be non-Realtors because they have nobody looking over their shoulder and are otherwise only held accountable via the state Departments of Real Estate who are woefully under-staffed. As a professional, I have managed transactions to avoid lawsuits later - some of which were threatened and dropped when my clients were obviously protected correctly. I have conducted dozens of short sales that no non-expert could ever accomplish to get a legitimate financial monkey off the backs of good folks who lost jobs, loved ones who were the financial earners, or encountered other horrible circumstances that would not allow them to keep the home but will now qualify to become contributing homeowners and support our economy sooner than if they had taken a foreclosure. I have helped too many Sellers to count in identifying how to invest in the highest return areas in preparing their home for market and staging that home effectively to maximize return. I regularly negotiate to give my clients the best terms and price but explain everything to them so they can make intelligent trade-offs on risk and opportunity to maximize return. While everyone focuses on if they can get the same price by themselves, I will get my client a better price almost every time for too many reasons to recant here, yet much of what we do is risk management and ensuring the deal is solid and won't come back to bite the client later. For all of this I pay 3 associations (local, state, national), 5 additional insurance policies, about 10 more information subscription services in addition to my MLS, company overhead, I have 5 printers, I should buy stock at Staples to give me some return on all the money I spend there, pay for professional photography and video services, put an ungodly number of miles on my car, work every day of the week and into the evenings to be responsive to my clients, regularly am interrupted in my limited family time, and I still get phone calls 50% of the time across the main holidays of Christmas, New Years, Easter, 4 of July, and Thanksgiving. I went on a 4-day family vacation this last weekend and had my laptop out 3 of those days for anywhere from 1 to 4 hours each session to keep deals going. Yes, there are worthless agents like any profession, but if you think this job is easy and unnecessary, please revisit all of the types of folks I help and how much of my personal life is lost to do it. I DO THIS JOB BECAUSE I MAKE A POSITIVE DIFFERENCE IN THE LIVES OF PEOPLE EVERY DAY.
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