The property bust forces agents to abandon their hopes of closing a deal.
It must be the stormy real estate weather that there were only 503,284 real estate agents in California by the end of last year. It was a 5.5 percent dip from November 2009, the lowest monthly total since May 2006 according to the state’s Department of Real Estate.
But should the state worry? In my opinion, it should be celebrating nonetheless. First of all, the steady increase in the number of agents since the property boom in 2005 has resulted in a dense labor force that now faces a very languid business environment. In fact, the California real estate agent pool (and so with other states too) turned into a survival-of-the-fittest industry already. Naturally, it should shed any excess labor that it has no use of.
Second, many homeowners have decided to join the bandwagon during the property bubble. They thought of marketing their property by themselves to avoid paying the high commissions awarded to licensed agents (not FSBO). Once they got to dispose their homes, they thought their training was enough to keep them floating above the ground but the market got the best out of them two years ago. We strongly assume that these types of agents have left in droves.
Third, the statistics perhaps inflates the real number of active agents. Most of their licenses aren’t expired yet but they are already in other industries, still working in sales or in an 8-to-5 job. So by next year, we should be expecting a much drastic figure.
Fourth, many homeowners are considering the savings that they can get should they resort to FSBO. And who can blame them for settling in such strategy when it would take the same amount of time to find a buyer when you hire an agent these days?