Will still there be a career for graduates in real estate during this time?
The Internet serves us easier listing-buyer matches that can be accessed any time of the day. While information is available to potential buyers, it cannot substitute the services that real estate agents can provide. In the 2007 National Association of REALTORS (NAR) Profile of Home Buyers and Sellers, only 43 percent of the total home sale values were sold by For Sale By Owners (FSBO) method while more than half of the sale values were agent-assisted transactions. Real estate professionals have the technical knowhow and can provide accurate prices, organized paperwork, local knowledge, professional acumen, and effective negotiation and closing procedures. Other professionals in the property sector provide numerous benefits to buyers too. The National Real Estate Investors Association, a non-profit trade organization, provides education, networking and guidance on legislative issues to its members that are necessary for legal and ordered transactions. Brokers, investors, network association and real estate news editors each have a role in the industry too.
Just how real estate agents fare against virtual benefits? In 2008, the same survey by the NAR on 133,000 homebuyers, revealed that 87 percent found the importance of the Internet in finding the right home (up by 2 percent from last year) while 85 percent looked to a real estate agent. When asked where they first learned about the home purchased, 34 percent of buyers said a real estate agent while 32 percent answered the Internet. Eighty-seven percent of home buyers used the Internet to search for a home purchased through a real estate agent in contrast with 72 percent of non-Internet users who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction. Yes, real estate agents remain seminal in the market. However, unemployment cases have soared in recent months after the property mess debilitated the economy. According to the a href=”http://www.bls.gov/news.release/empsit.t14.htm”>Bureau of Labor Statistics, employment in the real estate, rental and leasing industry went down by 9.1 percent. Jobs in residential building construction also fell by 8.1 percent, while residential specialty trade contractor employment dipped by 18.8 percent.
With the recession sinking the property market to foreclosures, bankruptcies and chronic job loss, should job seekers still pursue a career in real estate? It’s a question that needs to be answered by how well the government intervenes in the crisis. Agent services can never be substituted but if current conditions force them to realize that career successes can be hampered by the losses in the property sector, more professionals will be likely pursuing occupations in healthcare, education, public service and other industries. In a report by Businessweek about business school prospects after graduation, it concluded that students will be having slimmer chances of landing suitable finance jobs in the market after bankruptcies, buyouts and mergers followed one after another. Business schools have ridden the current tide according to the report, “Wherever they end up, those new applicants will find a B-school landscape in many ways transformed by the events of the past 18 months. While long-term curriculum shifts may take a few years, students can expect to encounter new classes, new case studies, and a new emphasis on risk. Much of this has already begun, with a growing number of business schools planning to add concentrations in risk management in coming years, ramping up the number of classes they offer and starting new risk management centers. Wharton’s Meyer, also a professor at the University of Miami School of Business, is setting up such a center there this fall and predicts that others will soon follow suit.”
It would certainly prepare them for tougher times ahead but as to where they could apply their learning in Wall Street is still a mystery when downsizing among companies is rampant.
Stimulus programs to help the economy rebound are necessary in getting employment creation back on track. While we should expect that short term effects may be borne in no time, long term solutions are much more needed to sustain recovery. It can spur growth in the real estate industry and absorb more competent human resource. For now, students and career seekers are still afraid in taking the risk of entering the property job market so that they can be assured in recovering college expenses. When the property cycle rebounds from the bottom, we may very well see labor re-absorption in real estate to accommodate competent workers who have transferred to other industries and fresh graduates wanting to take a bite at huge profits in sales, marketing and investment in properties.