By Molly Parker
Staff Writer

Stephen Johnson has grown accustomed to the looks of concern thrown his way when he mentions his chosen profession of selling homes and property.

But no amount of bad news spun from the subprime lending debacle could keep the 23-year-old 2006 college graduate from pursuing his passion, an interest that sparked in him as a child watching his parents dabble in real estate prospecting.

“I think that while it is true that the market is very slow right now, the fact of the matter is that the media exaggerates the situation and makes it sound like this is a dying industry,” said Johnson, who recently signed on as an agent with Disher, Hamrick & Myers Real Estate of Charleston.

Even so, Johnson is entering a tough profession at a time when hundreds of others appear ready to jump ship.

Nick Kremydas, chief executive officer of the South Carolina Realtors, said the association’s membership has more than doubled since 2000, hovering around 21,000 members statewide, compared to 10,677 at the turn of the century.

But this year, Kremydas is budgeting for a decline of about 2,000 Realtors statewide, nearly a 10% dropoff in membership.

“It’s like the squirrel preparing for winter while the grasshopper played,” he said. “A lot of these guys haven’t prepared for winter.”

Real estate agents don’t have to join the state, local or national Realtors’ associations, but doing so allows use of the established ‘Realtor’ title in exchange for dues, a commitment to the organizations’ code of ethics and an education beyond the state mandate for a basic sales

license.

More people seeking careers

In recent years, an increasing number of people in South Carolina have been seeking careers in real estate, even if only as a part-time venture.

The South Carolina Real Estate Commission, a division of the state’s Department of Labor, Licensing and Regulation, issued 49,649 real estate related licenses in the 2007 fiscal year that ended June 30. That’s up 13,684 licenses from just three years prior, a 38% increase, and up 18,023 licenses from the 2000 fiscal year, a 57% increase. Fewer than 30,000 people in the state held real estate licenses a decade ago.

Stronger requirements needed

Along with the unusually strong market that preceded this past year’s slowdown, Kremydas also attributed the flood of newcomers to what he considers lax licensure standards.

“Not to disparage a cosmetologist, but they undergo much more rigorous training than your average real estate agent,” he said.

The association plans to lobby state lawmakers during the spring legislative session for more stringent real estate licensure requirements. The association is still working out the details of the proposal, Kremydas said, but he envisions a bill that would mandate an apprenticeship-type program for aspiring real estate agents.

“People are attracted to the industry by the perception that it’s easy to get in, and easy to make money. But the professionals in the industry know that a real estate career is built on lots of hard work in building a business and practice and establishing a reputation in the community. That’s also the reason why there’s so much turnover in the industry,” Kremydas said.

Veteran concerns

The biggest concern Kremydas has heard about in recent years from the more veteran members of the industry is the number of inexperienced agents handling transactions, many of them for the first time, he said.

“That means the consumer is dealing with a brand-new agent that is handling the single largest investment they’ll ever make in their life,” he said.

Though Charleston has been isolated from the worst of the housing bust, due largely to the region’s strong economic base, these are still hard times for coastal real estate agents, said 27-year veteran Ruthie Smythe, the broker in charge of Lane & Smythe Real Estate

downtown.

But that doesn’t mean it is impossible to succeed right now, she said.

Quite on the contrary, Smythe said she thinks this so-called market correction will be good for Charleston-area real estate professionals because it will force out people who were simply seeking a free ride on the gravy train through the boom years. 

“I think it will make for better relationships between the Realtors and their clients because you got rid of those people that didn’t really know what they were doing,” she said.

Short-term memory

With a few good years under their belt, people seem to forget that the market ebbs and flows, and has been much worse off than this, she said. In the early 1980s, Smythe said, she was forced to “get creative” when interest rates reached as high as 18%.

“Those are things agents in the business now have no clue about,” she said. And though it will take a lot of hard work, this isn’t a bad time for a serious novice to enter the field. 

“I actually talked with one person toward the end of last year (who wanted to become an agent). I said the one thing you have to know is you’re coming in at a tough time. You’ll need about six months worth of income,” she said.

As for Johnson, he’s prepared to weather the market, and is realistic about the amount of time it will take him to dig into a profession that can be cutthroat in the best of times.

“I’m a new agent, so coming in I wasn’t expecting to be an overnight success,” he said. “The market goes through ups and downs, and learning how to be successful when the market is down, I think, will be very good for me in the future, when market conditions improve.”

Molly Parker is a staff writer for the Business Journal. E-mail her directly at mparker@setcommedia.com.

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