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More real estate agents elbow into crowded job market
By Dennis Quick
Senior Staff Writer
Are you a prospective Lowcountry homebuyer looking for a real estate agent? No problem. You’ve got a choice of more than 2,700. That’s about 250 more agents than you had to choose from in 2002 and almost 500 more than in 2001, according to the Charleston Trident Association of Realtors.
The growth in the number of real estate agents is a national trend. While other segments of the U.S. economy faltered during the past several years, the housing market—driven by low interest rates—flourished. Residential real estate became an enticing alternative for people who lost their jobs in other professions.
Today, the National Association of Realtors has more than one million members—an increase of more than 200,000 in the past three years.
As of April 1, membership in the Charleston Trident Association of Realtors, an NAR affiliate, reached 2,709, with no end in sight, says CTAR spokeswoman Sara Perry.
CTAR attributes its membership increase partly to the Lowcountry’s population growth and subsequent housing boom. Additionally, the area’s strong housing market—so far this year, the average sales price of a Lowcountry home is $232,649, compared with $227,865 at year-end 2003, according to CTAR figures—continues to attract newcomers to the industry.
“More home sales at higher average sales prices translates into lots of large commissions in the eyes of many new agents,” explains Perry.
However, fat commission checks are far from automatic, a fact that eludes many rookies rushing into the industry, says former NAR chief economist John Tuccillo.
“You can explain what is happening now very easily,” Tuccillo told Knight Ridder Newspapers in January. “When people lose their jobs, becoming a real estate agent and selling $5 million in real estate looks attractive. Just because half of the agents in the business can’t financially justify being in the business doesn’t seem to matter.”
Incomes in the industry are commission-based. According to the S.C. Department of Labor, Licensing and Regulation, which issues real estate licenses, the average annual income for South Carolina’s rookie real estate agents is just over $23,000 while veteran agents earned an average of $42,300.
The NAR has similar numbers. In 2002, the gross annual income for the association’s members was around $35,000 for those in the business five years or less. Those with experience of 10 years or more earned nearly $60,000.
Aspiring real estate agents in South Carolina first must complete a 60-hour course and then apply to the state real estate commission, part of the LLR. Successful applicants must then pass a state licensing exam. After passing the state exam, applicants must affiliate themselves with a broker or real estate company to get a one-year provisional license. Within that year, prospective agents must complete a 30-hour course before obtaining their real estate license. CTAR, Trident Technical College and the Real Estate School of Charleston are among local institutions offering real estate courses.
“It used to be that the industry was made up mostly of older people looking for a second career,” says CTAR education assistant Sherry Martin. “Now we’re seeing more people in their twenties who are college-educated. And we’re seeing lots of people who have lost their jobs elsewhere.”
The influx of new arrivals into the industry makes competition among agents a little tighter, says Ron Henderson, a broker with Century 21 Properties Plus in North Charleston.
“It affects us a little, even if newer agents sell one house a year,” explains Henderson, a 20-year industry veteran. “But as soon as we hit a soft market, we’ll lose newcomers by the score. Only the best of the best make it in this industry. It’s the old ‘80-20’ rule: 20% of the people do 80% of the business.”
Dennis Quick covers real estate for the Business Journal. E-mail him at dquick@crbj.com.
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