Pie Holes (reprinted from 2006)

Unknown-3Has anyone else noticed just how many new real estate agents there are working those open houses, working those phones, working the inventory of active listings to death? A little scary huh?

At last count there were 1600 + Agents and 1100 + single family homes for sale in the County. How many slices can the pie be cut into? How many people do we need feeding us pie? How many pie holes do we want yapping at us in Sentinel advertorials? How many real estate agents does it take to keep a screwy market turning?

Like lemmings descending, salmon swimming upstream or eels migrating through the Sargasso Sea, Agent overload is not a new phenomenon – just a cyclical one. Graph the last forty years of the market’s ups and downs, superimpose the changing number of licensed Realtors over it and the peaks and valleys of both will correspond pretty
closely with each other – with just a little lag time in between.

Whenever a market starts to heat up it takes about a half year for the next batch of dreamers to start hopping on the bandwagon, heading towards the promised land of easy money. In the old days, boom markets exercised a powerful magnetic pull on part-time teachers and bored househusbands. Today’s $750,00 median price point has
become a pilgrimage for displaced dot.com refugees in search of a new gold and adrenalin rush.

Conversely, when a market loses steam, erstwhile success junkies fall off the bandwagon.
When the going gets really tough, a whole lot of Realtors end up blending back into more normal avenues of employment – ones with guaranteed paychecks, benefits, nights, weekends and holidays off – if there are any of those kinds of jobsleft out there.

The attrition rate for new Realtors is amazingly high. Roughly 80% nationally in the first few years. That’s a lot of Anthony School Books to recycle, BMW leases to turn back in and money poured down the drain on success seminars and positive affirmation tapes.

The cultural trend of super-sizing is also impacting our numbers (bigger is always better right?) Local “uber” brokerages with overactive thyroid conditions are pounding the drums and sounding the siren call for new agents. They are opening boutique offices in every nook and cranny of our local landscape. Quite a few corporate “outsiders” have put pins in the map of Santa Cruz as well. Note the influx of new company signs dotting the neighborhoods and recognize them as signs of changing times.

It’s all good fodder for the “People in Business” column and ad revenues are certainly up along with competition between brokerages. But I worry about the people becoming Agents who probably shouldn’t. I worry about the way local is trying to look more corporate and the way corporate is trying to look more local. Most of all. I worry about the people and the homes out there that have become defacto incubators and petri dishes for well-meaning rookie Agents struggling to learn the ropes.

There are training programs in most of the expanding offices. Some of them very good. But learning how to write a proper contract or how to avoid a lawsuit or use all the tools of the internet or how to sell, sell, sell in order to meet desk quotas doesn’t do a whole lot to teach young people without much lifeexperience how to help their clients navigate through some of the most intense transitions they will ever face – death of a loved one, birth of twins, illness, job loss, divorce, bankruptcy.

Suffice to say that real estate looks a whole lot easier from the outside than it does from the inside. It’s amazing how fast a new Agent’s expectations can get chewed up and spit out by the physical, mental and emotional marathon of a profession they once envisioned as a quick sprint to the finish line of wealth and success.

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