Real Estate Agent Boom Slowing

I guess Elizabeth Rhodes must be on vacation or something, because lately all the real estate stories in the Seattle Times have been refreshingly less biased than I've become accustomed to. For instance, take a look at this report from Jane Hodges on the huge increase in the number of real estate agents in our state.

In Washington state, the flight into real-estate mirrors national trends. The number of adults who took courses to qualify for state real-estate licensing tests here has almost quadrupled over the past four years.

In 2001, 1,172 adults completed training; last year, 4,561 did. The number of practicing agents statewide also has nearly doubled from the 22,356 in 2001. At the end of April, 42,712 were working, Department of Licensing data show.

But at a time when mortgage rates are heading north and many prognosticators say the real-estate boom is about to stall, how will all these agents find business?

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, says the rise in the number of agents in the state isn't surprising. However, it's likely that number will drop as the market cools.

But I thought the market was never going to cool? Aren't we going to see continued wild appreciation from now until the next World War? Well... maybe not quite—and Ms. Hodges actually has the guts to admit it.

Some say the slowdown has begun.

Erin Sullivan, a registrar with Windermere Education in Seattle, said she sees fewer new agents these days.

When Windermere brokers hire new agents, they typically send them to Sullivan's department for in-house training, a practice common at most brokerages.

During much of the past three years, new-agent-training classes have been packed, Sullivan said, with a dozen or so people on wait lists for 48-person classes. Now classes fill up only at the last minute.

"The plateau started a few months ago," Sullivan said.

Even as the public face of Realtors pulls a Baghdad Bob in the face of the inevitable slowdown, the boots on the ground belie their official position. One other tidbit I found interesting in this article was the statistics on real estate agent wages:

NAR reported in August 2005 that the median income of agents with less than two years' experience was only $12,850, while that of agents with six to 10 years' experience was $58,700.

If they're only making just barely over the median wage after 6-10 years of experience, it's no wonder they want so badly for house prices to keep on rising. Although, I believe that is a national statistic, not a local one.

(Jane Hodges, Seattle Times, 05.20.2006)