April 27, 2006 at 1:02 PM #6534
I’m wondering how realtor incomes are affected so far.
I read an article on the housingbubbleblog yesterday, which wrote about a FL realtor with 35 listings, and only 1 showing all weekend, despite several Open Houses. Another realtor said he charges clients for taking a listing, and refuses listings that are overpriced.
A couple years ago, when a realtor obtained a listing in SD, he was assured of a paycheck a few weeks down the line. It was the easiest way to get paid: just get a listing. Now, having a listing could be a potential waste of time. As sellers overprice their properties and refuse reasonable offers, a listing agent can lose all his properties as they expire… A buyers’ agent is no better off. Buyers are choosy, and keep looking, and make lowball offers that are rejected by sellers. Working with a buyer is risky too. How can you make money as a realtor now? And it will get much much worse before it gets better.
Bottom line: sales are down 35% y-o-y. Realtor’s income is down 35% from last year. How are all the realtors making their mortgage payments?
Has anyone seen any charts showing the rate of change of home sales? Is it picking up or staying the same? Even if it stays the same, a continuous 35% decline in income can really hurt. If that happened to us, I’d have to go back to work, or my husband would be looking for new work.
If I were a realtor, I would also pressure the NAR to run some public education campaigns to end the buyer-seller staredown. David Lereah is not helping anyone when he keeps spouting off that homes will appreciate 6% this year. On what planet is that??? Prices are going up with inflation in Omaha, but are falling in CA. When people hear the NAR say home prices are still going up, they won’t sell below the comps. The staredown will continue, reducing transactions. Realtors should be fuming at David right about now.
And their silly survey is restricted to cities which give them favorable data. Asking David Lereah about the future of housing is like asking Joe Camel whether smoking is bad for you. How much can you trust the answer?April 27, 2006 at 8:22 PM #24683AnonymousGuest
I was wondering about something similar, it looks as if some sellers will not have enough money to pay off their loans and their realtors if they sell at anything below asking.
Does anyone think that realtors are refusing to accept listings based on the fact that they may not get paid? Also I can’t imagine any realtor showing a potential buyer a place where there is any danger of there not being enough money for them to collect any commission.April 29, 2006 at 3:01 PM #24767
Mike, the realtor in the story, said he would take listings only if the seller agreed to his suggested price. He didn’t want to waste time with an overpriced listing.
It’s only a matter of a few months before this happens in San Diego. The bust is further along in Florida.
I wonder how our friend sdrealtor is adapting to the 30% pay cut? I hope his other businesses are picking up the slack, because realty income is permanently down, for at least 10 years. We all need to adjust, and the sooner we do, the better off we are. In our household, income is dependent on how much the government spends on a certain sector. Within 1-2 years, this will trickle down and affect us adversely. At least we don’t have a mortgage, and cash in the bank. And I can go back to work if I need to.
But these little stories give us insight into larger trends. We need to heed them.April 29, 2006 at 3:25 PM #24768sdrealtorParticipant
Poor assumption PS….My income is up and I’m on track for my best year ever. I have turned down a few listings myself. Interestingly, after finding someone who told them what they wanted to hear and twisting in the wind at least one and probably two will be coming back. Unfortunately, the price will be lower than it could have been in January.April 29, 2006 at 6:04 PM #24774
I think that what a lot of people don’t realize is that 30% of the realtors are producing 80% of the business. Its an 80 hour work week and your always on call. You can still go a couple of months without a sale–that can put you in a very depressing state, but sell two houses in one week and you are on top of the world.
There must be a large attrition rate of agents right now, I get two postcards a week asking me to come work for another realtor. When I entered the field in 1998, I only found one broker that would take me in in all of North County.
If your wondering, I still have my license,and working in a different field. I’m just waiting for the drop so I can get back in and sell VA repos.April 29, 2006 at 7:46 PM #24776
Although that seems highly unlikely for any realtor to have their best year in the worst year for real estate in general, I’ll take you at your word.April 29, 2006 at 11:37 PM #24782
Sdrealtor, what is the increase in listings and in pendings you have this year to date over last year? How are you able to pull this off, when the media is full of stories of buyer/seller standoffs?
For your listings: how are you able to get sellers to list at a reasonable price? The newspaper is full of seller/buyer standoffs, and I see listings expire frequently, because sellers won’t take offers.
For your buyers: how are you able to qualify them with rising interest rates, and how are you able to convince them to make the high offers the sellers want?
My friend is a realtor, and she talks until she’s blue in the face, makes Excel presentations, shows comps, and yet she faces the same obstacle to sales each time: sellers won’t negotiate and stay stuck on the price they think they deserve.
You wrote recently about an offer your buyer made, and the seller would not accept the price. So there’s a sale that’s on hold until the buyer/seller standoff is resolved. This is the stalemate I just described, and it is affecting all realtors.
The number of transactions in San Diego is down 35% this year over last year. Let’s assume that 10% of realtors get 99% of sales. If sales are down 35%, then the 10% of realtors who get these sales will get 35% fewer sales. There aren’t other realtors to steal sales from, so the decrease can only come out of the pockets of those who were benefitting.
I guess what I’m saying is I don’t believe you’re having the best year ever, and I’m asking you to prove it.April 29, 2006 at 11:37 PM #24783sdrealtorParticipant
PS..it just shows how little you really understand about this business. There are thousands of real estate transactions every year and this is still a pretty darn good market. If you can do a 10 to 20 you are doing great. Last year was much worse for me. Listings sold well but it was hard to sell buyer’s when you couldnt negotiate with other sellers. There are some realistic sellers out there….they are the ones with properties in escrow! My listings are selling because my clients are selling for the right reasons and are not simply testing the market.April 30, 2006 at 12:33 AM #24784
Well, enlighten me.
How many closed sales have you had this year?April 30, 2006 at 7:45 AM #24787AnonymousGuest
One thing I wonder about is, if sdrealtor is saying he’s having an excellent year and you all are saying that good realtors need to work 80+ hours right now to do well, how can he afford to spend so much time on this website?
On another note, are sellers still listing prices 20-30% over last year’s selling prices in your areas? My wife and I have been looking to buy in the DC area and find this overpricing everywhere. We don’t even bother to contact an overpriced listing. I have spoken with realtors who list things at or below market value – and several have admitted that selling is rough right now in DC. We’ve decided, like other potential buyers we’ve spoken to, to wait things out another year or two. We figure that those agents still standing should be worth our time.
I’ll admit I’ve learned more about the market through blogs and websites such as this one (and this one for Texas – http://recenter.tamu.edu/) and marketwatch.com than I have through NAR. I believe that it’s futile to expect them to say anything negative.April 30, 2006 at 9:47 AM #24793lendingbubblecontinuesParticipant
I’ve got it…sdrealtor is the paid NAR bubble-blogging shill. Pretends to be moderately bearish, yet simultaneously reports that he is having his best year ever.
I would not put it past the NAR to do something like this. In fact, I think I’ll ask “Suzanne” to “research this” for me to see if it isn’t true.
BTW- Check out the UT real estate section today, Sunday, and read the Century21 guy’s report about the “perfect unstorm”. His tactic is to acknowledge all of the what I call “symptoms” of the current stalemate between buyers and sellers, and then to go on and, in all of his infinite wisdom, proclaim that everyone is “cured” because the market has not dropped 10% yet (it actually has in some local markets). The “author’s” name is Steve Ring and he is a Broker, Century 21 1st Choice. I wonder how long he’s been around and how his year is going 😉April 30, 2006 at 11:32 AM #24797
Yeah, sdr has been on the forums this morning, but decided to skip answering the question about his closed sales.
I was only asking him to back up his own statement, that he’s having the best year ever. Now we all know it just ain’t so!April 30, 2006 at 12:30 PM #24798
I’m not trying to defend SDR but there is a realtor in San Marcos here named John Lundin that has a house on every street with his “For Sale Sign” on it. I’ve seen sold signs on about 6 of his so far this year.
Three $600,000 houses have sold close to me in the last week (sounds crazy doesn’t it). Anyone have a link to a site that will show me the selling price?
I get the feeling that the listing price and the selling price have a lot a space between them.April 30, 2006 at 12:48 PM #24799
I bet John Lundin had 10 houses sold by this time last year, for every 6 he sells this year. That was my point. I know that thousands of homes are still sold every day in California. Just a lot fewer than last year. I’m certain the same holds true for our friend sdr. He may have had some sales this year, but they are likely 35% fewer than last year, so his income is likely down 35% vs. last year. And unless he corrects us, with data, that’s how I see his situation.
Realtors may get a false sense of security by having more listings, as listings have skyrocketed. But listings don’t mean much. It’s the sales that matter. Finding a buyer/seller combination, where the seller is reasonable, is the key, and those are much harder to get. The sellers digging in their heels is keeping sales so low. So any realtor who thinks they will have a good year because they have a lot of For Sale signs is going to have a bad awakening. Days on market and inventory portend a slowdown. Having a listing just adds more work, and doesn’t guarantee a sale at all. Most listings probably expire, as the seller will not accept today’s market price. It’s a very worrisome time to be a realtor now.
Doesn’t zillow or moveup.com have selling prices? It takes a few weeks after closing for the data to be recorded, and then show up on the online databases. Local data show sales price is 95% of list price. The data doesn’t tell us what types of homes actually sold (was the price more realistic, the home more desirable, away from busy streets?).April 30, 2006 at 1:42 PM #24800
Powwayseller, I think that we are pretty much in agreement as to the direction of the market, I was just trying to point out that a Listing Realtor with a sucessful farm can rake in the coin.
There is two sides to the commission. The listing agent and the buyers agent. If the house sells on the MLS, the listing agent get 50% of the commission. If the listing agent also finds the buyer he gets both sides of the commission. What I was saying, if you want to buy a house in my area, John Lundin is going to get 50% of the commission. Almost every listing in this area is his. He’s got 5 times as many signs out this year. Even if business is down 50%, hes trolling with 5 hooks instead of one.
What SDR was saying, if he can get his sellers to list at a realistic price, his listings will sell. And if you have a “resonable priced listing” (talk about an oxymoran), some other real estate agent will do all the foot work and the listing agent still gets 50% of the commission.
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