Experts Predict Fewer Real Estate Agents in California
With the California housing market slowing from its record highs of 2005, the California Association of Realtors and the San Francisco Association of Realtors are predicting drops in the numbers of real estate agents playing the field, the San Francisco Examiner reports today.
Existing home-sale prices dropped 1.5 percent between August and September of 2006 and only gained 2.2 percent over September 2005 in the Bay Area, a change from the sky-high growth of the region.
“The number of sales are down in the state as a whole about 31.7 percent. It’s a significant number,” said state Realtors’ President Vince Malta, a San Francisco Realtor. “But putting it in context, September 2005 was one of the best months on record. I think 2006 will be remembered as the year of great transition… from a frenzy to a normal year.”
As the market boomed, so too did the number of licensed real estate agents in the state, from 329,815 in September 2002 to 514,284 in September 2005. Because state-issued real estate licenses last for four years, the state Realtors expect that figure to grow to 600,000 in 2007, but believe trade membership as a Realtor will drop in California from the present 210,000 people to 185,000.
As California mortgage demand wanes and housing prices soften, the San Francisco Association of Realtors expects a drop between 7-10 percent in its membership of 5,300, president-elect John Asdourian said.
“In the past five years, in excess of 40 percent of our membership has less than five years as a real estate agent. During the more normal periods, you don’t have quite the high level of influx. Although I have not to date seen a huge attrition of San Francisco in our membership. Our membership continues to grow,” he said.
Statewide, September saw a sharp drop in the number of new licenses being issued by the California Department of Real Estate from the previous year.
Meanwhile, as real estate agents adjust to the new conditions in which buyers are pickier and homes wait on the market longer, pricing houses right and educating buyers and sellers are becoming the most important skills.
Many reported that individual homes are still receiving more than their asking price, provided that the value is right. But others are cutting prices.
Asdourian said he recently sold a Portola District home for $674,000 after a reduction to $679,000 from $699,000. He also priced a Glen Park property at $999,000 where he would once have tagged it at $1.49 million, and still sold it for $10,000 under the asking price.
Harald Stangl of Sotheby’s Real Estate said he made a bid on behalf of a buyer for $40,000 more than the $749,000 asking price on a single-family home in the Mission, and lost out to someone paying over $800,000.
“Good merchandise sells. People who have overpriced stuff and put it on the market, that doesn’t work anymore,” Stangl said. “I think the change is just excellent, because buyers are really getting more savvy. The buyers are savvy, the loans are low, the unemployment is low.”
Trish Wood of Intero Real Estate Services in San Carlos finds the mid-Peninsula unique in terms of the strength of its market, but says pricing right is the “all” right now.
“If you had a house at $800,000 last year and you sold it at $850,000, you want to price it at $800,000 this year,” Wood said.
Realtors caution against pricing too low in a changing market, saying buyers may stick to that price, whereas before it often led to a bidding war.
Educating both buyers and sellers is also a factor right now as each treads carefully on the new landscape, agents said.
Sellers, for their part, may still expect the 20 percent appreciation that characterized the market previously, when mortgage interest rates were at record lows and property values soared meteorically year-to-year. Buyers now have more options, but greater skittishness, about entering the market.