As Housing Market Tanks, Realtors Leave Profession

Damage from the nation’s housing market is evident throughout the economy and has permeated financial markets. Now, add real estate agents to the growing list of victims, though few tears will be shed for them.

The National Association of Realtors expects membership rolls to decline this year for the first time in a decade.

The group ended the year 2006 with nearly 1.4 million members, double the roughly 700,000 it had in 1997, but expects 2007 to close at 1.3 million, about a 7 percent decline.

Agents’ ranks continued to rise even after the market began to cool about two years ago, because of the 18-month lag between the downturn in sales and membership, said NAR spokesman Walter Molony.

Trade groups in two of the states where the market for home mortgages has been hardest hit, California and Florida, also forecast membership drops.

The California Association of Realtors is expecting its first decline since 1997, forecasting a year-end tally of 185,000 members, compared with more than 199,000 last year.

The Florida Association of Realtors has about 154,000 real estate agents compared with more than 161,000 last year at this time, but expects flat membership by year’s end.

Colleen Badagliacco, president of the California group and in the business since 1980, said many agents joining the last three years wanted to cash in on a hot market.

However, they were not prepared to endure what she calls the “perfect storm” that attracted more agents than a sagging housing market can support.

California mortgages have risen so high that few people can afford them, and home prices have started to erode. Buyers then wait to see if prices will fall further and inventory lingers.

Moreover, banks have tightened credit so that fewer people can even get a home loan lender to approve them for a loan in the beginning.

In California, applicants can get a conditional real estate license after taking one class, a loophole that will close after September 30, as three classes will be required.

SOURCE: Chicago Tribune