The disappearing real estate agents of California: From 542,000 in 2008 to 403,000 California Broker and Sale Licensees. Low volume and low sales continue to dominate market: One of the more interesting sidebars of the jump in home prices in 2013 is that many real estate agents are not necessarily thrilled. You would think that with prices in some areas reaching near peak levels that real estate agents would be jumping for joy. Alas, money is made on sales volume. You make more money on five home sales at $400,000 than on one home sale at $600,000. Investors continue to dominate the market so even for loan processors, the volume for mortgage applications has been low. We have seen a continuing decline of licensed California agents and brokers.
The peak was reached back in 2008 and since then, many have simply allowed their licenses to expire and new blood is not entering the game in any significant way. The trend is unmistakable and you would think the recent run-up in prices would be a call to action for many future agents and brokers. Yet with so many investors going straight to auction, working off the books, and the proliferation of real estate data the demand is simply is not there. Sales volume continues to be incredibly anemic and we have seen a recent increase in inventory this year but nothing dramatic. The reality is, for those looking to buy inventory remains thin and we still have a good number of house horny buyers.
Where did the agents go?
The peak number of California broker and sales licensees hit in 2008 at 542,267. Since then, there has been a slow and steady progression down. Today, we have 403,842 licensed brokers and agents in the state and every subsequent year since 2008 has seen a continued drop. What is going on given that in virtually every city of California prices went up in 2013? Prices went up because of a manipulated market, massive investor demand (waning), and house horny buyers leveraging every penny they have.
Yet none of this is truly a sign of a healthy overall economy. Like roaches, folks are scrambling from the light trying to grab onto anything that potentially has the ability to generate yield (any yield). It is an incredibly interesting trend because from 1996 to 2008 every subsequent year saw a steady increase in licenses going out to brokers and real estate agents. The bar is not a tough one to jump so this is a good indicator of an overall perception of the industry. Yet with sales volume so low, commissions have been slammed. Take a look at the data.