The coming shakeout among real estate agents

post reply Forum Index » Real Estate

1 2 ► Go

Go to page...

05/30/2024 12:40

Subject: The coming shakeout among real estate agents

quote

Anonymous

The Washington Post ran a story the other day about how real estate agents are "fleeing the field" -- and how the exodus will increase once the new rules about buyers' agent commissions take effect this summer. A link to the story is below. It's a "gift article", so there shouldn't be a paywall.

Most of us on DCUM are buyers and sellers, so it makes sense that we're pretty narrowly focused on how much comissions will be, and how they will be advertised, structured and paid, in the new world order.

But a big part of getting to that new world order is the coming decimation of the agent class, and what that will do to market dynamics. I know that's come up in prior threads, usually raised by agents (I am not an agent). The Post story suggests that the best agents, those who provide real value, will survive and may still be able to command high comissions. But it also cites a lot of research about how bloated the agent class is and how big an employment bubble (albeit with many hobbyists and part-timers) is about to burst. I just think it's interesting -- see some highlighted passages from the story below the link. It's going to be a much-changed market a year from now, with far fewer agents swimming in these waters.

Real estate agents are fleeing the field. Is that good for homebuyers?
New rules are expected to dramatically change how homes are bought and sold in America, which could lead to an industry shakeout.
https://wapo.st/3VknKSn

Some snippets:

- The Bureau of Labor Statistics recorded 440,000 full-time real estate agents and brokers in 2023, about 72,000 fewer than the year before.

- With interest rates remaining relatively high, deals have become so scarce that many Realtors now sell only a few homes a year. A survey of about 2,000 real estate agents conducted by the Consumer Federation of America found that 49 percent of them sold fewer than two homes in 2023. And Realtors will soon face new rules that could result in sweeping changes to how they do business and how they get paid.

- The forecast by Keefe Bruyette & Woods projected that changes to the commission structure could cause 60 to 80 percent of U.S. Realtors to leave the profession.

- CUNY Baruch College’s Sonia Gilbukh and Yale School of Management’s Paul Goldsmith-Pinkham estimated that about 56 percent of agents would exit the market if one side’s commission remained at 3 percent while the other became competitive.

- Gilbukh, the CUNY researcher, believes that only the most experienced agents will be able to keep charging high commissions.

Agents that survive the upcoming transition are likely to be better connected within their industry, having deeper relationships with professionals such as contractors, electricians, plumbers and appraisers, and “overall better poised to advise their clients,” Gilbukh said.