In 1978 the average age of a real estate sales agent was 42. This makes perfect sense as the boom in franchising was driven by people who were in the prime of their professional careers. (By 1977 the U.S. had over 5,000 independent franchises) Interesting to note, agents during this time were working with buyers and sellers who were basically their same age.
By 2000, the average age of a real estate sales person was 50. The age delta between agent and customer (buyer/seller) is skewing older, but not so much that it leaps over generational divides. At this point, a little age can be viewed as bringing wisdom and experience.
In 2012, the average age of real estate sales person is 56. Obviously, the age delta continues to widen but more importantly, perhaps for the first time, we have agents and buyers/sellers who, for the most part, are of different generations.
Is it fair to say many consumers would prefer to have business relationships with people closer to their own age? Probably not, but today’s Generation Y’s are all hitting their 30s and are the prime age to be in the market for real estate. In choosing a real estate agent, do Gen Y’s really want to work with their Mom and Dad?
Generation Z is probably ten years away from being considered real estate purchasing prospects. It’s pretty easy to see that, for the sake of the entire industry, the average age of real estate sales people must come down. It doesn’t take a genius to realize, the industry can’t continue its current path. Real estate desperately needs younger agents.
What makes anyone think new Gen Y agents will embrace, in any significant numbers, the business models and practices of their grandparents? That’s right, both the agent/broker, and agent/Realty Board business models are rooted in the wild and wooly franchise days of the mid 1970’s.
Arguably the single largest contributor to the aging agent workforce can be found in the disconnect between the business models and messages of the 1970’s, and the younger sensibilities of the Internet-enabled, turn-of-the-century agent. Desk fees, franchise fees and the concept of a commission split are all artifacts of the double-knit era. All of those ideas made perfect sense in 1974. Few of those ideas make much sense in 2015. Today’s young professional, “thinks” very differently from the young professionals of 1974.
The want for change is clearly evident. Everybody talks about change because it makes for such wonderful rhetoric. But truth be told, very few people, particularly in real estate, have the power to affect even the slightest change. In theory, sales agents can create change, but in all practicality they are powerless. Agents are powerless, in large part, because the nations largest industry group who speaks on their behalf doesn’t like change.
Brokers can create change. As a matter of fact, most of the non-technical changes the industry has seen in the last few years, come from regionally focused, community involved, independent Brokerages. It’s at this level in the industry where the debate on change is most active. The industry has plenty of 1970’s style brokerages still feeding off the 50% split with a side order of franchise fees. In what hurry are these brokerages to make any change?
In the near term, the average age of a real estate agent will continue to rise. Every day there are tens of thousands of baby boomers either retiring or looking for part-time opportunities. Since getting a real estate license is extremely simple, look for a lot of younger senior citizens to sign up. It makes fiscal sense for the retiree and the real estate schools would certainly be on board with a surge of retirement-age students. All that said, it shouldn’t be much longer before the average age exceeds 60 years. At what point do you begin to wonder if the demographics of realty offices will begin to mirror the demographics found in those temporary H&R Block offices staffed with Nixon-era CPAs?
It is impossible to hide from it, but the aging workforce tells us change is on the horizon. Changes the industry took on during the early 70s steered the industry on a good course for over two generations. One can only hope today’s industry, and whatever changes they take on, will fair as well.