Sam Shueh
Realty One Group
Campbell, CA
With better technology we are anticipating a store-less business commerce. Consumers are beginning engaged in commerce from their wireless devices have their needs delivered. According to CNBC, there has been a gradual closure of department stores, drug stores as we depend more for technology to deliver commerce to you without ever putting your door out. It was not long ago I saw a husband who forgot to bring his shopping list borrowed someone else list and say he will use the same list for theirs too. Then the cellular phone came around calling what kind of eggs do we need at home?
Golden State often sets the trend first, many states later follow. There are fewer and fewer car sale associates these days than before. People order or shop online through Internet fleet manager by getting a better price than going to dealership lots haggling with pushy sales persons. "Sam, can you make a car purchase decision without your wife?" "You will only buy through me not through Bluefin or Zerro dealership". "We have better training here at KX in oil changing. I am a premier salesperson, top 1%."
Historically speaking, real estate is a terse if not seasonal career for many. Most people get a realtor license but few actually put it to good use. During a recession due to job scarcity there should be more people trying realtor estate sales to stay occupied. Many will return to their benefited jobs after hiring starts. That is not what I found out in California.
Fig 1 California historical real estate licensees 2017
(blue-brokers, orange-realtors, grey: total)
Figure 2 Rise and decline of California realtors
When the Great Recession started California lost -13.7% realtors (Indians) while the brokers (chiefs) seem to hang on longer by losing -1%. Brokers have put too many years in the business, they need to work a few more years longer (2009 vs 2008)? Fewer people were buying and agents dropped out.
There was not much a rush to get a realtor license. California licensing class and exam cost together close to $1,000 and 50% people did not pass. The high cost of joining a real estate brokerage, association fee make people more serious if they wanted to get a license these days.
Figure 3 Decline of California realtors during the Great Recession
The trough of the home prices was thought to be around 4th quarter of 2011. From there we saw a huge demand for housings as many jobs were added. Locally, Silicon Valley did not take much beating. iPad was released in Sept 2011. iPhone 4 and 4S (June 2010 and Oct 2011) were released. I was not aware of any cut back from these largest local employer. Facebook and Google, for example could not find enough high tech workers and had to go overseas to seek talant issuing H1B visas.
In fact, by 2010 one third of CA real estate professionals were brokers most work as broker-associates or alone. Many of them had their brokerage or loan office. High cost of maintaining an offfice and staff wages force brokers to work for a brokerage or retire.
Figure 4 California realtors during a stronger economy
A lot of California brokers-chiefs are leaving or retiring. The peak year was 2008. Over the years 18,667 had broker licenses left (-12.2% from the peak). With a strong demand for million or multiple million dollar homes the incentive to become a realtor is there, there has been a slight increase in becoming Indians. However, it is still -29% fewer than 2008 year. People are much more cautious as the cost of maintain membership paying insurance, desk fee and a leased car can be cost prohibitive.
Our mlslistings raised its steep membership fee using professional version of MLS by claiming they lost 30% of paid members. The public version is free to anyone. Many buyer agents wish they need not have to join mls or NAR since public or Redfin will work for them. We have at least five different professional associations in San Francisco Bay Area. Their membership numbers seems to be constant lately, may be gainig a few more agents last two years. 25%+ of California realtors practice in the SFSB area which means we have ~103,385 realtors to work with.
In the Part II, I will outline informing you what may happen to our profession with even better technology.
SOURCE:
Synopsis on Mortgage Interest Rate vs Affordability (Silicon Valley affordability)
Santa Clara and South San Francisco Bay Area Home Stats Q2 2016
How is my Silicon Valley home worth? (Silicon Valley Home Values)
Sam Shueh Real Estate Blogs
Website - Sam Shueh Realtor SamShuehRealtor at Gmail.com
(Four O Eight) 425-1601
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