Crowded market: Housing market attracts hundreds of new Realtors

The Business Journal of the Greater Triad Area - February 17, 2006
by Michelle Cater Rash

The Business Journal Serving the Greater Triad Area

Nandi-Amaris Daniels could never picture herself as a real estate agent.

She went to school to become a teacher, and spent the past several years helping middle schoolers learn social studies. But as dissatisfaction in her profession began to build, Daniels, 35, started to give serious thought to the idea of selling houses -- with its scheduling freedom and earnings potential.

Last month, Daniels decided to give it a try. She got her real estate license and opened Daniels Real Estate in Greensboro.

Daniels is just one of hundreds of people around the Triad who have started selling homes in recent years. Combined, the High Point, Greensboro and Winston-Salem Realtor associations saw a 29.2 percent increase in their Realtor ranks since January 2002, the same year the local housing market began to see double-digit growth.

Membership in the North Carolina Association of Realtors grew 46 percent during that span, and now totals 33,350 members. (While most of the state association's members are Realtors, that number also includes associate members, like mortgage companies.)

"The value of real estate and the growth that has occurred has peaked people's interests," said Mike Barr, the executive vice president for the Greensboro Regional Realtors Association. Realtors typically work on a commission-only basis, with Triad agents earning an average of $35,100 last year, according to the Employment Security Commission's figures from last June, up from $31,903 in June 2002.

The Triad saw an increase in home sales for the fifth straight year in 2005, with 12,719 homes sold in the region, according to data compiled from the Triad and the Burlington/Alamance County multiple listing services. Whether there will be enough work for all these newly minted Realtors if the housing market cools as interest rates continue to climb remains to be seen.

"We're not at that saturation point yet if people are still entering," said Michael Luger, a professor of public policy, business and planning at UNC-Chapel Hill. But the Federal Reserve Bank has raised interest rates 13 times since June 2004, and some say the housing market could start to cool by the end of the year.

New people entering the field
But for now, the industry continues to draw plenty of newcomers.

While none of the local Realtor associations tracks the demographics of their members, executives with all of them say they are seeing more young people entering the profession. And local brokers agree.

Mark Yost, vice president of Yost & Little Realty Inc. in Greensboro, said historically it has been difficult for young people to enter real estate. Since most agents are paid solely on commission, he said that people in their 20s and 30s often don't have enough money saved up to support themselves while building their clientele.

That has changed in recent years, he said, with more home builders hiring new agents for on-site sales positions, or brokerages placing new agents as assistants to experienced agents in return for a portion of the commission.

Experts say they are also seeing people with a broader educational background enter the field. For example, Brooke Burr, a principal with Leonard Ryden Burr in Winston-Salem, said the last three agents her firm has hired have all had master's degrees; two of them were MBAs and the third was in math. Many of the young people entering the profession also have college degrees in addition to the required real estate courses.

And, like Daniels, the former school teacher, many people are entering real estate as a second or even third profession. Burr said the last three agents her firm hired all came with corporate backgrounds and were looking for something with more flexibility.

Laws changing to reflect growth.
The record-setting housing market -- and the influx of new real estate agents -- has caused regulators to reconsider the training necessary to sell homes. Effective April 1, those applying for licensure will only be able to get what is known as a broker's license, which requires more education.

Tom Miller, legal counsel for the N.C. Real Estate Commission, said more than 50 percent of real estate professionals are stopping their education with the salesperson's license and not getting the broker's license.

"What that means is that the majority of people dealing in real estate in the state are not a master but an apprentice," he said.

After April 1, the salesperson designation will be eliminated and all real estate professionals must receive a broker's license. An additional 90 hours of education will be required within three years of receiving the license. Those who already have a salesperson's license will be given a provisional broker's license and be required to attend 24 hours of training within the next two years. Miller said the intent of changing the licensing laws isn't to cut down on the number of real estate professionals in the state, but legislators do want to ensure that all professionals are educated and trained.

"It's a quality control measure," he said.
Jo Caubré, executive vice president of the Winston-Salem Regional Association of Realtors, thinks the change could make some people reconsider a career in real estate.

"I think some of the people who are in this part time are going to fall by the wayside because it's going to take so much more time to stay active," she said.