Advocate of Youth Tells Why
The 1984 membership profile of the National Assn. of Realtors shows the median age is 45.
At the same time, today’s commercial realty investment specialist is a 44-year-old male, earning between $65,000 and $75,000 annually, who works in a city of 500,000 to 750,000, according to a newly released national study of real estate professionals sponsored by the Commercial-Investment Real Estate Council.
These mid-40s figures bother one serious realty firm owner in Upstate New York. That median is far too high for Tom Wright, owner of Century 21-T .L. Wright Realty.
He wants the youth of the nation to be more aware of careers in real estate and he is working with his colleagues and the national association to reduce that median age by increasing the number of young people entering the field.
“Let’s get them interested in real estate careers,” he said, allowing that young people have “little or no experience, lack maturity, and/or have difficulty relating to older people. But the price is right. We can afford them. Their drive and enthusiasm are worth two tons of vitamin pills and 10 kegs of iron-rich supplements.
“Also, they are beginning to come out of two- and four-year college and university programs with business management and real estate degrees. Although the selection process might be exhausting, so is diving for pearls.”
In a telephone interview from his offices in Cobles Mill, west of Albany, Wright repeated his concern at the lack of youth in the business. He had written about that concern in the February edition of Real Estate Today, the monthly official publication of the realty association.
“We don’t have much of a choice,” he wrote. “If we choose success, we must keep pace within this fast-moving business. We must fill the middle-management gap with people who ‘fit’ and who are affordable. There is no wiser investment than that we make in people.”
Wright, who started his business 17 years ago, and now has four franchised offices, has been active with area community colleges and Northeastern University in Boston to promote his idea of youth-in-real-estate. His four-office staff of 45 is about evenly divided among young and old.
He agrees that at a time when millions of young people throughout the nation are potential home buyers--yet cannot afford to buy homes even with two salaries--there are comparatively few young people selling homes. There should be more sellers who can relate to more buyers of the same age, he argues.
He ties this problem to a “middle-management gap,” one which is stifling the growth and vitality of the business because of the lack of experienced people capable of assuming management roles.
He acknowledges that hiring salaried staff members, in the traditional commission-oriented real estate field, would represent a major change in the make-up of the industry.
The dilemma he cites is this:
“As we move into more service areas--securities, insurance, investment counseling, business brokerage, property management, leasing, appraisals, and even tax preparation, we need able middle-management people to head up these programs.
“The problem is not self-imposed. Early on in the real estate industry, all that was required to be a real estate broker after licensure was to hang out a sign, have a few business cards printed and place several ads in the local newspaper. Most businesses were operated by a mom-and-pop team or by a broker with several part-time salespeople--and they remained that way for many years.
“Certainly, some companies grew, added sales staff, perhaps a sales manager, and moved to better locations. But usually, there were only two levels within the organization: the top and the bottom. Nothing much existed in between.
“During the 1970s, the arrival of the franchisers exerted a significant impact on the real estate industry. They sold new concepts, growth and promises of success. Along with the franchisers came new and improved services. Those who jumped aboard energized their businesses with renewed vigor and enthusiasm, which forced the strong independents to grow and expand their services. However, the basic structure remained the same--strong entrepreneurial leadership from the top and dedicated, capable salespeople at the bottom.
“Nothing was done about the middle-management gap. Of course, some companies tried the office- or sales-manager system by promoting one of their high producers or bringing in the owner’s spouse. The highway to disaster is littered with those results.
“It’s impossible to correct overnight a condition that has existed for more than 30 years--and with all due respect, some broker-owners will resist change regardless of what form it takes. However, such change must be approached with objectivity and accomplished with haste.
“Can good middle-management people be hired off the street? Can we afford to hire them? The answers are yes and yes but a closer examination reveals new problems. It is unlikely that most expanding real estate companies can comfortably absorb too much fixed-salary cost without immediate or short-term return. Putting a sound, capable management team in place is time-consuming and expensive.
“If we can’t offer top wages, then what can we offer? Incentives, profit-sharing, stock options, a challenge and a place to grow are some possibilities. The excitement of the real estate business may be attractive to someone bogged down with mundane tasks in a 9-to-5 job. Many within that group already possess basic management skills and would like to hear more about career opportunities.
“So, if we can have only one of the two basic ingredients, we should seek management skill. Real estate skills are more readily available in the marketplace and, in my opinion, can be developed more quickly.”
Wright’s discourse in the magazine is aptly labeled the “Achilles’ heel of real estate.”
The national survey on realty specialists conducted for the Commercial-Investment Real Estate Council by George Washington University’s School of Government and Business Adminstration in Washington, D.C., provides some attraction for those who might pursue real estate careers.
The study included those who hold the Certified Commercial-Investment Member (CCIM) designation, a broker or manager of a brokerage or another professional involved in commercial-investment real estate. Each must complete a rigorous series of courses and examinations and is generally recognized as reaching the industry’s highest standard of proficiency and achievement, according to Ralph Varnum, chairman of the council and president of an Overland Park, Kan., commercial real estate and development firm.
The CCIM holder is earning more money and has significantly more experience than the commercial broker without the designation, Varnum said.
“The survey also shows us that among those in the ‘pipeline’ to earn the designation, the candidates are younger, better educated, more frequently women and, in some cases, are entering commercial real estate directly from college rather than through the traditional route of residential real estate,” he noted.
Females comprise 11% of current CCIMs, 14% of those in the middle of the course sequence and 23% of those in the first two courses, confirming a trend toward more women in CCIM ranks.
While the study showed that the median age for CCIMs is 44, those in the middle of the courses are 40 and those who have entered the first course are 35. The average CCIM needs 3 1/2 years to earn the designation, and there are about 1,900 who hold that title nationwide and in Canada.
As to earning power, Varnum said CCIMs have a median income of between $65,000 and $75,000, while candidates for the designation and first-time enrollees in courses earn $35,000 to $45,000.
In the “pipeline” are 4,600 candidates, Varnum said, while more than 7,000 students will get instruction this year nationwide in 115 separate course sections.
