Agents of Misfortune : Times Are Only Getting Tougher for State’s Realtors
Whenever an escrow closes, real estate agents at First Interstate Realtors in Culver City celebrate by popping a bouquet of balloons at their desks.
But those noisy celebrations have grown more and more infrequent in recent years as Southern California’s real estate slump has gotten deeper and deeper. Since 1990, the real estate brokerage (no relation to First Interstate Bank) has let go 10 of its 15 agents.
“We work longer hours,” said First Interstate owner Dolores Golden. “Sellers are aggravated. . . . Everybody’s credit is bad. I should be frightened to death.”
These and other problems have weighed heavily on Golden and the estimated 2,000 other real estate agents and brokers who attended this week’s annual meeting of the California Assn. of Realtors in Palm Springs.
Many of those at the meeting, which ended Thursday, are struggling through wrenching changes, ranging from new technology to industry mergers and rising pressure to trim commissions. The uncertain times have left many in this traditionally upbeat group somber and apprehensive.
Stress, exhaustion and strained customer relations are among their most common complaints. “When you have to tell people that their biggest asset [their home] has been reduced in value, that creates a lot of stress,” said Ed Albers, a real estate broker in the Sacramento area and president of CAR.
Reflecting the industry’s turmoil, CAR itself has been troubled by membership squabbles and complaints that it has failed to move fast enough to respond to industry changes.
“It’s an unusually unwieldy organization,” Los Angeles real estate broker Fred Sands said during a session on the future of the trade group. “We need to restructure.”
This week’s conference comes in the wake of the recent announcement that Jon Douglas Co. and Prudential California Realty--two of Southern California biggest real estate brokerages--plan to merge. The combined firm is expected to have 4,000 agents statewide.
The merger plans have already led to the closure of seven offices in Santa Monica, Glendale, Ventura, Montecito, Camarillo, Malibu and West Los Angeles, though layoffs are expected to be kept to a minimum because most agents in the shuttered offices will be reassigned, company Chairman Jon Douglas said.
However, he added: “We might suggest [to some of the agents] that they might use this as an opportunity to leave. They are not making a good living and probably should not be in the business.”
In fact, in the face of growing pressures and shrinking income, a significant number of agents have retired their open-house flags and signs and given up on the business. CAR’s membership plunged more than 28% between 1990 and 1994 to about 106,000.
“I would not be surprised to see our figures go lower [this year] and in 1996,” Albers said.
The industry’s race into the age of computers and on-line services has left many agencies rushing to keep up. Big Bear Lake broker Bob Henderson has only one personal computer and 15 agents, many of whom are scared of the new technology being shoved at them.
“Our listings are on the Internet but my agents don’t know how to draw them up,” said Henderson, who estimates that a third of his agents will be forced out of the business because of the new technologies.
“They will not learn the system and will fall behind the rest,” he said.
On a more upbeat note, CAR predicted Thursday that the state’s residential real estate market will bounce back in 1996.
The trade group expects sales of existing single-family homes to increase 7.4% next year, contrasted with the drop of nearly 11% expected this year. While the median sales price is expected to decline 4.5% this year, the median price should creep up 0.5% in 1996 to $178,540, CAR said.
The current slump and the fears triggered by a fast-changing market stand in sharp contrast to the late 1980s, when agents received offers on the first day of an open house and closed the deal in a matter of days with a minimum of effort.
During those salad days, Pasadena agent Roland Wilhelm at Jim Dickson Realtors said, he averaged a sale every 30 days. Now the 37-year-old agent takes three times as long to sell a house, despite working 90-hour weeks and spending an average of $750 to list a house.
For motivation, Wilhelm keeps a photo of himself standing in front of one of the nicest homes he sold in the early years of his career, a two-story Spanish Colonial sold in 1990. “I keep the picture to remind myself that I can still do this,” he said.
Irvine agent Jeanne LaFourcade often comes away drained from meetings with clients whose homes stagnate on the market and deteriorate in value. LaFourcade, a Remax agent who has been selling homes for more than two decades, said she recently had to tell a young couple that their home was worth tens of thousands of dollars less than the mortgage, meaning their home equity had been wiped out.
“She’s in tears,” LaFourcade said. “He’s got no job. They’ve got two kids. They can’t make their payments and I can’t even get them out of the house. I’ve never seen as many people in financial trouble in 22 years.”
In Woodland Hills, Temmy Walker at Rodeo Realty has given up on predicting when the slump will end. Last winter, she had a strong gut feeling that sales would pick up after the holidays and she even cut her vacation short.
“My gut feelings are usually right,” she said, adding that nothing happened. “It started raining and it [the market] died.”
But Walker has no plans to give up a career that began nearly 20 years ago when the former commercial artist moved to Los Angeles from Chicago and marveled at the variety of homes and how they were nestled in the hills and valleys. “It was artistic,” she said.
“I have no intention of leaving,” Walker said. “This is my life.”
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Vanishing Realtors
Membership in the California Assn. of Realtors dropped 28.2% between 1990 and 1994 as real estate prices and sales have fallen.
