The Market Has Gotten Better, So Where Are the Agents?

By any measure but one, the real estate market is sizzling. In 1998, the market racked up record numbers in home sales, rates of home price appreciation and housing construction.

But unlike other real estate booms, a record number of real estate agents has not flooded the business.

Take California, where during the late 1980s an estimated one of every 75 people in the state was a licensed real estate agent. Today, there are 70,000 real estate companies compared to 150,000 in 1990, according to the California Department of Real Estate.

In 1990, there were 147,500 members of the California Assn. of Realtors, and today there are 93,000, “even though we are three years deep into the recovery of the California real estate market,” said the group’s president, Joel Singer.

He says the number of people entering the business is creeping up, but not as it did during other real estate booms, when every housewife, laid-off worker and enterprising salesman hung up a real estate license.

Consolidation, better opportunities in other professions and technology explain the trend.

The legal barriers for getting a real estate license remain very low, but the rewards cannot compete with those of other jobs that are more certain and promise benefits that independent real estate agents don’t enjoy.

Moreover, it can take months or even a year before agents earn their first commissions, a sacrifice that few people are willing to take today.

Although the real estate business is still very fragmented, with 87% of all real estate firms having only one office, there has been significant consolidation, with big franchise networks buying up local firms.

Another change in the real estate sales business is the slow elimination of those who are not adopting technology.

In the last two years, real estate agents have actively invested in technology. Working in an industry that once shunned even the basic computer tools, agents are buying new machines, getting online and marketing on the Internet.

Take Philadelphia-area Realtor Judi Wolfson, who uses a full fleet of computer tools and programs, including e-mail, which is critical to client contact; computer presentations for listing pitches; and spreadsheets to keep track of the money. She also uses computer-publishing tools for fliers, Web sites and labels.

After 15 years as a low-tech agent, she did her first Web site about 2 1/2 years ago. After a few months in 1996, Wolfson netted 13 sales directly attributable to the Internet--a precursor of things to come. In 1997, she had 31 sales totaling about $4.2 million. And in 1998, she had 32 sales worth about $6 million.

“Let me put it this way: If the Internet disappeared, I’d retire,” Wolfson said.

Similarly, Virginia Re/Max broker Bob Blount has recently tied together his office with high-speed telecommunication lines so agents can use the company network and software from work stations, offices, conference rooms and home or other remote locations.

“Agents are able to run personal networks with their staffs using our wiring,” Blount said. “They also may run their personal production software on our servers, allowing simultaneous users at multiple physical locations.”

His office also creates Internet sites for each agent and offers free e-mail and online access, use of any software running on the network and low-cost marketing materials produced in-house. Providing state-of-the-art technology--and teaching agents how to use it most effectively--has been a key strategy for Blount’s firm.

Realtor Jerry Fowler realized three years ago that to remain at the top of his game in the Columbia, S.C., real estate market, he would have to reinvent himself on the Internet.

He found a company to help him build and maintain a Web site and opened the virtual door for business.

The result has been a steady migration of Fowler’s business to the Web. In 1998, he closed 39 homes off Internet leads.

Though Wolfson, Blount and Fowler may have seemed like pioneers years ago, today they have set a standard for technology investment that other firms must follow.

Agents who are technologically fit and connected are more productive and have an edge in the marketplace.

Faced with this technology challenge, many brokers and agents who are notoriously undercapitalized are choosing to exit the business.

Good market or not, the rules of competition are changing.

Bradley J. Inman is a syndicated columnist based in Oakland.