Housing downturn isn't just hard on sellers
For local real estate agents, it's survival of the fittest
Part of the allure of the real estate market is the ability to make a quick buck. For real estate agents in particular, there has historically been the promise of good money and flexible hours.
But according to recently released statistics from the National Association of Realtors, the money for Massachusetts agents isn't that good, and with the housing downturn, it's not likely to get better any time soon.
The 2006 median gross income for a real estate agent in Massachusetts was a paltry $31,700, according to the NAR. The most successful agents, meanwhile, make just over $70,000. In 2003, the median salary was $45,400 in Massachusetts.
Residential darwinism
Residential real estate has become a game of survival of the fittest, according to Leif Rosseland, a Coldwell Banker Residential Brokerage manager based in Worcester. Agents who got into the business in the last five years, "when we were basically order-takers," are getting out, he said.
Peter Certo, manager at Keller Williams Realty in Worcester, said the median wage for agents is being held back by agents who fail to adapt to the current residential market or who aren't being pushed to produce. Instead, some of those agents find themselves competing with, or ignored by, independent brokers who are selling just to keep the office doors open, Certo said.
For Certo, the current market is full of opportunity for agents, but the agents have to do their part.
"If they think they're going to do the same things they were doing three years ago, they're not selling," Certo said.
Those agents "are in a wait-and-see pattern. They think it's going to go back to the way it was, and it is, but it's an eight- or nine-year cycle. They're saying, 'It's bad now, but if I just hang in there.'" In the meantime, Certo, who manages 70 agents around Worcester, said, "I have agents with over 40 listings, and they're selling."
Leif Rosseland, a Coldwell Banker Residential Brokerage manager based in Worcester.Adapt to survive
James Wetzel, executive vice president of the Worcester Regional Association of Realtors, said real estate agents on the whole have never been more than "moderate income" employees, but these days, there is a little more "survival of the fittest" involved.
Even the fittest are seeing their pay take a bit of a dip, however.
Veteran sellers "know how to change with the market, and now they're starting to concentrate on the buyer's end," said Rosseland. Coldwell has offered classes on "proper pricing strategy in a changing market" to help its agents, but homes are staying on the market four times as long as they were just a couple of years ago, he said. "And that impacts agent income" especially "agents that didn't learn enough about the changing market."
Agencies and brokers offer different services, and operate under different business models, but typically, a selling agent splits his or her commission with the buyer's agent when a home sells.
Lately, real estate commissions have hovered around 3 percent, Wetzel said.
"And on top of that, there are fees. Business fees, desk usage fees; when you whittle it all away, you can see why there's not much left," Wetzel said.
Pay "has always been kind of low, and a lot of turnover, too," Wetzel said. The current residential market is simply making those characteristics of the business more pronounced.
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