Chicago’s herd of real estate agents is thinning — by thousands of agents — as the housing market grinds through the slowdown.
The number of active agents in the Chicago area in the fourth quarter last year was down 24 percent from the previous year, according to AgentStory, a company that monitors real estate agents and their transactions. There were about 7,200 active agents in the fourth quarter, down from 9,600 at the same time in 2021, which capped off an epic year for residential real estate across the nation.
The report defines an active agent as any agent that has a listing or co-listing as well as buyer agents who participate in a residential transaction during the quarter.
Most of the dropout occurred in only the last six months, highlighting the rapid impact on the jump in the size of interest rate increases to 75 basis points that the Federal Reserve started implementing in June after making smaller hikes previously. In the third quarter last year, there were 9,048 active agents, meaning the area’s market participation fell by more than 1,800 agents in the fourth quarter from the months prior.
The data only accounts for agents who have closed deals, meaning deals under contract but not completed weren’t counted.
The data accounts for some range throughout each year, as deals ramp up during the second and third quarter of every year, when agents are most active and the market is at its yearly peak. In the second quarter of both 2021 and 2022, there were more than 10,900 active agents.
It shows the constriction of the real estate market, though it can be challenging to track employment numbers for agents. Most residential real estate agents are independent contractors, so they aren’t subject to layoffs as the market slows.
While agents may remain registered to do business even when they are inactive, the data from AgentStory provides an early sign of the amount of potential fallout the real estate market could experience after people rushed into the industry during the pandemic-fueled boom in residential business, pushing the number of registered agents to an all-time high across the country.
Even in the spring of 2021, which was a banner year for the residential real estate market, there were more agents than homes for sale, as the barriers for entry into the industry remain low while it’s still difficult to develop a consistent flow of business.
Mike Golden, Co-founder and co-CEO of @properties said in an interview last year that it’s common for agents who joined the profession during the peak of the market to depart as the pace of buying and selling slows.