In the mid-2000s, residential real estate brokerages seemed to be sipping from the fountain of youth; that is, staffing their firms with freshly minted college graduates.
Today, though, firms appear to be going with the more fine-wine approach of “older is better” when it comes to bringing on agents, according to brokers, firm managers and teachers at real estate schools.
This brain drain of fresh-out-of-college talent in New York City’s residential real estate world, which has happened over the past few years, is the result of a perfect storm of forces, sources say.
In a still-tight market, many young brokers don’t have Rolodexes stuffed with established contacts, or the financial wherewithal to last through lean times. Also, recruiting newbie brokers right out of college is harder as they look to other, more stable professions. At the same time, analysts say, some unemployed 30-somethings, disillusioned by their experiences with traditional jobs, are signing up to sell apartments.
“The ages are increasing a bit,” said Bill Seto, a longtime broker who teaches licensing classes to aspiring brokers in Manhattan and Queens. He noted that with that shift has come a change in attitude — though that may not be a bad thing.
“There is more sophistication,” Seto said. “These are mature people who are in it for the long haul, versus the young people who don’t have the patience.”
Five years ago, in a 30-person class that Seto taught at the Queens School of Real Estate, 25 of his students were under the age of 30, he said. Today, in a similar-size class that he teaches in Queens (though for the New York Real Estate Institute), the age breakdown is drastically different: Only about three are under the age of 30.
Look at the statistics, and at first blush, brokers may not seem to be much older today than they were last decade.
Nationally, the average age of a licensed real estate salesperson is 54, which hasn’t really budged in years, said Walter Molony, spokesperson for the trade group National Association of Realtors. Those figures are based on an annual survey of NAR’s 1.1 million members, who make up about 60 percent of the country’s brokers.
“Most people come into real estate as a second career,” he said.
The commercial side is similarly senior; the average age of members of the CCIM, a Chicago-based trade group for commercial brokers, is 51, data shows.
But for anybody who has walked into the sales offices of a new condo in the last few years, or even into one of the major brokerages themselves, it may be abundantly clear that New York has many salespeople who are far younger than the national average.
In many ways, this group is epitomized by Michael Shvo, the high-profile broker and developer who was Prudential Douglas Elliman’s top-producing agent in 2003, at the age of 30, before striking out on his own solo career.
And with few exceptions — like Oren Alexander at Elliman — there are few early-20-something brokers emerging as real estate household names like Shvo did. There are, however, lots of young real estate moguls in the making in their 30s (see “Moguls in the making”).
Most of the large New York firms don’t keep track of the ages of their agents, their spokespeople said. Others did not return requests for comment, perhaps because of the sensitivity of the topic.
Even in interviews, brokers were reluctant to analyze the slight age shift of newbie brokers, lest they be accused of age discrimination.
But anecdotally, there is compelling evidence of a swinging pendulum.
In the first few springs after cofounding Charles Rutenberg Realty in 2007, Kathy Braddock would receive about eight queries a month from people under the age of 25 hoping to work in real estate, she said. Last month, she had received just one, an e-mail from a college senior from Florida, said Braddock, who does not tally the average age of her 416 agents, but suspects it’s between 35 and 40.
“When everything was red-hot, everybody and their brother wanted to go into the business,” she said, likening the exuberance to the dot-com craze of the late 1990s, when many underqualified young people tried their hand, unsuccessfully, at day-trading. “And then, boom — everything imploded,” she said.
Indeed, the once-high-flying Shvo seems to have largely vanished from deal-making in New York. A message left at his New York office was not returned.
Today, Braddock will ask young potential salespeople if they have six months of savings on hand; otherwise, they might not make the cut. That financial cushion is needed because of real estate’s “80/20” maxim — 20 percent of brokers make 80 percent of the money, and an extended deal-less stretch can wipe someone out.
Some of Braddock’s more recent hires have included those changing from other careers, such as a former veterinarian and a former coordinator for a fashion TV show.
While mid-career hires are nothing new in real estate, what is new is the fundamental attitude about why they want to sell apartments. That, Braddock said, seems to have changed after the collapse of Lehman in 2008.
In the past, these mid-career types came because they were burned out. Now, they come spooked, because they don’t trust corporate hierarchies anymore.
Simultaneously, the opposite trend seems to be playing out among college grads, who are looking for positions that pay salaries, not commissions.
In many ways, the graying of the profession marks not just a return to the pre-boom years, but the real estate industry of decades ago, said Donna Olshan, president of Olshan Realty, which she founded in 1980 at the age of 24.
“Back then, brokers were a lot of old, matronly ladies,” said Olshan, adding that her 10 agents today are “north of 40.”
If young brokers do want to break into the field, a reasonable focus for them might be rental apartments, which are where their “network” — that is, their friends — are probably living, according to Olshan. Plus, even though “the dollars are not as big, you get paid at a quicker rate,” Olshan said.