Turmoil in the real estate market appears to be having another impact besides affecting prices, as the number of new real estate salespeople entering the profession for the first time in recent memory stalled last year.
For the five boroughs, the number of salespeople, who enter at the lower ranks of the profession and are less experienced than licensed brokers, was flat for 2007. Meanwhile, the number of brokers was up 4.8 percent for the year, likely a sign existing salespeople are taking the higher level of licensing as the market grows more competitive.
“People considering careers in real estate are reading all the negative publicity about the market and the mortgage situation, and it’s turning them off,” says Phyllis Pezenik, vice president of residential sales for DJK Residential. “There are fewer people wanting to become salespeople, but agents who have been established for some time are now able to apply for broker’s licenses.”
Statistics from the New York Department of State show that the number of salespeople in New York City in 2007 was 42,248, down 0.1 percent from 42,293 in 2006. That’s a departure from the profession’s past popularity. Of the five boroughs, Manhattan showed the largest uptick, at 0.6 percent, while Staten Island saw a steep 6.4 percent drop-off.
Staten Island also saw the smallest growth in its broker ranks, while Manhattan and Brooklyn saw the strongest. While the total number of brokers in all of New York City in 2007 was 25,529, up 4.8 percent from 24,354 in 2006, Manhattan broker ranks increased 6 percent for 2007 and Brooklyn increased 6.2 percent. Staten Island increased its broker ranks by a mere 1.8 percent, to 1,166 brokers.
One side effect of decreasing interest in the real estate profession: shorter waits to take the real estate licensing exam and, consequently, less competition in at least one part of a very competitive arena.
“A few years ago, there was so much hype about the real estate business, it was hard to get an appointment to take a test with the state; people were two- and three-deep trying to get licenses,” says Pezenik.
In order to become brokers, licensed salespeople must accumulate points through sales and rentals, a process that takes about two years and ensures that those who are going for broker’s licenses are already experienced agents.
Some feel the downturn in the U.S. housing market is weeding out the less-talented salespeople and brokers.
“Opportunities are created through markets like this,” says Jeffrey Roseman, executive vice president at Newmark Knight Frank Retail. “To compete in this business, you have to be able to communicate with the customers, understand real estate trends and market conditions, and know who the players are in all the markets. The days of a person calling a number off a sign and a broker with his feet on the desk taking the call are gone.”
Adds Fernanda Forman, a managing director at Bond New York, “People often enter this profession by default—they’re out of a job or just graduated and don’t know what else to do. When there’s a bump in the road there’s always a shift, and it’s not really a bad thing. Agents who leave under those circumstances are either not making it or not serious about the job.”