Not long ago, during the peak of the real estate boom, aspiring agents would camp outside the state Division of Licensing Services’ Lower Manhattan office to secure spots at licensing exams. The test was given once a week on a first-come, first-serve basis, and demand was so strong that pushing, shoving and even fistfights occurred.
Since real estate has lost some of its sizzle, fewer people are signing up to take the exam, now administered in a more civil manner online. Also, fewer real estate pros are renewing their licenses after their two-year expiration period. The result is the first drop in the number of licensed agents — and brokers — in several years.
The industry may continue to become less crowded, since stiffer licensing requirements enacted by New York State go into effect this summer, which may cause even fewer people to decide to renew.
While there are still more brokers and agents showing property than at the peak of the boom in 2005, when the state had 146,325 active licenses, the number of people taking the exam has dropped more than 8 percent since then.
According to figures provided by the Department of State, the number of licenses statewide has dropped by 1,736 in just over two months, to 153,467, compared to an increase of 2,764 last year.
Other states report the same trend: California, Florida and New Jersey also saw a drop in licenses over the past two months. New Jersey had the highest recent decrease of 4.6 percent, or 4,387 licenses, despite a slight increase in the number of licensees over last year.
The Association of Real Estate License Law Officials (ARELLO) has noted that nationwide, licensed agents and brokers increased by 11 percent between the fall of 2006 and the fall of 2007. The association won’t compile new national figures until this fall.
“We have not seen the number of real estate licensees going down; it’s actually been consistently increasing over the past few years despite the media reports that the housing market is so bad,” said Debbie
Campagnola, CEO of ARELLO. “For whatever reason or phenomenon, we find that the total overall numbers across the country are rising.”
Diane Levine, Sotheby’s Downtown Manhattan brokerage manager, said the number of aspiring agents and brokers could increase for a time after the economy goes sour. “When you lose your job, it’s something very easy to get into without having to go back to school,” she said.
“Every week now we still get calls, probably about two a week, from people who took the exam and are looking to be sponsored,” said Levine. “People still think of real estate, especially in Manhattan, as being OK.”
Starting in July, sales agents and brokers will have to take 30 more hours of approved classes to obtain a license.
Levine said she recently reviewed a draft of the new Modern Real Estate Practice in New York, the definitive study guide for the licensing exam. She said the book would contain new sections particularly applicable to the New York City market on co-ops, condos and investment properties.
Local firms and REBNY pushed for changes in the curriculum to better prepare new professionals for the Manhattan, and increasingly Brooklyn, market, Levine said, adding that city professionals would still have to pass sections on farmland and
oil tankers.
Amy Penzabene, administrative liaison and system coordinator for the state Division of Licensing, said the state still hasn’t finalized the curriculum. “The department reaches out to the industry,” Penzabene said. “But we’re the ones that ultimately approve the curriculum.”
The new test would debut in July, said Penzabene. Currently, 68 percent of
brokers and 62 percent of sales agents pass the exam.