Two weeks gone; 50 more to go until we’re done with 2015. Relax, we have plenty of time to do well. Right? Wrong! If in doubt, remember one rule that always served me right through the years: if you start fast & strong, chances are you will have a good finish and a banner-year. If, however, you take your sweet time to get going, good luck, you might be a few trains late to get to where you want to go.
Those of us who are in sales (isn’t everybody?) feel the pressure at this time of the year. We know what we have accomplished over the previous 12 months, but the next 12 are largely unknown. Depends who we are. Depends on how prepared we are for another run at success. Some feel the pressure because they are excited about starting with a big bang. Some feel the pressure because they have no idea what’s going to happen to them.
There is just a hair over 1.1 million Realtors in the US at this point. It’s more than 11 times what we had in 1970 (only 94,625) and about 6% more than what we had last year, which seems to indicate that those who got their license in 2014 were/are optimistic about their chances to strike gold going forward. However big the present count is, it is actually down 19% from a record 1,357,732 Realtors established in 2006.
Of course the billion dollar questions this year are: how many of all those “active” real estate pros will finish the new year with a better bottom line than what they achieved last year? And how many will still be around on December 31st?
These questions are pretty much the same questions we have in mind every year, although it always takes a full year to get the final answers. The reasons for the ever-lasting uncertainty (aside from the preparedness, the skills and the motivation of the agents), are the fast changing market conditions and the even greater market variations between states and regions.
We know that Realtors were not born equal and that differences tend to further increase with time. Forever, it seems, we have assumed that the 80/20 rule would be a fact of life in the business. Well, not so fast. We may have to revise our thinking. A new study by the very serious WAV Group –kind of an industry think tank-, shows that last year was more in line with a 60/40 rule. Productivity among the ranks increased a bit; more agents participated in the success story. Game changer?
According to the survey, roughly 60% of the Realtors put transactions on the books in 2014. It is a bit of a surprise since the market, if nothing else, was more challenging: less sales (especially distressed sales) and a double-digit appreciation in most regions, in other words a market tailor-made for full-time & experienced local experts. Well, maybe lots of newcomers were harder at work and eager to win.
When you look at the numbers more closely, as Marilyn Wilson did for the purpose of the survey, there seems to be a direct correlation between the number of Realtors who do business and those who login daily to the MLS system. Perhaps the newly licensed agents or those weaker agents who are re-committing to the business, are more technology savvy or more serious about keeping in touch with the market data.
Statistically, 4 out of 10 Realtors are neither listing nor selling property at this point. During the first 6 months of 2014, 7% of the agents had between 11 and 20 transactions; 3% had between 21 and 50; 1% sold in excess of 51 properties!
My guess is that, at the high-end, the productivity ratio is quite different from what we can observe when looking at the overall market. Last year’ 60/40 rule and the traditional 80/20 rule don’t come close to illustrating the reality of the marketplace. At the top of the price ladder, in the multi-million dollar range, the going rule looks more like 90/10, if not 95/5 at the listing-end! There are only so many top guns in any area and they are awfully good at keeping the most precious turf to themselves.