Melissa Hipolit of a TriCities.com reported that a real estate school in Johnson City, TN has closed down three branches. It noted that the usual trend where laid off workers go back to school (and add to disguised unemployment eventually) is not happening anymore. Recently, there came a report that reveals an 85 percent drop in the number of people training for a real estate license.
We see several reasons of the drop in the interest to pursue a real estate career.
First and the most obvious, the slump in home sales in major metropolitan areas is discouraging professionals from risking their career plans. Home values are heavily pressured by the high inventory of homes and since consumer confidence is still weak, demand for brokers is also slack.
Second, the number of licensure exams dwindled in anticipation of a gloomier economy. Last year, Jeff Collins of Orange County noted that in California, “The number of real estate license exams has fallen from nearly 16,000 tests taken in September to just over 2,600 in March. Exams peaked at 22,000 in April 2005 and averaged above 13,000 per month after that until September — the first month reflecting the full impact of the credit crunch. Exams plummeted after September to the lowest level since November 2000, state figures show.” It is evident that this trend has continued up to this year.
Third, large banks JPMorgan Chase and Citigroup have cut down brokers and would resort directly to their own mortgage officers this year instead. It’s a disadvantage now that we’re in a buyer’s market but management decisions are crucial in times of austerity plans to tame corporate expenses.
Lastly, it takes a longer time to dispose a property these days. Even short sales are in trouble (some take 2 – 3 months). Therefore, brokers have decided to switch jobs that have a steady pay instead of sweating it out ahead of the competition.
Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.
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