05th Apr 2008
Realtor Survives Recession as Cab Driver
There more than half a million realtors in California, but their numbers are declining in the recession as they shift careers. Former realtor Jaime Gutierrez now drives a cab.:
Gutierrez, the cab driver, said he’s glad he had his first career to fall back on. Now, in addition to driving his cab, he has a new second job: a substitute teacher.
He said he figures there will always be a need for subs, even if it doesn’t pay as well as real estate.
“My income level did double,” Gutierrez said of his time in real estate. “But there was a lot of hang time in between paychecks. I was fortunate to have another job to do at nights and weekends to keep the bills paid.”
As with other kinds of independent contracting, the time between starting the work and getting paid can be the biggest challenge to surviving the profession.
As West Toronto realtor I hope my colleagues in US will get over this recession soon. On the other hand, I believe this is time, when market cleans itself from the let’s say “less skilled” realtors and only real professionals will survive. And it will help to improve the market quality in the future. Because real estate is just job for one, but life for somebody else…
I’m not sure the trend can be read as survival of the fittest in realty. According to the article, it seems like many who left the profession were actually long-timers, although the man featured was relatively new.
I kind of agree with West Toronto. The market was doing very well, and a lot of people became agents because it seemed a good way to make money. I know several people who, in the last five years, have become agents. According to the National Association of Realtors, the number of licensed realtors who are members of NAR increased by 50% between 2002 and 2006.
But the softening market just won’t bear them all out. Whether experienced or less experienced agents will be most affected, I can’t say; though, I would guess an agent who has been around for 20 years would know better what to do when the going gets tough - and that might include getting second or third jobs. Multiple streams of income is pretty crucial for any independent contractor. My dad has two or three jobs. My mom has three jobs. My husband (a programmer) moonlights from time to time, too.
Just the fact that California has “half a million” agents leaves me wondering. There are only 2.6 million agents in the whole country! Why does California have 1/5 of all the agents? That’s not proportionate to its population. 1 out of every 50 adults in CA is an agent? Maybe the market there is more brisk than in other states, but still …. The numbers have not been like that for long.
References: http://www.realestatejournal.com/buysell/agentsandbrokers/20060829-hoak.html
http://www.therealestatebloggers.com/2007/05/26/1-in-50-now-an-licensed-agent-in-california-will-the-madness-never-end/
Oh, I meant to add: I was watching a CNBC interview with Warren Buffett yesterday, and he mentioned the real estate industry. He commented on how Dade (and another) County had ten times the number of listings, and only 1/2 the number of sales as compared to a year ago. He stated these in actual numbers, but I’ve forgotten the exact figures.
Also, for what it’s worth, Buffett believes we’re in a recession. It’s nice to hear someone “up there” actually acknowledge that. If I see one more headline at the newspaper stand that says, “Recession a Possibility” or some other delusion, I’m going to scream.
I can’t get my math to match up with the 1 in 50 figure. If there are 36 million people in California and a half million realtors, the ratio of realtors to people can’t be 1 in 50, but more like 1 in 72, right? I’m rounding, and I believe that’s still a lot of realtors, but the point the article seemed to make is that it’s not necessarily survival of the fittest in terms of who stays as a realtor. It seems that some of the “fittest” realtors were getting out permanently. Though examining what “fittest” means is sort of interesting in realty, because I think it’s not so much the sales ability as the multiple sources of income, as you point out Hafidha.
My husband and father-in-law are both realtors in NY state. The only thing that is separating the “fittest” from the “not-so-fit” is how much savings they’ve already acquired during the boom. Even my father-in-law– a “three-figures earning, top of the class” realtor–is struggling as the market sits at a stand-still (no more three-figures), and luckily has his work as county legislator to fall back on, (as well as savings, investments, etc. from those hot market years..). My husband– a relative newcomer to the real estate field– is now looking for full-time teaching (his other profession…), and if he happens to sell a house–that’s great–but we’re not staking our futures on it!
i meant 6-figures, of course…
That sounds pretty similar to the rest of us.
Ms T - I think the 1 in 50 figure was only taking into account adults. One of the articles I read (I might not have referenced it) stated “1 in 52 adults in California.”
The market is just so bad right now - there aren’t enough sales. Regardless of how much work one puts in as an agent, there is less revenue now than before. Less money for everyone, except maybe a privileged few. And even beyond residential properties, I’ve noticed a LOT more “for lease” signs up in the strip malls. Even whilst construction commences on new strip malls. Not good.
I’m sure there’s plenty of money for war. We just borrow from China.
We were thinking of selling out house 3-6 months ago, but a similar house on the block wasn’t selling, and the price kept dropping, and now it’s foreclosed and local teenagers have sex in it. This story has no moral.
Ms. T @ 10 - Was it wrong that I chuckled out loud at that? Maybe I have no moral, either.
No, I meant to be funny. You’re okay. But there’s just no moral. Sell a year or two ago? Rake in some bucks. Try to sell now? Local teens take over your foreclosed home.
Um, yeah. I’m a day care provider and I really have to hustle to get business. We haven’t felt the crunch of the economy yet, except for not being able to refinace our house we bought a year ago. We owe more than it is currently worth and pay an outrageous mortgage. There are forecloseures left and right in Sac.