Housing market prompts Realtor rebound
Number of real estate agents rises with home salesJuly 14th, 2016
With home sales increasing here, so too is the number of active real estate agents.
Rob Higgins, executive officer of the Spokane Association of Realtors, says membership in the association has increased this year to about 1,700, up 6 percent from last year.
Higgins says he expects that number to continue to grow at a modest rate over the next few years, depending on the economy.
“We saw our peak membership in 2007 before the Recession, with about 2,250 members,” he says. “Our lowest membership was probably around 2012, with about 1,300 members.”
Higgins says the association’s membership growth usually follows the market pretty closely, and with home sales up, the number of agents again is mirroring that trend.
“We’ve seen a significant sales increase in the last year,” says Higgins. “Which I think is somewhat of a surprise given the tightness of inventory right now.”
The association reports sales are up 4.1 percent compared to last year at this time, with a total of 3,265 closed sales of single-family homes reported through the Spokane Multiple Listing Service through June 2016. Inventory is reported to be down 15.6 percent compared to last June, with current inventory being about 2,081 properties, or a less-than-three-month supply.
“Inventory is as tight as I’ve ever seen it, which could dampen our membership growth somewhat,” says Higgins. “With less inventory, it’s harder to meet demand, and less experienced agents might find it harder to keep up.”
Susie Luby, office group administrator here with John L. Scott Real Estate and the association’s current president, agrees, saying, “When inventory is tight, sometimes it gets tough. It’s a seller’s market right now, so buyers need those more experienced agents who have the skills to negotiate and make the best offer, the one the seller will accept out of five or six put forth.”
The association also reports home sale prices are up, with the median home sales price in Spokane County for June reaching $196,975, up 6.5 percent from the year-earlier month, when the median price was $184,900.
“Overall, the number of homes being purchased and sold will always dictate the number of agents in the industry to some extent,” says Luby.
The rise in the association’s membership is in line with a statewide increase in the number of licensed real estate agents, says Christine Anthony, spokeswoman for the Washington state Department of Licensing.
Anthony says there were 34,788 active agents in the state as of June 2016, a 6.5 percent increase from the 32,678 agents a year earlier.
Higgins says real estate is a tough business to break into as a new agent.
He says most of the Spokane Association of Realtors’ membership can be divided into three groups: active agents, somewhat active agents, and those with a license who occasionally sell homes but have other sources of income.
“It’s a tough career to depend on, and to get started you definitely have to have some money saved up,” he says. “Everyone starts the year at zero, and it takes time to begin making sales.”
Unlike most professionals, who are able to bill clients at an hourly rate or present an invoice at the end of a project, real estate professionals are paid at the end of a sales transaction.
Two agents are involved in most home sale transactions, one representing the seller and the other representing the buyer. Both agents work for a real estate broker, who determines how the agent will be compensated; typically this is in the form of a percentage—usually 5 to 8 percent—of the sale price of the home.
As a result, when sales are slow, some agents might find it too expensive to keep their licenses updated and membership dues paid.
Agents must renew their licenses every two years at a cost of $146. In addition, members of the Spokane Association of Realtors pay annual dues of $550, which also covers membership fees in Washington Realtors, which is the state association, and in the National Association of Realtors.
Most members here also pay $44 a month to subscribe to the Multiple Listing Service, which provides descriptions of all homes listed for sale in the Spokane metropolitan area by participating real estate brokers.
“It takes a certain type of person to be good at it, and those who are truly successful are those who really enjoy it,” says Higgins.
Luby says she has found that people tend to consider starting careers in real estate in times when the market is doing well.
“When the market is strong with people buying and selling homes, it leads to conversations about careers in real estate. This can give people the perception that it’s an easy business,” she says. “The reality is we do a lot of wonderful work, helping people with one of the biggest, most emotional purchases of their lives, but it’s not always quite as easy as people think.”
Luby says she’s thrilled to see younger people entering the industry, especially as the older generation of real estate agents nears retirement.
“We’re an aging population, so it’s a good thing to see some ebb and flow to the industry,” she says.
Data from the Department of Licensing show that 47 percent of active licensed agents in Washington state are 51 to 66 years old. About 33 percent are 36 to 50 years old, with the remaining 20 percent accounting for agents 35 or younger.
Luby says while many newer agents come in with strong knowledge of and comfortability with technology, older agents often have more established one-on-one customer service experience.
“It’s exciting to be bringing youth and new ideas into the equation, but ultimately, this is a business about building relationships,” she says. “Whether buying or selling, people like to be talking with someone they can trust, so it’s our job to make sure new agents are trained effectively and working hard to develop those relationships.”
Paul Cassel is among Spokane’s newer real estate agents. Having earned his license a few months ago, Cassel, 37, began working as a real estate agent with Synergy Properties last month.
“What I enjoy about this job is that the schedule is somewhat flexible, and the pay is good if you’re willing to put in the work,” he says.
Cassel says he, too, sees the increase in real estate agents as a reflection of the strong market.
“It’s pretty hot right now. A lot of people are buying homes. Another part of it is connected to low interest rates, with more people qualifying for financing,” he says.
Although he is new to being an agent, Cassel has 10 years of experience in real estate investment, working with his business partner Keith Riddle, who is also managing broker for Synergy Properties.
Synergy Properties is located in what used to be the North Hill Masonic Temple at 706 W. Garland. Cassel and Riddle bought the property in 2014 and have been working to remodel it for use as Synergy’s offices and also hope to eventually use some of the space for a restaurant.
“We bought this building together, and the plan was always for me to eventually come and join the Synergy team when the time was right,” says Cassel.
Originally from Spokane, Cassel is a graduate of Mead High School, and holds a bachelor’s degree in commercial aviation from the University of North Dakota’s John D. Odegard School of Aerospace Sciences. Cassel spent time working as a flight instructor for the university, as well as a border patrol agent, and as an air interdiction agent for the U.S. Department of Homeland Security, before returning to Spokane to work as a real estate agent.
Cassel says as a new agent, he is asking questions constantly and studying the inner workings of the industry.
“You have to have a really good work ethic, ask questions, keep up on communication, and make yourself available,” he says. “This is definitely a business that’s about creating relationships. A home is a huge purchase, and it can be really rewarding to work with people to find the right property. If the working relationship isn’t a good fit, that experience won’t be a very good one.”
Cassel says he sees the area’s current low inventory as a challenge for both newer and more established agents.
“It helps to make sure your buyer is prequalified and ready to make an offer, because these homes go pretty quickly sometimes,” he says. “Being willing to work, and keeping up good communication are definitely the keys to being successful in this industry.”