Posted on 09/18/2006 9:10:42 AM PDT by Hydroshock
NEW YORK (Reuters) - They are jumping ship or receiving the pink slip. America's real estate agents and mortgage lenders, that is.
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Now that the glory days of the most recent U.S. housing market are over, its deterioration is taking a toll on employees who profited from its record-breaking five-year run.
With home sales slumping and loan demand diminishing, layoff announcements and resignations have become increasingly common, evidence that the sector's slump is broad.
Carmen Cook, a veteran real estate broker, saw the writing on the wall and decided to retire earlier this year.
"The market changed and my job became more difficult," she said. "I was working just as hard and the income wasn't coming in."
Cook earned up to $135,000 a year during the housing market's boom as a broker and vice president at Halstead Property, a real estate firm in New York. When her commissions fell by around 50 percent, she decided it was time to quit.
"All the brokers are hustling right now, but the income is not coming in the way they are accustomed to," she said.
The lending industry is also seeing an exodus of employees.
"There were a lot of people who ran into this industry over the past few years because it was the hottest thing around, but you are not going to see that now," said Scott J. Cooper, president of Old Merchants Mortgage Bankers in Lake Success, New York.
"We have seen more attrition," he said. "Everything has gotten harder, no question about it."
While many people are opting to voluntarily exit their companies, some housing-related employees are being forced out the door through layoffs, a trend that has increased dramatically this year.
Real estate industry job cut announcements totaled 3,033 year-to-date through August, a nearly 96 percent surge over the same period in 2005, according to Challenger, Gray & Christmas, Inc., an employment consulting firm based in Chicago.
The mortgage lending industry has not fared much better, with layoff announcements totaling 8,513 during the same period, a rise of over 70 percent year-over-year, according to data provided by the company.
HEYDAY OVER
The U.S. housing market's boom undoubtedly benefited U.S. homeowners, but it also supported the economy's recovery from a recession. During this time, housing-related jobs flourished, perhaps more than any other field.
Employment in the real estate and mortgage industry peaked at 504,800 in February, according to the Bureau of Labor Statistics. In June employment was at 503,100, a noteworthy decline given that the sector gained jobs at a rapid pace for most of 2001 through 2005.
In May of 2001, essentially when jobs started gaining, 290,800 people were employed in the two industries.
Paul Hindman, a head hunter for mortgage lending positions at Management Advisors International in Hickory, North Carolina, estimates that 30 percent of sales forces are people who hop on board when business is thriving, but are quick to throw in the towel when it wanes.
"In a refinancing boom, everybody joins in because you don't have to work hard to get the deal and those types of individuals don't do well in this type of market," he said.
Hindman said lenders have become pickier and are taking their time in their search for the right candidate.
"On the corporate and back-office side, companies are being very diligent in their hiring," he said.
The Mortgage Bankers Association, an industry trade group, expects total loan originations to fall by 18 percent in 2006 to $2.4 trillion versus 2005.
"There will be some decline in employment, but it is not going to be the 18 percent decline we're seeing in originations," said Michael Fratantoni, a senior director of research and economics at the MBA.
SURVIVAL OF THE FITTEST
Peter Morici, economist and professor at the University of Maryland's Robert H. Smith School of Business, views the downsizing of employment as a good development.
"Over the last year or so, we probably have not been getting overly qualified people," he said.
Therefore, as business volume continues to drop, the weak will get weaker and the strong will get stronger. "When things shake out it is going to be the better sales men and women that will stay," he said. "They are the ones who have built a reputation over time."
Eloise Johnson, a broker and senior vice president at Halstead Property, realizes that the housing market is cyclical in nature, which is why she has stayed in the business for more than 20 years.
"Real estate always comes back from any slowdown or recession and goes on to achieve higher levels," she said. "It is important to remember that while a slowdown can be difficult for many real estate brokers, it also can be an opportunity to build a business."
Cook, who retired from Halstead this year, has no regrets. She now spends her time traveling with her husband, author Peter Fusaro.
ping
Bingo.
Looks like the strategic deployment of more "affordable housing" might be needed to chase people out of their neighborhoods.
like the Dot.Com thing, some hit good, some hit big, but most lost out
Works for me. I'm still doing OK, granted, I'll concede that things are tougher, but as the exodus continues, I will have a larger pool of business.
:-)
Around the metro area here in Minnesota, there are more real estate agents than houses for sale, and it's been that way for some time.
I'm expecting some to drop out of the business, at least temporarily. Lots of housewives have their real estate licence, but don't really manage to sell any houses, or maybe one a year or so. I think they're going bye-bye for now.
The ones that stay are the ones who are generally best at it in the first place. They are good enough at their jobs to weather the storm.
>>Real estate always comes back from any slowdown or recession and goes on to achieve higher levels
Bingo.<
Yep. The stock market does the same. Well, sort of. The "credit inflated" stock market runnup of 1929 reached its "pre-crash" level in the late 1950's. We will see, after it finds bottom, how long it takes this "credit inflated" housing market runnup to reach it's "pre-crash" (or "soft landing", nyuck, nyuck) levels.
It'll be fun! Things are happening so fast, it's like living in a movie!
"The ones that stay are the ones who are generally best at it in the first place. They are good enough at their jobs to weather the storm.
"
Yup. Agents who work hard at the job do just fine. It's the wannabes who are going to lose out in this buyer's market.
When my wife and I were looking for a house here in Saint Paul, we saw one driving around that looked interesting. I pulled my cell phone and called the broker who had his name on the sign. Answering machine. I left my number and the address of the house.
He never called back. The house was still for sale a month later. I never did figure that one out.
We ended up buying a house we visited at an open house. The realtor there, a young woman, took us seriously when we said we wanted to make an offer on a house that week. The next day, she took us to a bunch of houses, even though she was the listing agent on the house where the open house was. We liked that first house best, so we bought it, and she was great about the whole process.
She worked her butt off to sell us a house. Several other agents ignored us when we told them we were buying a house that week and would be paying for it with cash from the sale of our house in California. They just couldn't be bothered to show us other houses.
Amazing. They deserve to go out of business.
Actually, I think you're being sarcastic, but from what I see you can't live on 67k in NYC. Not in Manhattan, anyway. Maybe in the ghetto.
I do mortgages, and it's the same way. I talk to countless people who I can help with a loan quite easily that say their previous "mortgage guy" never calls them back. I guess that leaves more for me!
me ? sarcastic ? - did she quit a 135k a year job because she was only making 67.5k....?
did she find new work ?
for how much ?
was her new employment same industry ?
incomplete anectodal crappola to back up a premise stinks.
sarcastic ? me ?
Anecdotes never usually prove a point, despite certain posters claims otherwise.
That's beyong stupid.
When I was running my business, I told my employees that if someone showed up cash-in-hand, they were to drop everything (except another customer with cash in hand) and get on that prospect--and if the money in question exceeded a certain (relatively low) amount, they were to get me out of my office immediately. (One important rule of small business that a lot of small business owners ignore: customers with a substantial amount of money deserve--and should rightfully expect--to do business directly with the owner. It shows respect, and it ensures that potential problems are identified and worked around quickly.)
I never lost a hot prospect for lack of action. Lost a few because a competitor was able to come up with something that met the prospect's needs more cheaply, more rapidly, or both--but not because my team let moss grow under our feet. And later on, I got some of those prospects back in the door when they needed more than their previously contractor could deliver--and they remembered how we'd worked to earn their business the first time out.
You NEVER blow off a customer with money to spend. Carrying a lot of money around is hard work. You try to relieve that customer of the burden of carrying all that money and give him a quality product that meets his needs as fast as you can.
I just cannot fathom what was going on in your case.
Poor time management, mainly. The "I'll call them later" concept. Then they forget...
But we have another S&L type of crisis coming over all the crazy loans made over the last 5 years.
This went up like the false stock market did and could go back equally hard.
There is IMO going to at least be one hell of a recession when the housing/loan collapses sink in.
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