When the pandemic hit last year, more professionals suddenly shifted careers and tried their luck in the real estate industry. During the past few months, the United States has recorded an increasing number of real estate agents while inventory for houses for sale depletes.
Based on the data provided by the National Association of Realtors (NAR), by the end of January 2021, there are only 1.04 million homes available in the market - a 26% decrease from the number recorded last year. This figure is the lowest registered number of houses for sale since 1982.
According to NAR -a trade association for residential real estate agents and brokers in the United States, while the house for sale inventory shrinks, their members blew up by 4.8% or a total of 1.45 million members in the same month earlier this year.
These numbers only show how the increasing prices of homes for sale encourage professionals to join and try their luck at the real estate market.
Why People Jump to Real Estate Career?
While most agents and brokers are pursuing their passion in selling homes and properties, the COVID-19 pandemic played a huge factor in increasing the number of professionals trying to enter the world of home selling.
The health crisis resulted in millions of job termination, especially in the restaurant and hospitality industry. The booming housing market made the job more appealing as the increase in home prices means more money, a.k.a commission.
Aside from the pandemic, most states do not require tedious procedures in taking a course and passing an exam to secure a residential real estate license. State licensing exams only include questions of property laws and market analysis.
Re/Max chief customer officer Nick Bailey suggests the easy qualifications made it easy for aspiring agents to secure a license and sell homes immediately.
"There are very low barriers to entry, in terms of the ease of getting a real estate license," Bailey said.
"But the barriers to success are very high," he added.
Newbie Agents Challenge
While shifting careers as real estate agents has become a trend nowadays, the easy route does not always come easy for the housing newbies. It is because potential homebuyers still favor agents with years of experience and a proven sales record.
New real estate agents struggle to get an offer accepted, on top of the current problem in the low house for sale inventory. At the beginning of their career, these neophyte agents get little to no money because they don't get a paycheck unless a sale is completed and would often only rely on their commission.
According to The Wall Street Journal, realtors with two years of less experience only earn a median gross income of $8,900 from their work in 2019.
Micheal Mitchell from Boston is one of the real estate newbies struggling in the industry. After getting laid off from a managerial position at a regional restaurant chain, Mitchell signed up for a real estate course in June.
He is very optimistic in his newfound career, thinking his years of customer service experience in the past 30 years is the key to success in the real estate world. He secured his license in October 2020 but has yet to close any deals. Mitchell blames the COVID-19 restrictions limiting face-to-face interaction as the hurdle to his success.
"I've learned some aspects of the business, but it's hard to connect with people...that you've never met," Mr. Mitchell said.