Sunday, September 19, 2010

ONE IN FIVE COLORADO REALTORS HAVE LEFT THE BUSINESS SINCE 2007

The National Association of Realtors reported this week that its membership in Colorado has fallen more than 21% in the past three years, from 27,000 dues-paying Realtors in 2007 to fewer than 22,000 today.  In a related item, the Colorado Association of Realtors has announced that after 90 consecutive years of holding its annual convention at The Broadmoor Hotel in Colorado Springs, CAR is terminating its contract with The Broadmoor after this year.

These are hard times for Realtors, as they are for all of us.  This market is not an easy one, and I've heard more than one agent this year say "It's just not worth it anymore."  Reluctant buyers, underwater sellers, underwriters who are terrified of making a mistake, appraisers who appraise too conservatively... it all adds up and takes a toll. 

Putting deals together is hard.  Holding them together is even harder. 

When I was a broker in California (1994-2005), everyone felt like a winner.  Sellers were pocketing huge equity gains.  Buyers felt like they were acquiring an asset that would appreciate 8 to 10% per year.  Agents were making excellent money.  It was a party.

Today, the reality is 180 degrees different.  Buyers are afraid of making mistakes and often grind hard on sellers every step of the way.  Many sellers have lost money, or worse yet, owe more on their home than it is worth.  They don't want to negotiate and they don't want to fix things.  Agents are stuck in the middle, with the chasm between buyer expectations and seller perceptions farther apart than ever before. 

Then there's bank-owned inventory, which is usually priced attractively but often full of deferred maintenance.  Appraisers call out condition items that need to fixed.  Banks don't fix anything.  Buyers don't have money for repairs.  Agents are stuck in the middle, again, having to find solutions. 

There is not a drop of glamour in real estate these days.

Having said that, there is a clear silver lining for the committed among us.  The consolidation going on right now is clearing part-timers out of the business, and it's driving marginally qualified agents to the sidelines.  Never in my 16 years as a broker have I seen a market which called for more persistence, creativity, innovation and skill. 

The GOOD agents, the ones who work 50-plus hours a week and look out for their clients, are going to ultimately benefit from this thinning of the herd.  Consumers are going to do better, as well.

Like you, we in the business are having to do more with less.  Those agents intent on making it to the other side are working harder, longer and with profit margins that are paper thin (if there's any profit at all).

As for me, I'm busy planning my next client appreciation party and working hard to close the deals in my pipeline today.  I'm making phone calls and holding open houses.  I'm communicating with my sellers and coaching and counseling my buyers.

Because experience has taught me that there is always business if you are excellent at what you do and that satisfied clients are like gold (because of the referrals they send), especially in tough times.

Again, I'm not complaining.  I'm just telling you how the market is affecting the brokerage community.  And I'm explaining why that agent who sold you your house three years ago may not be returning your call.