At the end of July, the National Association of Realtors (NAR) had nearly 1.6 million members, which works out to about 2.4 Realtors for every home actively for sale. A report from the Consumer Federation of America (CFA) notes the surfeit of agents is costing the industry, harming consumers, and reinforcing high commission rates.
Lenient licensing requirements and high real estate agent turnover mean many of these agents are inexperienced and underqualified. Of those who are competent, even fewer have the knowledge and experience to serve real estate investors.
Demand for homes surged during the pandemic, which made real estate look like an attractive career opportunity. Layoffs in other industries left job seekers looking for new career options, and many of these people needed more flexible work arrangements.
And the path to getting a real estate license is quick and easy in most states relative to other professions. According to the National Association of Realtors, more than 156,000 people became real estate agents in 2020 and 2021, a 60% increase from the prior two years.
Of course, many of those real estate agents won’t last in the field. “Being successful in real estate is a hustle, and most people drop out after two years because of how difficult it can be to build a sustainable business,” says Kristina Morales, a Realtor with over 20 years of experience in multiple markets. “This alone naturally reduces the number of Realtors, but they are quickly replaced with new ones since the barrier to entry is so low.”
The NAR views the turnover as a healthy consequence of competition. But while the industry may naturally spit out the real estate agents who aren’t cut out for the job, it doesn’t necessarily happen before these agents have provided homebuyers with guidance on what may be the most significant purchase of their lives.
The Draw of the Real Estate Profession
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