By Mike Bodeen · 31 July 2023
I’ve seen this film played out a few times before in my 45+ year residential real estate career. With every major change in the market and/or real estate technology shift, a market exodus of agents would happen.
The oldsters would say something like, “I’m not buying into this Multiple Listing Service thing – I’m outta here.” Or; “Listings on a computer? What the heck (last two letters changed, or other 4 letter words can be inserted;-) They were all used. Or; “I’m not doing this internet thing this is Bull #@%!”
The current residential real estate market in Phoenix and across the country will be showing the proverbial exit door to more than a few real estate agents coming up at the beginning of 2024. I’m guessing the introduction of AI (Artificial Intelligence) into the real estate way of doing things will be the last straw for some, for sure.
But tech will not be the main driving force of agent departure from the industry. It is (and will be) the market itself. Come January, hefty Realtor annual renewal dues come due. Many agents who haven’t made a sale in the past year-plus, will depart.
Back in the Spring of 1984, with mortgage rates having been in the mid to high teens, I departed real estate for good. I couldn’t make a sale to save my soul – thankfully, the Lord had already done that. For 9 months, I cleaned the toilets of the rich in Incline Village, NV (Lake Tahoe) to make ends meet. I was never going back into commission sales – ever. Thankfully, a local real estate firm’s owner bribed me to come be his manager for a franchised office in Truckee, CA, offering me a salary plus commission, plus sale overrides. I came back.
Though current rates (7%) are well below what they were back then, the same effect occurred as when rates hit the teens in the 80’s. Sales plummeted. (see chart below) Likewise, during the past two years, the same occurred. That (1980’s) precipitated the departure of tens of thousands of agents.
Come 2024, the same will happen across the country, and Phoenix may well lead the charge. If agents believe that sales will increase again shortly, they may hold on for a while. But as we’ve been stating, this does not appear reasonable to believe that’s going to happen soon, if ever.
Wise agents will need to adjust to this new reality and figure out how to build their career on this new course. If not, the next door to open, will show us the way out.