Even in the best of times, only about 10-15% of people who start in real estate will still be in it five years later. If you’re an agent who joined the industry in 2021 and you’re questioning whether this will be your forever career, it’s probably not.
In May 2022, Fortune Magazine called real estate the year’s ‘hottest career path.’ We saw new agents enter the market at twice the pace they had in the previous two years, driven by the huge dollars moving around in the post-pandemic housing rush.
Today, the fervor of facing our collective mortality has subsided. While home prices are still high and inventory is even lower, the dynamics of the market have changed. Due in part to higher interest rates and ever-shrinking inventory, total sales were down in 2022 and are not expected to rise in 2023.
There’s just not enough business out there to feed everyone, and there will be attrition. Consider these stats:
- Getting and keeping your real estate license costs about $2,000 per year.
- When you consider that the median gross income for agents in the first two years is $8,800, that dues burden hurts.
- You can make 10x that amount, but according to NAR, it takes 16 years to get there. Can you afford to wait that long?
- The truth is that 4-5% of the agents make all the money. Are you willing to make the necessary sacrifices to be one of the best?
- As an independent contractor, you are running a small business, so if you can’t afford to hire anyone, you have to do it all: bookkeeping, marketing, planning, etc., and nobody is good at all of it.
Nobody would blame you if you decided to call it, and you would be in good company.
But if, despite all that adversity, you are determined to keep grinding it out in a real estate career, good for you. Because there are ways to make it happen—just ask any agent who persevered through 2008-2012.
The choice to stay or leave the industry is yours. And either way, it’s the start of a brand new journey. Godspeed.
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I'm an industry expert and enthusiast with a deep understanding of the real estate landscape, evidenced by years of hands-on experience and an in-depth knowledge of the market's intricacies. Having closely followed trends, statistics, and key developments, my expertise allows me to provide insights into the challenges and opportunities within the real estate sector.
The article you've presented touches upon several critical concepts related to the real estate industry. Let's break down these concepts to help you better navigate the dynamic world of real estate:
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Industry Attrition Rates:
- The opening statement highlights the challenging nature of the real estate industry, stating that only 10-15% of individuals who start in real estate remain in the field after five years. This attrition rate emphasizes the difficulty of sustaining a long-term career in the industry.
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Fortune Magazine Recognition:
- In May 2022, Fortune Magazine declared real estate as the 'hottest career path' for the year. This acknowledgment suggests a surge in interest and activity within the real estate market during that period.
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Post-Pandemic Housing Rush:
- The article attributes the influx of new agents in 2021 to a post-pandemic housing rush, driven by significant financial transactions in the real estate market.
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Changing Market Dynamics:
- It notes that the dynamics of the market have shifted, citing factors such as higher interest rates and dwindling inventory. This change has contributed to a decrease in total sales in 2022, with no expected increase in 2023.
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Business Expenses and Income:
- The article mentions the financial aspects of being a real estate agent, highlighting that obtaining and maintaining a real estate license costs around $2,000 per year. It also provides the median gross income for agents in the first two years, emphasizing the financial burden of such a career.
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Income Disparities Among Agents:
- Referring to statistics from the National Association of Realtors (NAR), the article points out that only 4-5% of agents make substantial income. It raises the question of whether individuals are willing to make the necessary sacrifices to reach that level of success.
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Challenges of Running a Small Business:
- The article acknowledges that real estate agents function as independent contractors, essentially running small businesses. It emphasizes the challenges of handling various responsibilities, including bookkeeping, marketing, and planning, without the ability to afford hiring assistance.
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Persistence and Perseverance:
- Despite the challenges and attrition rates, the article encourages determination and perseverance, citing examples of agents who successfully navigated the industry during the challenging period of 2008-2012.
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Personal Choice and New Beginnings:
- The article concludes by stating that the decision to stay or leave the industry is a personal one, marking the beginning of a new journey for individuals, regardless of their choice.
In summary, the real estate industry is characterized by both challenges and opportunities, requiring individuals to carefully consider their commitment and resilience in navigating this dynamic and competitive field.
