Opinion: The industry is positioned for a mass exodus of real estate agents
In the wake of the recent NAR settlement, coupled with persistently sluggish home sales and high interest rates, real estate agents find themselves at a crossroads marked by uncertainty and unease.
Amidst this backdrop, brokerages face a critical task; keeping their agent counts from diminishing. However, with many agents feeling uncertain about their futures, a potential mass exodus from the industry may be looming.
Let’s delve into the data to glean insights into the agent recruitment climate for the pivotal year of 2024. Our analysis begins with an examination of agent mobility over a 15-year period, aiming to discern the influence of home sales on inter-firm transitions.
The data spanning from 2009 to 2023 reveals a notable correlation between the total real estate transactions in the USA, termed national transactions, and the movement of agents between brokerages.
Generally, as national transactions increase, there is a corresponding rise in the number of agents transitioning to different brokerages.
This positive correlation suggests that agents may seek new opportunities during periods of increased market activity, potentially driven by factors such as better commissions or market conditions. Conversely, downturns in national transactions coincide with fewer agents moving between brokerages, indicating a possible inclination to maintain stability during challenging market conditions.
Turning our attention to NAR membership over the same period of time, we observe a pattern consistent with conventional wisdom. When national transactions decline, agent departures from the business are not far behind.
However, a noteworthy temporal lag of approximately one year between the lowest point of national transactions and elevated agent departure is evident. Agents exhibit a tendency to weather the storm for some time or await the expiration of dues obligations before making industry exits.
Notably, our analysis of the NAR Membership trend line suggests that agent departures have yet to fully align with the trajectory of home sales, warning of a potential escalation in departures in 2024.
With national transactions remaining low and the NAR settlement fueling more long-term uncertainties, we are positioned for a significant agent exodus. Moreover, the prevailing climate of market volatility may deter remaining agents from making a brokerage change, leading to more difficulty for real estate brokerages intending to increase their agent counts through traditional or passive recruitment efforts.
In light of this forecast, the imperative for brokerages to double down on recruitment efforts is of paramount importance. However, recruitment initiatives must extend beyond mere solicitation, pivoting towards a value-centric approach aimed at enhancing agents’ professional lives.
Key Takeaways:
- Market Influence on Agent Mobility: National transactions strongly influence agent movement between brokerages, with lower home sales highly correlated to lowered agent mobility.
- Projected Surge in Departures: Anticipate a potential uptick in agent departures in 2024 due to lingering uncertainties and low home sales.
- Value-Centric Recruitment: Brokerages must prioritize value-driven recruitment strategies to attract and retain talent amidst market volatility.
- Strategic Differentiation Opportunity: Every shift brings opportunities. Leading with tailored support and value propositions can set brokerages apart in the competitive recruitment landscape.
In the trials of 2024, real estate firms have a unique opportunity to lead with value when courting prospective agents. What’s evident is that brokerages must adapt and place a priority on agent recruitment if they are to survive in this new world. Those that adeptly harness this strategic imperative are poised to emerge triumphant in the fiercely contested recruitment arena of 2024.
Diana Zaya is the founder and president of Maverick Systems, a data analytics and consulting firm dedicated to equipping brokerages with in-depth agent and brokerage analytics, astute data analysis and inventive strategies producing better agent recruitment and retention outcomes.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the authors of this story:
Diana Zaya at [email protected]
To contact the editor responsible for this story:
Tracey Velt at [email protected]