A whole lot of Mainers have gone into actual property as the new market begins to chill. Now what?

A sale was pending for this home on Kent Road in Portland, as proven in a 2020 file picture. The variety of Maine residence gross sales fell practically 20% in February from the entire throughout February 2022. Ben McCanna/Portland Press Herald

Whereas many industries wrestle to draw staff nowadays, Maine’s actual property companies have confronted the other state of affairs.

The red-hot housing market, coupled with the enchantment of a versatile, self-dictated schedule, has drawn a whole bunch to get licensed and begin promoting houses in Maine. However because the market begins to chill and stock shrinks, consultants query whether or not the sector can maintain so many individuals promoting so few properties.

The variety of actual property brokers in Maine has grown by double-digit percentages for the reason that begin of the pandemic.

In February 2019, there have been 6,513 licensed brokers within the state, in line with the Maine Division of Skilled and Monetary Regulation. By February 2023, that quantity had elevated 14% to 7,436.

That’s even barely larger than the nationwide progress of roughly 12%.

The Nationwide Affiliation of Realtors reported a record-high membership of 1.6 million final yr, and more than 100,000 folks joined their ranks between 2020 and 2021 – virtually double the 55,000 between 2019 and 2020.

“Tips on how to turn into an actual property agent” was the highest job-related Google search time period between January 2021 and January 2022.

Carmen McPhail, president of the Maine Affiliation of Realtors, stated the elevated curiosity within the career is sensible.

“Actual property has all the time been very engaging to folks due to the flexibleness,” stated McPhail, who can also be a dealer with United Nation Way of life Properties of Maine.

The job is engaging but additionally dangerous, particularly because the market contracts. About 1 in 10 new brokers received’t be capable of make it full time, The New York Occasions has reported.

It’s too quickly to say if there will probably be a flood of brokers leaving the actual property trade.

Traditionally, the variety of brokers has grown in busy actual property markets after which dies down as exercise falls. In 2005 and 2006, greater than 255,000 folks turned brokers. In 2008, after the market crashed, the quantity declined by greater than 10%.

However consultants say this market is totally different as a result of there are so few homes on the market.

Costs are leveling and houses could also be sitting in the marketplace longer. However with so many patrons and so few houses, properties are nonetheless being snapped up shortly – typically with a number of presents properly over the asking worth.

In February, solely 708 Maine houses modified fingers, an virtually 20% drop from the identical month a yr earlier. With over 7,000 licensed brokers, the latest transactions work out to roughly 10 actual property brokers for every home offered. McPhail famous that not all actual property brokers promote homes. Some promote land or workplace buildings, so the ratio isn’t essentially a transparent comparability.

Nonetheless, the disproportion is dramatic.

Because the market begins to chill down, nevertheless, consultants say the variety of brokers will observe go well with.

With fewer gross sales and extra brokers, occasions are powerful, stated Lawrence Yun, chief economist for the Nationwide Affiliation of Realtors.

“Naturally, with fewer residence gross sales, some will go away the trade,” he stated in an announcement. “In a way, Realtors wish to see fewer Realtors as a result of great amount of trade competitors.”

Some who’re half time may flip their consideration to different pursuits. Some full-time brokers may go half time.

That shift could also be taking place already throughout the U.S.

In 2021, the Nationwide Affiliation of Realtors added, on common, greater than 8,400 new Realtors per thirty days. By November 2022, that progress had slowed to about 4,100 new members. In December, when stock was particularly slim, membership rolls reversed course. The Realtor rely plummeted by over 17,000, the biggest one-month drop since December 2009.

‘REVITALIZE’ THE INDUSTRY

Cassie Symonds by no means deliberate on being an actual property agent. Neither did Dan Demeo or Joseph Menard.

Their backgrounds had been all totally different.

Symonds, 26, began out in promoting gross sales for a TV community in New York Metropolis. Demeo, 35, was a structural engineer. Menard, 34, has a background in training however was most just lately working in gross sales and property administration.

However all of them discovered their approach to Maine’s actual property career during the last three years and don’t have any intention to return to their outdated careers.

Cassie Symonds turned an actual property agent in Portland a few yr in the past. A whole lot of Mainers have flocked to such jobs for the reason that begin of the pandemic. Gregory Rec/Employees Photographer

When the pandemic hit in 2020, actual property brokers had been thought of important staff. On the identical time, many individuals discovered themselves working from residence or out of labor altogether, and the state’s housing market was selecting up steam. It might take as little as a number of weeks to acquire an actual property license, so many noticed it as a really perfect alternative.

“So many individuals had been leaving the cities and other people needed to maneuver to Maine,” stated Symonds, now with Re/Max Shoreline in Portland. “When the market is scorching, there are going to be extra folks signing up.”

Within the commission-based trade, record-high residence costs had been a robust lure.

The median worth for a single-family residence in Maine was $329,250 in February, a ten.7% enhance from February of final yr, in line with information from the Maine Affiliation of Realtors. In some areas of the state, like Cumberland and York counties, the typical was a lot larger – $459,000 and $430,000, respectively.

The excessive costs boosted the median actual property agent wage by 25% in only a yr, from $43,330 in 2020 to $54,330, in line with the nationwide affiliation.

It’s production-based earnings, so “the tougher you’re employed, the more cash you make,” McPhail stated. “So long as you’ve gotten good self-discipline in terms of cash and budgeting, you’ll be able to actually make this work.”

That was a giant a part of the attract for Menard, an agent with Coldwell Banker.

He additionally favored having the ability to set his personal schedule. He has two younger youngsters and it permits him to spend extra time together with his household, although he stated he most likely works extra hours than when he was working in an workplace. He’s not involved about whether or not his present tempo is sustainable.

“I believe that it’s sustainable for these prepared to do the work,” Menard stated. “There’s a view from some folks stepping into the trade that it’s a straightforward paycheck. You may get one or two closings fairly simply, however doing that persistently (requires dedication).”

“I can management my very own earnings, which is a extremely nice bonus,” he stated. “If I wish to earn extra, I work extra.”

Demeo, now with Tomazin Goff Realty, an affiliate of the Bean Group, additionally likes being self-reliant.

He began out working in actual property half time however, after a yr, switched to full time. A yr later, he hasn’t regarded again.

“Nearly every little thing about what I’m doing now in actual property is 180 levels totally different than engineering,” he stated. “It was a big danger.”

However Demeo, 35, is pleased together with his selection. He likes his purchasers, and the flexibility to set his personal schedule permits him to spend extra time together with his household.

Whereas it’s too quickly to say how the increase in actual property brokers may shake out within the brief time period, the expansion amongst youthful professionals like Symonds, Demeo and Menard is probably going to assist maintain the trade long run.

The typical Realtor is 56 years outdated, in line with the nationwide affiliation.

Because the oldest state within the nation, Maine is struggling to draw younger staff to exchange the tens of hundreds of child boomers who’re anticipated to retire within the subsequent few years.

Actual property is not any exception. McPhail stated that if there’s going to be a wave of individuals leaving the trade, it would probably be older licensees who’re prepared and capable of retire after three years of excessive earnings.

However not like in lots of different industries, in actual property, the youthful workforce seems to be able to take up the mantle.

“We’re going to revitalize our personal area,” Menard stated.