Tough time for Realtors
Changing careers Selling more, making less
Published: Sunday, January 24, 2010 at 6:01 a.m.
Last Modified: Saturday, January 23, 2010 at 11:42 p.m.
Talk about bad timing.
Julia Ariet quit her job as a first-grade teacher to be available to her daughters after they advanced past elementary school.
She figured real estate would be a good career in which to make a good income with the flexible schedule she wanted. She earned her real estate license in the summer of 2007 - just as the market for home sales started to crash.
Ariet needed another source of income and found a part-time job as an assistant to a massage therapist, in addition to continuing part time as a Realtor for Cornell & Associates.
"I had the expectation that I was going to make a certain level of income," she said. "I certainly wish I'd gotten in earlier and hit the height of the market."
Real estate brokers say more area agents are taking part-time jobs to make ends meet.
Others are taking a break from the business to wait out the lull or are leaving it altogether.
Even those able to keep up their sales numbers are working a lot harder for a lot less in commissions, as it takes longer to make a sale and the sales prices are lower.
One in every three local Realtors left the business between the height of the market in 2006, when about 1,300 were active in the Alachua County area, and last year, when 840 local Realtors were reported as active.
The number of dropouts, steady at about 125 for the first couple of years of the downturn, picked up to 210 between 2008 and 2009.
The pace picked up because people haven't been able to hang on, or didn't want to, said Carol Bosshardt of Bosshardt Realty Services.
"We had three or four people who just couldn't hang on any longer," she said of her company. "I think we'll see more this quarter. It's just too long living off the fruits of the past."
Still, brokers said they were surprised more Realtors hadn't dropped out. And some who did are just sitting out until the market turns around.
"I warn them, don't do that, because other people are going to get in your little niche because they're working all the time," Bosshardt said.
She said a surprising number of people are taking courses to get their Realtor license, many of whom were laid off from other careers.
Anne Koterba was involved in planning new home communities such as Meadows on the Prairie for Bosshardt, but with new home sales taking the biggest hit, she has been taking a break from real estate.
Instead, she has been more active in community activities such as fundraising for the new Jonesville Park tennis facility, and she chaired the county's Recreation and Open Space Committee, in addition to spending more time with her teenagers. "There's always a silver lining," she said.
In the meantime, she said she still is keeping up with permits and new home sales numbers and looking for her next new home community project.
"I'd like to be involved in a new project. You just have to be sort of picky these days," Koterba said.
Kevin Riordan sold his Chain Reaction bicycle shop and bicycle wholesale business and went into real estate in 1997 while his wife, Laurie, went into financial planning so they could afford to send their four children to college.
Both were hurt by the recession and now Kevin Riordan is going into the insurance business while his wife is involved in home-based women's clothing sales.
"I couldn't make a living, and early last year I said, 'Hey, I need to do something about this,' " he said.
He commuted to Tampa for seven weeks to take classes toward his insurance license and just started with Scarborough Insurance.
Riordan still maintains his membership in the Realtors' association, but without much to do in real estate is trying to build a network of insurance customers.
For many Realtors taking other jobs, health insurance costs are the big issue, said J. Parrish, president of Coldwell Banker/M.M. Parrish Realtors.
Realtors who were making $70,000 to $100,000 a year and are now making $20,000 are unable to afford health benefits, he said.
"Having a job with an employer that has a health package, that issue alone has pushed more people to get a steady paycheck over a commission-based income," Parrish said.
He said he knows of Realtors who are painting houses and other maintenance-type jobs, but said many are trying to maintain the appearance that they are full-time Realtors.
Several Realtors with part-time jobs did not return calls for comment.
Betsy Pepine of Cornell & Associates counts herself among the Realtors who are selling more homes but making a lot less money.
Broker Ken Cornell said the company's average sales price went from the upper $200,000s to $225,000 last year.
The median price, or midpoint, for existing single-family homes in the Gainesville Metropolitan Statistical Area was $215,200 in the third quarter of 2006 compared with $172,000 for the same period in 2009, a decrease of 20 percent, according to Florida Realtors.
And each sale is taking more work, Pepine said.
"It's a lot of first-time home buyers who need a lot of education in terms of the home-buying process," she said, with the first-time buyer tax credit and foreclosures among the lower-end homes driving the market.
Cornell said agents also are having to show more houses to make a sale and having to stay in touch with customers.
"If you're buying a house in 2007, you're racing against lots of other people to just get the house, and money was very accessible. Now people are taking a lot longer, so Realtors have to do a lot more that they don't get paid for," he said.
Tommy McIntosh, who gave Ken and Angela Cornell their start in the business at ERA Trend Realty, echoed Ken Cornell's point.
"In 2003, 2004, they were just taking orders and making six-figure incomes, and those who got accustomed to that had to change their whole style," McIntosh said.
The Cornells started their company in October 2006. By the summer of 2007, "all hell was breaking loose," Ken Cornell said.
Still, he said they have been growing their market share by having a small office with four full-time Realtors native to Gainesville in addition to four part-time Realtors.
Cornell credits technology with leveling the playing field for small brokerages, and he said he has been aggressive about marketing properties over the Internet.
Cornell also echoed comments made by Bosshardt at the recent annual Realtors' awards ceremony that even though Realtors are competitors, the tough times have made them all closer.
"Realtors are hurting as much as anyone. The downturn showed that we all need to be in this together," he said. "There's usually two Realtors on each side of a transaction, and we all have to work together to get to the closing table."
Erica Brough/Staff photographer
Realtor Betsy Pepine of Cornell & Associates shows a home to a potential buyer on Jan. 15.