If recent online searches are any indication, this is a very popular question. But the question, as framed, focuses on a timing component that may not deserve the degree of consideration it often receives.
Go with the Flow
Many industry veterans would say there’s no such thing as a good or bad time to get into real estate. Instead, they insist that every point in the ebb and flow of the housing market holds its challenges and opportunities and that ample rewards await those who understand this.
Think Longterm
The popular axiom “the only constant is change” applies to this timing question as well.
When making career decisions, you should be thinking long-term, not about what the current economic cycle happens to be. And you want to do your best to take irrational, heat-of-the-moment emotions out of the equation as well.
The recent housing boom attracted new agents like wild-eyed miners to a gold rush. The National Association of REALTORS® (NAR) reported that more than 156,000 new agents were added to their membership rolls during 2020 and 2021, representing an increase of close to 60% over the prior two-year period.
But, now, with increased talk of an economic slowdown, rising interest rates, and a downturn in the housing market, many of those same people are moving on, looking for the next shiny object.
That’s no way to build a career or live a life. Don’t let that be you.
Fun Fact: Going all the way back to 1857, the average length of a recession in the U.S. is only 17.5 months… just under a year and a half. Why would anyone base a career decision on such a short time frame?
Is a Career in Real Estate Right for Me?
“Is a career in real estate a right for me?” Ah, now, we’re getting somewhere.
Because with this question you’re focused less on timing and more on whether the life of a real estate agent is a good fit for you.
That’s a question that is being asked with more frequency now than ever.
The Pandemic Pivot
Per a March 2022 article in the New York Times, the top job-related search between January 2021 and January 2022 was “how to become a real estate agent.”
This was year two of the pandemic and the emergence of the “great resignation,” which was actually not so much a new phenomenon as it was an exacerbation of a growing trend.
It was a time during which many began to reflect on their priorities, particularly their work/life balance. In this environment, remote work and “pandemic-safe” occupations gained favor as did career paths that seemed to offer a greater sense of personal satisfaction and control.
For people who put a premium on such things, a career in real estate seemed to check all the boxes.
Survey Says…
To get a better understanding of those who made a career switch to real estate between 2019 - 2021, Aceable conducted a survey target real estate agents that switched careers right before, or during, the pandemic. Here’s some of what we learned from their survey of over 600 qualified respondents:
92% of people surveyed felt that COVID created more incentives to pivot into real estate 42% switched to a career in real estate out of a need for additional financial support
46% switched due to an increased need for flexibility due to family care
46% switched because of the opportunity they would have to help others
41% felt burned out from a previous job
45% wanted a career where they could work remotely
Perhaps, the biggest takeaway of all was that 84% of respondents were happy with their choice to pursue a career in real estate.
Find out more about why so many people find real estate to be a great career fit for them.
The Ever-Changing Housing Market
Even though we believe that career decisions should be made with a long-term time horizon, we do acknowledge that challenges and opportunities in real estate will change, right along with the market conditions themselves.
So, let’s talk about that.
Boom Goes the Market
The characteristics of the most recent housing boom are fairly typical of all booms:
Seller’s Market
More agents overall
Lower inventory of homes (relative to demand)
Lower interest rates
Higher prices
Less time on the market
There are pluses and minuses for a new agent launching their career in this kind of environment.
The new agent’s lack of an established network probably means the more desirable listings will go to experienced agents. This leaves the new agent scrambling to find buyers willing to put offers on those properties. And because boom markets are primarily sellers’ markets, the new agent will also find buyer representation to be more competitive and challenging than it is in other market conditions.
On the other hand, the frenetic pace of a housing boom will allow a new agent to “fail fast,” experimenting and learning quickly what does and doesn’t work. This will accelerate their learning curve, quickly giving them experiences that will serve them well for the rest of their career.
And, in this fast-paced environment, a savvy new agent might think to offer their assistance to the more experienced, successful (and busy) agents in their brokerage who would likely welcome the help and would mentor the new agent as they worked together. Barring this sort of arrangement, the new agent might not get the guidance they desire from their sponsoring broker or others in the firm.
Before moving on to a discussion of other market conditions, it’s worth restating that the 600+ new agents we surveyed did, in fact, launch their careers during the most recent housing boom, and 84% of them are happy with that decision.
The Great Deceleration
“The Great Deceleration” is a term recently coined by Fortune Magazine for the expected cooling down of the pandemic-era housing market boom. They point to a number of signs for taking this stance, but for the purposes of this discussion, we’ll remain focused on what new agents should expect in this type of market environment. And we should note that not everyone agrees that a significant cooldown will occur.
But, if it does, here’s what a new agent should prepare for:
Transition to a buyer’s market
Fewer agents overall
Higher inventory (relative to demand)
Higher interest rates
Lower prices
Longer time on market
As you can see from this list, the characteristics of a cooldown are pretty much the opposite of those attributed to a housing boom. But, like a boom, a downturn in the housing market has something to offer the new agent.
Most new agents start off their careers representing buyers until they can establish a network of satisfied former clients and word-of-mouth referrals who will turn to them when they need to sell. A network like that, of course, can take some time to build. So, if that’s the way things are going to work out anyway, starting off their career in a buyer’s market could, in some ways, be considered a bit of good timing for the new agent.
Additionally, sponsoring brokers will have more time to nurture a new agent, giving them the benefit of their experience and perspective. And senior agents in the firm (the ones with the listings) will probably be more than happy to take advantage of a new agent who’s eager to work an open house in their place.
Volunteering to work open houses or take on weekend office duty shifts will strengthen the new agent’s relationships within the brokerage team even as they build their own client base in the process. You never know when answering the office phone or greeting a walk-in will turn into a new client.
And speaking of relationships, a new agent needs to develop a network of other professionals outside of the brokerage who also have roles to play in real estate transactions. The slower pace of a housing cooldown will afford a new agent the luxury of getting to know some of lenders, mortgage loan officers, home inspectors, and insurance representatives they’ll come to rely on when helping clients through transactions.
Good Fit = Good Time
In the end, when it comes to considering a career in real estate, it’s a question of fit, not timing. Because if it’s a good fit, it’s always a good time.