Is it worth becoming a real estate agent in 2024? If you follow the real estate industry, you might know about the factors that make it unstable.
This is concerning for people in the industry and who want to join it. But, these concerns could be sensationalized hype used to by clickbait headlines.
In this article, I explore the current state of the industry and whether or not it's a good time to be an agent. Let's get into it!
Current State of the Real Estate Market
In 2024, we see a transitionary market. There are buyer's markets, seller's markets, and balanced markets. The prior two are referred to "unbalanced markets." When the market is balanced, we see roughly equal demand to buy and sell real estate. You might have already guessed that seller's markets mean more leverage for sellers (fewer supply of homes.) Buyer's markets are the opposite: more leverage for buyers (more inventory of homes.)
Today, we are transitioning into slower market. For the past few years, we saw ourselves in a seller's market because there was more demand for homes. This was because of lower interest rates. In the last year or so, interest rates have increased, which has made owning a home less desirable. Thus, a transition into a buyer's market because there is less demand to buy.
But, home prices are still high. As we see the inventory increase, the price of homes could come down. But, right now, we're seeing high prices and low demand.
Keep in mind, this not the case everywhere. Every state, every city, and every town has their own local economy that dictates demand. This is just broad overall observation. Take it as you will.
Let's now explore how this current state of the real estate market affects real estate agents.
How Does This Market Affect Real Estate Agents?
A real estate agent's job never changes. An agent's job is to represent buyers and sellers through the transaction process. No matter what, there is demand to either buy or sell property.
As I mentioned in the previous section, there are times when sellers sell homes and times when buyers buy home. Then there's times when they want to do both! Those are good times.
No matter what the state of the market is, there are people who need real estate agents. A good agent will know this and adapt their business to the market. Instead of representing sellers, you represent buyers, vice versa.
I've been doing real estate since the 90's. Whenever there is a shift in the market, people always do the same thing: freakout and dropout! Don't let a changing tide get to you, just ride the wave. That is the job of the agent.
That's why now is always the best time to become a real estate agent. Not yesterday, not in another year. Now! The industry will always change. That's part of the job.
How Does the Change in Commissions Affect Real Estate Agents?
Recently, the National Association of Realtors® (NAR) resolved in court that their practices around commission sharing and competition in the real estate market was unfair.
This legal case resulted in a modification to the practice of how agents earn their commission checks. Now, buyers are required to disclose how they are compensated and sellers are no longer obligated to provide commission to the buyer.
How does this affect real estate agents?
In reality, very little has changed. The buyer is now informed on how their agent is compensated and can make a decision based on this information. The major argument against modification is buyers will have to finance their agent and therefore will stop them from buying a home.
However, this case doesn't prohibit buyer's agents from accepting a portion of the listing agent's commission. It stipulates that the buyer's agent must inform the buyer of this. The buyer is free to make their own decision based on this information.
People may be misinformed and not understand the full effect. As we mentioned earlier, there will always be demand to buy or sell real estate. There will always be this demand no matter how agents are compensated.
The reaction for some is to freakout and dropout. For others, it's to stay in the industry and run a successful business helping clients. As the months go on, we may see less real estate agents in the industry because they left it or they chose not to become an agent.
This is great news for those who stay in it, because they get more market share.
Is Now a Good Time to Be Real Estate Agent?
So, is now a good time to be a real estate agent? There is a lot of uncertainty as the industry involves. It's hard to predict where it will land but I can assure you that it's just part of the job.
It is always a good time to get into real estate. People will always buy and sell real estate. The change to the market and the change to commissions just means our business follows a new system, and that is just part of the job of the agent.
