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Leaders in the real estate and mortgage industry face challenges every day — often the same challenges over and over again in a Groundhog Day cycle of low inventory, high mortgage rates and, more recently, lawsuits that threaten to upend old practices.
Wash, rinse, repeat.
But long-term leaders are also looking to the horizon, with new data suggesting the current turmoil is raising concerns about the future.
- About 28% of brokerage leaders Who responded to the January Inman Intel Index? predict “Recruiting and retaining talent” A year from now will be the most challenging part of their business.
That mark is highest measured value According to the Inman Intel Indexalso known as Triple-I, Since this flagship survey was launched in September. The same response choices had not previously topped 24%. January also marks the first time that “recruiting and retaining talent” is at the forefront of all concerns as brokerage leaders look to the year ahead.
As a result, Intel is planning a series of in-depth coverage on the topic of recruiting in the coming weeks. The series, which will run in early April, will be based on detailed questions from the March Triple-I and conversations with experts in the field.
But in the meantime, read the full report below to learn why so many real estate leaders see recruiting as a critical issue in the coming year.
war of attrition
2024 could be one of the most competitive recruiting cycles in years for a number of reasons.
That could go both ways: Real estate headwinds continue to shrink the ranks of brokers and loan officers. Company bosses are defending their home fronts while not finding enough talent outside their walls.
That’s because, to some extent, the turnover in both industries is more than just rookies or people who don’t fit. Several business leaders discussed some strong producers who don’t have the wherewithal to survive a generational recession. That’s the scenario Compass CEO Robert Reffkin expressed in an interview with Brad Inman last month.
“Last year, I’ve never seen so many top agents questioning whether they should leave the industry,” Refkin said.
The National Association of Realtors is bracing for its largest one-year membership decline ever, following its first year-over-year decline since 2012. NAR Chief Economist Lawrence Yun emphasized this point in his report. Latest member analysis While the outflows have been slower than some expected, the losses are far from over.
“Based on the lagged effects of past housing cycles, most state and local associations should expect further membership declines over the next 24 months,” Yun wrote.
Some of the largest U.S. brokerages acknowledged losses in recent earnings calls.
EXp founder and CEO Glenn Sanford said that compared with the previous quarter, EXp’s year-end agent headcount also decreased by 1.8%. Sanford said on an investor call that the fourth quarter was “the first time in history that our agent numbers have declined quarter-over-quarter,” though he added that agent attrition appears to be concentrated among the least productive agents.
The total number of RE/MAX agents in the United States fell 6.1% last year and continued to decline early this year, according to a company spokesperson. The company said it currently has 143,497 agents worldwide.
The struggle to retain producers isn’t limited to the real estate brokerage world, either. The mortgage world has been battered by a prolonged period of high interest rates and low home sales.
It’s not 2007 and 2008 for mortgage originators, but about 50,000 non-bank mortgage brokers and bankers are losing their jobs in 2023, and layoff announcements aren’t slowing down in 2024.
Consider some of the headlines from the mortgage world during the first two months of the year:
upgrade
On the other hand, some real estate and mortgage brokerage employees are relatively new to joining the veritable gold rush sparked by the COVID-19 homebuying frenzy.
When mortgages are nearly free and inventories are loose, they thrive and may even start building their own social media presence.
But TikTok will only get this far if interest rates rise at their fastest pace in 40 years, or U.S. home sales hit their lowest levels since 1995.
Some twenty two% of respondents said “recruiting and retaining talent” is the hardest part Current business environment Get to the point.
Prepare for opportunities
At some point, when inventory replenishes, mortgage rates fall (enough), and home-forming demand factors collide, the housing market will enter another upcycle.
- According to a report from Triple-I in January, More than three-quarters of real estate and mortgage executives Their confidence in their business model is 4 or above on a 5-point scale.
As a result, survivors, those with proven business plans, enticing cultures, and necessary technology, will be well-positioned to capture market share from competitors by winning the talent arms race.
Mortgage companies are in trouble right now. Still, when the taps turn back on, they will still need underwriters, loan officers, secondary market specialists, support staff, marketing staff and more. The worst situation a mortgage company can face in the wake of an economic downturn is an inability to provide quality service and efficient underwriting and pre-approval to its customers and real estate referral partners.
For real estate agencies, there may be fewer competitors in 12 months. Among many things, what is less certain is what a buyer’s agent will be paid and who will pay it. Part of the recruiting pitch, then, may be making a clear pitch to agents who may feel like they’re not getting transparency or answers from their current agency.
One respondent offers a perspective on today’s challenges that is broadly consistent with what others see as future challenges.
“Most brokers lack education for their agents. They are so concerned about paying top dollar that they can’t afford to train management and hold them accountable. The old mom and pop approach is being replaced by “I pay you top dollar” money” instead and keep yourself up to speed. In turn, agents have no value proposition and commissions are declining. No one solves this problem. “
Stay tuned for Intel’s full series on hiring in early April, which will explore these issues in more detail.
Methodological Notes: Inman of the month Intel index poll Taking place from January 21 to 31, 2024.Invite the entire Inman reader community to participate, and Intel A total of 1,029 responses were received.Respondents to this poll were directed to the SurveyMonkey platform where they self-identified their profile in the residential real estate market. Respondents were limited to one response per device, but there was no limit on IP addresses. Once a profile is selected (residential real estate agent, mortgage broker/banker, business executive/investor/proptech or other), respondents answer a unique set of questions for that specific profile.because poll There is no requirement for age, gender or geographic location demographic information, and there is no data weighting.this poll Will be conducted monthly, with recurring questions and unique questions for each profile type.
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