Agents could leave industry in droves

by Justin da Rosa15 Jun 2016
The moment of truth is soon approaching, according to one veteran agent, who thinks many Alberta-based agents may soon leave the industry.

“Some of the agents who did it part-time will drop out,” Duane Ritter, an agent with RE/MAX in Edmonton, told REP. “I can see it happening [on a larger scale], especially in the smaller towns that have been really hit.”

Many markets in Alberta have struggled for the past two years, with the oil industry – which the province has so heavily relied on as the major driver of its economy – suffering a downturn.

Overall sales across the province fell by 9.4% year-over-year in May. The markets that suffered the most were Grande Prairie (-40.1%). Lloydminster (-24.7%), and  Alberta West (-19.2%).

And a drop in sales means fewer deals for agents.

“A good indication of whether or not agents are leaving the industry is in advertising costs,” Ritter said, noting he has seen fewer advertisements in local publications being taken out by agents.

According to Ritter, agents paid their CREA and AREA dues recently and most are paid up until the end of the year.

However, once they are due again, a culling may take place, as many agents may choose to exit the industry. Another deadline that could lead to a few agents opting out is also approaching, with RECA renewal due in late September.

As for the overall economy which, of course, impacts the housing industry, Ritter argues the lowest point is yet to come.

“I think the lowest point will be the fall,” he said. “If we don’t have an oil bounce back, fall will be the lowest point.”
 

COMMENTS

  • by Scott Simmons 6/15/2016 11:57:35 AM

    Our area in BC went through a 5 year down cycle and most agents looked at ways of cutting cost. Things like print advertising and brokers fees were cut. Most of the stronger agents stuck around waiting for the market to turn. The one thing it did was it stopped any new ones from starting up this has left the remaining agents a little grayer but wiser and more humble. Most have not forgotten about the long dry spell we had and that is why so many are going to turn against the Real Estate board and vote against them in the upcoming vote on amalgamation. Even in the good years we have to look at cutting our op cost and being prepared for the next down cycle. One has to be able to weather the storms in this industry if one want make it a career.

    I do feel for all in the down cycle areas. Personally I spent my time working on my web site, podcast and 700 odd youtube videos which are now paying dividends. The market will come back everything is cyclical look at the down market as the best buying opportunity time in the last 20 years.

    Cheers Scott on booming Salt Spring Island.

  • by Miles Godlonton 6/15/2016 12:05:04 PM

    i respectfully disagree, agents leaving in droves??? NOT LIKELY, its called "purging", it happened in the mid 70's again in the early 80's for those of you who remember 21% mortgage rates, and i am here to tell you, the realtors that made it thru those times turned out to be some of the best realtors our industry has ever seen, bare none! Tough times is a way of separating to good from the mediocre.
    it creates opportunity, but saying the sky is falling gets more headlines.
    the headlines should read "Opportunity has never been better". it's just like to the old saying "when people are buying SELL, when they are selling BUY", now is the time to "excel in real estate sales". Or another old saying "is the glass half empty or half full"? Take it from an "old dog".
    Miles Godlonton
    Licensed January 1976

  • by Bruce Pollon 6/15/2016 4:48:36 PM

    Thanks Miles!
    I agree with you. With the cycles, there is always change in agent numbers. Tough times do separate those can see opportunities from those who can't. We are in a service oriented business.
    Licensed since March 1979.

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