The housing market's long decline has left once-thriving real-estate professionals scrambling for supplemental income or changing professions.
Realtors, agents, brokers and builders rely on sales and commissions for most of their income. And their incomes plunged as sales of existing homes fell 13.3% to 4.9 million last year from 7.1 million in 2005, the most recent peak. The National Association of Realtors says median income for Realtors and brokers fell to $36,700 last year from a high of $49,300 in 2004. The group's membership fell to 1.14 million in September from 1.35 million in September 2006.
Andy Reisinger was caught in the downturn. After eight years in real estate, Mr. Reisinger, 36 years old, was laid off in January 2008 as a sales manager for a Coldwell Banker office in Lehigh Acres, Fla. He quickly learned other real-estate jobs were scarce. The Bureau of Labor Statistics counted 310,100 employees in real-estate offices in August, down 17% from August 2007. The figure excludes most agents, who are self-employed.
Jill Galloway, a Realtor, hopes to supplement her income with a women's clothing store she and a friend recently opened.
So he looked into law enforcement, and in April 2008, he became a deputy sheriff in Lee County, Fla. His pay fell to $35,000 annually, from $75,000 at Coldwell Banker. But he is satisfied with the trade because he now has health insurance and a pension, neither of which came with his real-estate job. He is also saving on expenses such as brokerage and licensing fees and insurance. Plus, he enjoys the excitement of being a sheriff. Mr. Reisinger views the housing slump as a blessing in disguise. "I'm happy that it happened because it gave me the opportunity to do something different," he says.
Florida agents, near the heart of the real-estate boom and bust, are suffering more than most. Membership in the Florida Association of Realtors is down 29% since 2006, although the number of Realtors could change by year-end. Eileen McVeigh, broker owner of Re/Max Coastal Real Estate in Ponte Vedra, Fla., has 19 independent-contractor agents, down from 37 two years ago. Ms. McVeigh says some left for other jobs as sales declined. Among those remaining, she says, some have taken on second jobs in retail and construction to bolster their incomes.
Walter Molony, NAR spokesman, says Realtors traditionally dabbled in appraisals, commercial real-estate insurance and title insurance to carry them through slow months. But this downturn has been unusually long, and many of those related fields are suffering along with home sales, forcing many agents to consider other options.
Until recently Jill Galloway, 49, worked solely as a Realtor with Hilton & Hyland in Beverly Hills, Calif. Since 2002, Ms. Galloway has specialized in residential real estate in the affluent Hancock Park and Hollywood Hills areas. Last winter, she realized that real-estate sales wouldn't be enough to support herself and two children, ages 16 and 11. Ms. Galloway didn't sell a home from January through July. "It became crushingly apparent that I couldn't pretend anymore that all of my clients were sitting on the fence," she says.
Her only income came from sporadic leasing deals, forcing her to dip repeatedly into retirement savings. She estimates her earnings this year will fall at least 60% from the $200,000 to $250,000 she earns in a typical year.
In July, Ms. Galloway and a friend opened a women's store in downtown Los Angeles, selling samples and overruns given to them by showrooms; when an item sells, the women pay the showroom and keep the mark-up. They don't pay rent because the landlord, with other vacant shopsin the area, just wants the store occupied.
"It's not a major income stream, but I do see some cash flow and a way to cross-promote" her real-estate business, she says. She says any face time with new people can turn into a prospective business deal.
While Ms. Galloway is exploring other work, she says she still considers herself primarily a Realtor.
Ms. Galloway is also exploring a frozen-yogurt franchise with her brother in New Orleans, but says she still considers herself primarily a Realtor. "I'm a real-estate agent 24 hours a day, everywhere I go, there's always the opportunity for me to find a client or property," she says.
In Springfield, Va., Patrice Moore also is venturing outside real estate. Ms. Moore, 54, says four recent deals fell through as prospective buyers backed out when they couldn't find the deals they were expecting to see on the market. One client stopped looking after she had worked with him for six months. After five years of consistent six-figure incomes, she expects her income to fall by half this year.
In March, Ms. Moore began searching for a part-time job and landed a position with a friend's ethics-consulting company. She earns $25 an hour, plus benefits she wasn't getting as a Realtor, like health care and a 401(k) plan. She says the position gives her some financial peace of mind and is helping her brush up on skills outside of real estate. "I consider myself a full-time Realtor, and I do the [consulting] work part-time, but there's an argument to be made that I'm a full-time employee doing real estate part time," she says.
Builders, too, are being forced to look elsewhere for income. The National Association of Home Builders projects 572,000 housing starts for 2009, down from 1.8 million in 2006.
Mark Kaminsky, owner of Carson Country Construction, a custom-home builder in Carson City, Nev., has felt the pain. He says his income is down at least 80% from three years ago. So he is taking on remodels, additions and repair projects. in addition to new homes. "Almost any job will do," he says.
He and his wife, Ann, who is a co-owner, have trimmed household expenses and taken on part-time jobs outside of construction. Ms. Kaminsky temporarily worked at a day-care center. to help make ends meet. Next spring, Mr. Kaminsky plans on teaching construction-management courses at Western Nevada College. "I need an income and there isn't enough work out there," he says.
Recruiters say real-estate workers typically have transferable skills. Those with backgrounds in acquisition or development might consider renewable-energy fields such as wind or solar, says Deb Barbanel, managing director and co-lead of real estate in the Americas for executive-recruiters Russell Reynolds Associates. People with financial skills, such as mortgage brokers, and loan originators, are flocking to the FDIC and other government agencies, she says. Ms. Barbanel says real-estate veterans can get a leg up in the job search by mining their extensive contacts. "They build strong relationships and can take those skill sets into other areas where relationships are tantamount to success like sales and marketing," she says.
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