With the real estate market slowing from its record highs of 2005, both the California Association of Realtors and the San Francisco Association of Realtors are predicting drops in the numbers of real estate agents plying the field.
Existing home-sale prices dropped 1.5 percent between August and September of 2006 and only gained 2.2 percent over September 2005 in the San Francisco Bay Area according to data from the state Realtors, a change from the sky-high growth that had been marking the region.
“The number of sales are down in the state as a whole about 31.7 percent. It’s a significant number,” said state Realtors’ President Vince Malta, a San Francisco Realtor. “But putting it in context, September 2005 was one of the best months on record ever. I think 2006 will be remembered as the year of great transition … from a frenzy to a normal year.”
As the market boomed, so too did the number of licensed real-estate agents in the state, from 329,815 in September 2002 to 514,284 in September 2005. Because state-issued real-estate licenses last for four years, the state Realtors expect that figure to grow to 600,000 in 2007, but believe trade membership as a Realtor will drop in California from the present 210,000 people to 185,000, Malta said.
The San Francisco Association of Realtors also expects a drop between 7 percent and 10 percent in its membership of 5,300, president-elect John Asdourian said.
“In the past five years, in excess of 40 percent of our membership has less than five years as Realtors. During the more normal periods … you don’t have quite the high level of influx,” he said. “Although I have not to date seen a huge attrition of San Francisco in our membership. Our membership continues to grow.”
Statewide, September saw a sharp drop in the number of new licenses being issued by the California Department of Real Estate from the previous 12 months.
Meanwhile, as real estate agents adjust to the new conditions in which buyers are pickier and homes can wait on the market longer, pricing houses right and educating buyers and sellers are becoming the important skills of the trade, several agents said. Many reported that individual homes are still receiving greater-than-asking price — provided that they are priced correctly. But others are cutting prices.
Asdourian said he recently sold a Portola District home for $674,000 after a reduction to $679,000 from $699,000. He also priced a Glen Park property at $999,000 where he would once have tagged it at $1.49 million, and still sold it for $10,000 under the asking price. Meanwhile, Harald Stangl of Sotheby’s Real Estate said he recently made a bid on behalf of a buyer for $40,000 more than the $749,000 asking price on a single-family home in the Mission, and lost out to someone paying more than $800,000.
“Good merchandise sells. But people who have overpriced stuff and put it on the market, that doesn’t work anymore,” Stangl said. “I think the change is just excellent, because buyers are really getting more savvy. The buyers are savvy, the loans are low, the unemployment is low.”
Trish Wood of Intero Real Estate Services in San Carlos said while she finds the mid-Peninsula unique in terms of the strength of its market, pricing right is the “all” right now.
“If you had a house at $800,000 last year and you sold it at $850,000, you want to price it at $800,000 this year,” Wood said.
Lisa Thompson of Paragon Real Estate in San Francisco said she purposely priced houses lower than she might have in the past, because she was paying attention to prices comparable homes were getting in their neighborhood. Like Diane Onken of Zephyr Real Estate, Thompson sees fewer speculative buyers snatching up homes.
“We’ve seen it backfire, too, where they couldn’t get a return on investment,” Onkensaid. “I don’t advise speculators in this particular market, because they may get a property at a low price, but the trick is selling it at a high price.”
Onken also cautioned against pricing too low, saying buyers may stick to that price, whereas before it often led to a bidding war.
Educating both buyers and sellers is also a factor right now as each treads carefully on the new landscape, agents said. Sellers, for their part, may still expect the 20 percent appreciation that characterized the market previously, Thompson said, while buyers may now actually have more options but greater skittishness about entering the market.