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Real estate and mortgage leaders face challenges every day. Often the same challenges repeat themselves over and over again, in a Groundhog Day cycle of inventory shortages, high mortgage rates, and, most recently, lawsuits that threaten to upend old practices.
Wash, rinse, repeat.
But long-haul leaders are also keeping an eye on the horizon, with new data suggesting that today’s disruptions raise concerns for the future.
- about 28% of brokerage leaders People who responded to the January Inman Intel Index Predict “Recruiting and retaining human resources” After a year it will be the most difficult part of their business..
That mark is highest value measured According to Inman Intel IndexAlso known as Triple I Since this flagship study was published in September,. The selection of the same answer has never exceeded 24%. January was also the first time that “talent recruitment and retention” was all the rage for brokerage leaders as they looked to the year ahead.
To this end, Intel is planning a series of in-depth reports on recruitment in the coming weeks. The series, which will take place in early April, will be based on in-depth questions and conversations with experts in the field that will be part of Triple I in March.
But until then, read the full report below to find out why so many real estate leaders believe hiring will be a critical issue next year.
war of attrition
2024 could be the most competitive hiring cycle in years for several reasons.
Mortgage headwinds continue to reduce the number of both brokers and loan officers. Corporate owners are figuratively defending the domestic front while having fewer talent to target outside their own walls.
That’s because, to some extent in both industries, those who leave are not just newbies or misfits. Several business leaders discussed strong producers who didn’t have the wherewithal to weather a generational recession. This is the scenario his Compass CEO, Robert Refkin, described in an interview with Brad Inman last month.
“I’ve never seen so many top agents in the last year wondering if they should leave the business,” Levkin said.
The National Association of Realtors is bracing for a possible record high in membership in a single year, following the first year-over-year decline since 2012. Lawrence Yun, NAR’s chief economist, emphasized this in his book: Latest member analysis Even though the outflow is slower than some expected, it does not mean the losses are over.
“Most state and local associations should expect further declines in membership over the next 24 months based on the effects of past housing cycle delays,” Yun wrote.
Some of the country’s largest securities companies acknowledged losses in their recent earnings reports.
EXp’s year-end agent count was also down 1.8% from the previous quarter, according to founder and CEO Glenn Sanford. Sanford said on a conference call with investors that the fourth quarter was “the first time in history that the number of agents was down quarter-over-quarter,” but the agent decline was among the least productive agents. He added that it appears to be almost isolated.
RE/MAX’s total agency count fell 6.1% in the U.S. last year, and continued to decline earlier this year, company spokespeople said. According to the company, it currently has 143,497 agents worldwide.
The fight to retain producers is not limited to the world of real estate brokerage. The world of mortgages has been devastated by a prolonged period of high interest rates and declining home sales.
It’s not 2007 and 2008 for mortgage originators, but about 50,000 non-bank mortgage brokers and bankers will see pay cuts in 2023, and layoffs will continue to be announced in 2024. has not slowed down.
Consider some of the mortgage industry headlines from the first two months of this year.
Leveling up
Meanwhile, some real estate companies and mortgage brokerages are staffed by relative newcomers who took part in the veritable gold rush sparked by the COVID-19 home buying frenzy. ing.
They thrived when mortgages were nearly free and inventory was slack, and perhaps even started establishing themselves as influencers on social media.
But TikTok will only go that far if interest rates rise at their fastest rate in 40 years or if U.S. home sales are at their lowest since 1995.
Several 22 percent Percentage of survey respondents say “Recruiting and retaining talent” is the most difficult part current business environment I will briefly explain the main topic.
prepare for opportunity
At some point, as inventory replenishes, mortgage rates fall (sufficiently), and the demand drivers of household formation collide, the housing market will go into another upcycle.
- According to Triple I in January, More than three-quarters of real estate and mortgage executives We rated our confidence in our business model as “a” 4 or higher on a 5-point scale.
It’s no surprise, then, that the companies that survive – those with proven business plans, engaging cultures, and the necessary technology – are in a position to win the talent arms race and steal market share from their rivals.
Mortgage companies are in the midst of this right now. Still, when the spigot is turned back on, underwriters, loan officers, secondary market experts, support staff, marketers and more will be needed. The worst thing a mortgage company could do post-recession is not be able to provide quality service and efficient underwriting and pre-approval to their customers and real estate referral partners.
Real estate agents may have fewer competitors 12 months from now. Among the many things that are less certain is who and how much the buyer agent will be paid. So one of your recruiting pitches might be to make a clear pitch to agents who feel like they’re not getting transparency or answers from their current brokerage.
One survey participant expressed a view of today’s challenges that is broadly consistent with what others believe will be the challenges of tomorrow.
“There is a lack of education that most brokers provide to their agents. They are so concerned about paying the highest installment that they cannot afford to have management train them and hold them accountable.” The old mom friend approach is being replaced by the “I’ll pay you the highest amount” approach. As a result, agents have no value proposition and commissions are declining. No one mentioned this. ”
Stay tuned for Intel’s full recruiting series in early April. There, these questions will be considered in more detail.
Methodology notes: this month inman intel index investigation The entire Inman reader community is invited to participate, intel A total of 1,029 responses were received.Respondent to this investigation They were directed to the SurveyMonkey platform, where they self-identified their profile in the residential real estate market. Respondents were limited to one answer per device, but there was no restriction on IP address. Once a profile (Residential Realtor, Mortgage Broker/Banker, Business Executive/Investor/PropTech, etc.) was selected, respondents answered a unique set of questions regarding that specific profile.because investigation Demographic information regarding age, gender, and geography was not requested, nor was the data weighted.this investigation It is conducted monthly and includes both recurring and unique questions for each profile type.
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