By DANA MATTIOLI WSJ
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.
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 shops in 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.
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.
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.