The Real Deal
December, 2005

THE MARKET COOLS, AND THE BROKERS DON'T BAIL

Hiring May Be Down, But Broker Numbers Stay Strong
Even As Sales Prices Level Of

By Alison Gregor

At a time when the residential property market may be slowing, there are still record levels of agents and brokers in business in New York City, according to data from the New York State Department of State.

At Manhattan’s biggest brokerage firms, too, the number of agents remains higher than during the boom times this past spring, according to an analysis of firms’ Web sites, though whether a decline is in the offing because of a moderating market remains to be seen.

“I’ve not heard of any people leaving the business or less interest from people coming into the business,” said Steven Spinola, president of the Real Estate Board of New York.  “My membership is at an all-time high with residential brokers and salespeople.  People come into the business because they’re reading the stories of how we’re averaging $1,000 a foot in sale prices in New York.”

But while a number of agents at the biggest brokerage houses still shows a net gain over earlier this year, firms are not hiring, said Esther Muller, president and CEO of Esther Muller Consultants.

“Many of the companies that used to sponsor new agents are no longer doing that,” she said.  “They’re more interested in getting experienced agents to come in, and therefore are not encouraging everybody and their mother to get a license.”

And Muller, who does continuing education for real estate agents, said fewer people have been getting their licenses.

“There’s definitely a slow down in people getting their licenses,” she said.  “And those getting their licenses, it’s definitely their second or third career.  The applicant set is more serious and business-oriented.

“So I definitely think there is a ‘softening of the market,’ if you want to call it that,” she said.

Paul Purcell of Braddock+Purcell, a Manhattan-based real estate consultancy firm, agreed.  “If the market continues to transitions, companies will probably have to change their hiring habits,” he said.

Still, Shaun Osher, who founded boutique firm CoreGroup Marketing last spring, said that despite more stringent standards for entry, it’s probably easier than ever to be a successful agent.

“It’s probably easier to be a broker these days, since we have all this technology and other resources,” Osher said.

The Department of State date may not be a full snapshot of residential real estate brokerage in New York City, since agents leave frequently and the government numbers would not immediately reflect their departures.

The number of agents of brokerage firms’ Web site would more likely immediately reflect a drop in agents.  At the five Manhattan brokerages with the highest number of agents, expansion has generally slowed recently, according to an analysis by The Real Deal.

In April 2004, the Corcoran Group had 718 agents, which jumped to 839 agents this past April, a year-over-gain of 121 agents.  However, in the last seven months, the firm has only added 25 agents.

Similarly, Halstead Property added nearly 120 agents between April 2004 and April 2005, but has a net gain of only 4 agents in the last seven months.  Brown Harris Stevens added more than 50 agents in the year prior to April 2005, but only 12 in the last seven months.

Examining the Department of State numbers, much of the growth in real estate professionals has been in the number of salespeople — who are entry-level real estate agents — as opposed to brokers.  In Manhattan, the number of brokers has increased by 19 percent since 2000 to 11,577 whereas the number of salespeople has grown by 87 percent to 16,244.

While Manhattan, with its stratospheric apartment prices, has one agent for every 55 residents, Queens, with less attention given to its modest real estate values, has only one agent for every 132 residents.