Zach Wasser for CNN Business
As house prices skyrocketed during the pandemic, people began to swiftly approach the real estate industry in an attempt to cash in on the housing gold rush.
But this surge in new estate agents, coupled with a sharp decline in the number of homes listed for sale over the past year, has resulted in a strange phenomenon: There are now more realtors in the US than homes for sale.
More than 130,000 people became realtors during the pandemic, according to the National Association of Realtors. NAR says its membership has reached a record high more than 1.5 million participants in May. However, during the last month there have been few over 1.3 million homes for sale, down 27% from the same period last year, according to Redfin.
According to NAR chief economist Lawrence Yoon, the number of realtors rarely exceeds the number of homes for sale. Especially now, in the midst of the spring shopping season, Yun said that the number of realtors is unprecedentedly higher than the number of homes for sale over an extended period.
“This is very unusual,” Yun said. “It is very unusual that this continues for several months, and maybe until the end of the year.”
In Austin, which is considered one of the most competitive housing markets in the countryAccording to the Austin Board of Realtors, there were more realtors than homes for sale last month at a ratio of eight to one.
Sebastian Battle got his first job as a realtor last August when he joined the Austin office of brokerage firm Keller Williams. He said the job was harder than he thought, mainly because there are so few homes for sale.
“I would say the hardest part about being a new real estate agent, especially in Austin, is just the level of competition,” Battle said. “To be honest, I definitely expected more people to buy and sell.”
Before obtaining his real estate license, Battle sold apartments in San Antonio. He and his girlfriend Alison Wingate then returned to Pfluggerville, an Austin suburb, where they both grew up.
When they decided to move, Wingate was already working for Keller Williams in an administrative position. She encouraged Buttle to get a real estate license and work there too. Wingate said she knew Austin house prices were significantly higher than San Antonio and thought Buttle had the personality that would make him a successful realtor. But she said she underestimated how competitive the market in the Austin area would be.
“I didn’t know the market was so crazy that they were asking so much over the asking price and the stocks were extremely low,” Wingate said. “It was something I didn’t expect.”
Housing prices in the Austin metro area according to Redfin, in May rose 42% over the same period last year – the largest jump in prices among major metropolitan areas in the United States. This spike in home prices was driven in part by the bidding war. Redfin found that nearly three out of every four homes sold in Austin (72%) were sold above asking price, with the average home having a 9% premium in May. Redfin highlighted that more than 1,500 homes have been sold in the Austin metro area this year for at least $ 100,000 over asking price. At the same time, there were 22 of them last year.
Clayton Bullock is an Austin native and second generation realtor who has worked in and around the city since 2003. He says Austin has “experienced a historic price reset.” And I do not think that we will ever return to the previous prices. “
Bullock says the spike in home prices helped his business, but not as much as one might think.
“We don’t necessarily, you know, make ten times the money, because there just aren’t enough deals,” Bullock said. “Sellers don’t want to sell because they have nowhere to go. And so, although the seller can claim a premium if he has no place to land, he is unwilling to put it up for sale. “
Cindy Goldrick says she has never seen anything like the current market in Austin, where she worked as a real estate agent since 1981.
“The market is now the most challenging I’ve ever seen when you’re working with a customer,” Goldrick said. “Listing, I mean, is money in the bank. There is hardly a listing that goes on the market and does not sell for a very, very, very short period of time. “
One of the reasons for Austin’s housing boom is big technology. Companies like Tesla, Facebook, Apple, Google and Oracle either relocated or relocated some of their businesses to the Greater Austin area, bringing with them highly paid technical workers.
“They will continue to employ thousands of jobs over the next few years,” Bullock said of the tech giants. “This is not a job at the post office. These are senior executives and computer technicians in six or seven figures who are looking for homes mainly in Central and West Austin, and we have no housing for them. ”
Tesla founder and CEO Elon Musk wrote about it in April, stating that “there is an urgent need to build more housing in the Greater Austin area!”
There were 8,395 homes for sale in the Austin metro area in May, down 21.5% from the same period last year, according to Redfin.
Austin was one of the 87 largest urban areas in the country. fourth most popular destination for people to relocate, according to Redfin user search results. Nearly 40% of home searches in Austin on Redfin were carried out by people outside the city, and Redfin found that San Francisco was the most popular destination for home seekers in Austin.
Goldrick said the tender wars were good for her business, but not for her mental health. She said her brokerage firm Wilson & Goldrick Realtors plans to double last year’s sales. But after a year in this hectic market, she starts to feel burned out.
“In a way, I would like him to calm down a little, you know, especially when we represent the interests of buyers,” said Goldrick. “But I really don’t think this will happen in the near future.”
For Battle, his first year as a realtor was a rough one. He hasn’t had to deal with a buyer or seller for several months, but he hopes that now his fortune is beginning to change. He represents a buyer who recently accepted a bid of over $ 800,000 for a home for sale for $ 780,000 in Leander, Texas, a suburb of Austin. The deal closes on July 13th.
“I can’t say this is an impossible market because there are people out there who do it,” Battle said. “I understand that this business is growing exponentially. You can ask one salesperson to change your entire business, your entire landscape, your entire financial situation. “