Saturday, April 21, 2018
Business

Prospective real estate agents flood Florida classrooms as housing market swells

Hoping to capitalize on Florida's housing recovery, tens of thousands are seeking work as real estate agents, but the vast majority fail before they get to list their first home.

More than 42,000 took the state test needed to become a Realtor this year, nearly double the count in 2009, 2010 or 2011, Florida Division of Real Estate data show.

And about 16,000 agents earned the sales associate license allowing them to sell homes and collect commissions, the most this state has seen since the peak of the housing bubble in 2005.

But for all their excitement, many are stumbling off the block. The pass rate for test-takers fell 6 percentage points this year, to 37 percent. More than 26,000 people failed the test, more than even passed it in 2011 and 2012.

Florida has the most practicing real estate agents in the country: 26,000, nearly as many as California and New York combined, Bureau of Labor Statistics data from 2012 show.

But thousands of real estate agents let their licenses lapse during the housing bust, cutting the hundreds or thousands of dollars spent each year maintaining their jobs because so few commission checks were streaming in.

But the explosion of new agents now has some instructors recalling the hectic days of the boom, when classrooms were so full of students wanting to get in on the action that many had to sit on the floor.

Now, "everyone's neighborhoods are seeing sold signs … and all the economic news seems to be that things are improving," said Bob Hogue, who founded a St. Petersburg-based real-estate school. "They're inspired by the fact that investors are buying homes and paying cash. They think there must be something going on, there must be some opportunities here."

Florida saw 60,000 single-family home sales last quarter, a 17 percent jump over last year, and median home prices climbed 19 percent to $175,000. Tampa Bay alone has seen 33,000 home sales this year, the most since 2005, and median prices jumped 17 percent over last year, to about $155,000, listing data show.

As the market has gained over time, so, too, has the interest from agent hopefuls seeking to follow the money. Nearly 5,000 prospective agents took the sales-associate test in October, making it the busiest month since the state began collecting data in 2009.

Yet the plunge in test-takers' pass rates could signify that not everyone is fully prepared to join the business. Instructors blame the poor results on changes to the state's standardized exam, which flummoxed students who were directly taught to the old test. Florida real estate agents must take a 63-hour course and pass the exam with a score of at least 75 out of 100. The exam can be re-taken.

Though the Internet has given certain powers to buyers looking to find their next home, few sales start and end online: Only 9 percent of homes were sold directly by owners last year, according to the National Association of Realtors. Online housing data can be outdated or wrong, and many home shoppers still say they would rather have an extra set of eyes on probably the biggest purchase of their lives.

The jump in licensed Realtors could inject new competition into the market, allowing buyers and sellers to be more selective. But many of the people seeking their license to sell do it as a part-time job or hobby. Agents on both sides of a typical deal split a 6 percent cut of the sales price.

And though some agents in luxury or waterfront markets earn more, real estate agents last year made an average of $40,000 in Florida, Bureau of Labor Statistics data show. In Tampa Bay, where about 3,000 worked as sales agents last year, the average pay is closer to $36,000.

Instructors said some of their students sold homes before the bust and are now feeling more confident about jumping back in. Others are new and like the idea of setting their own hours after losing jobs elsewhere.

"Some are seeing it as a second career," Greater Tampa Association of Realtors CEO Carol Austin said. Her Realtors group, which saw 50 new members each month in recent years, now adds twice that many each month.

In one of the more surprising shifts, instructors said many of their agent hopefuls are recent high school or college graduates or in their 20s. Many are seeking to join a family business or dodge still-shaky job prospects.

"We've had several who were right out of high school," said Robert Gordon, a Tampa sales-associate teacher. Of one college student in his class, he said, "She doesn't know what she wants to do, so she's trying real estate."

Drew Harwell can be reached at (727) 893-8252 or [email protected]

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