Home Subscribe Las Vegas Review-Journal
  Jobs Cars Homes Shopping Travel Weddings Golf Best of Las Vegas Photo   Search:

RECENT EDITIONS
Mon Tue Wed Thu Fri Sat Sun

Business
Apr. 09, 2007
Copyright © Las Vegas Review-Journal

HOUSING SLUMP CASUALTIES: Real estate exodus in LV?

Agents taking second jobs or leaving sector altogether

By HUBBLE SMITH
REVIEW-JOURNAL
Housing
Housing in Las Vegas
More Information

Realtor Kurt Lehman stands in front of a house that he recently sold. Lehman has worked various jobs in the past year.
Photo by John Locher.

A few years ago, it seemed as if everyone knew someone in Las Vegas who was getting their real estate license and cashing in on the housing boom.

It was a time when all an agent had to do was stick a "For Sale" sign in the front yard and wait for offers to roll in.

Membership in the Greater Las Vegas Association of Realtors grew from 7,959 in January 2003 to 16,379 in January 2007, gaining 1,700 to 2,500 members a year. Statewide, the number of licensed real estate agents jumped from 17,718 in 2000 to 36,785 in 2006.

Now that home sales have dropped by 26 percent and buyers have gone into retreat waiting for the market to bottom out, Realtors are working harder to earn their commissions. They're having to pick up the phone for "cold calls," knock on doors and spend more money on marketing.

Most Popular Stories
  • VANISHING AT WARP SPEED
  • Video maker sued by LV hotel
  • INSIDE GAMING: Adelson journey proves fruitless
  • Gambling stocks tumble on economic woes
  • DOWNTOWN LV: Land-value raise may lift Lady Luck
  • WORKPLACE STUDY: WORKING WONDERS
  • RENEWABLE ENERGY: Sunny days for Las Vegas
  • North LV retail center a shell of what it will be
  • Negreanu shines beyond table
  • Ex-commissioner accused of misusing investor cash



    • Some are finding new careers or taking second jobs.

    Kurt Lehman of Realty One Group worked various jobs over the past year to make ends meet, including account representative for a commercial cleaning service, home-improvement sales and consultant for incorporating in Nevada.

    Lehman, who became a Realtor in May 2001, recently made his first sale in several months with a home that was listed for $499,000 in the Canyon Ridge subdivision of Peccole Ranch.

    The home sat on the market for seven months even though prospective buyers were taking 40 to 50 fliers, featuring color pictures of the house, a week. The fliers cost about 50 cents each.

    That cost was in addition to the $400 Lehman pays for annual membership in the Realtors association and $270 every six months for Multiple Listing Services access fee.

    "The real challenge of staying in business," he said, "is if you're paying money and not making money, how do you generate new business?"

    Of the nearly 37,000 licensed real estate agents in Nevada, 21 percent were inactive as of October, Las Vegas-based Applied Analysis revealed in the Nevada Association of Realtors 2006 State of the Industry Report.

    Tony Silva, broker manager at Realty One, said a few of his 238 agents have left for other jobs, but he keeps their licenses hanging in his office while most of them work on real estate from their homes.

    "You have to understand the market. There's going to be tough times," Silva said. "They need to pay their bills, but we're encouraging agents not to lose their license. They worked too hard for it. Get another job and team up with someone in the office to watch each other's business while the other one works."

    Greater Las Vegas Association of Realtors officials said they don't have any names of people they know to be leaving the profession or turning to part-time work.

    Although the number of inactive licenses could suggest that a structural unemployment shift is afoot, Jeremy Aguero, principal of Las Vegas financial consulting firm Applied Analysis, noted that the share of inactive agents was nearly 32 percent in 1996, 29 percent in 2000 and 20 percent in 2004.

    Instead of focusing on inactive licenses, Aguero suggests observers look at the number of agents in relation to overall population. That figure stood at 19.8 licensed real estate agents in Nevada per 1,000 population in October, the highest rate on record, the Nevada Division of Real Estate reports.

    That's 32.9 percent higher than the 14.9 licensed agents per 1,000 population in 1996 and 55.9 percent higher than the 12.7 figure in 2000.

    "Regardless of (home) price escalations or declines, it is highly unlikely that the volume of transactions reported between 2003 and 2005 will be repeated during the next 24 months," Aguero said, "and it will be difficult if not impossible to sustain this level of employment."

    Nevada's real estate sales and brokerage businesses directly employ more than 48,000 people, more than double the number in 1997, and generate nearly $2 billion in personal income each year, the report said. The secondary effects of the industry's employment support an estimated 95,670 positions and $3.4 billion in annual personal income.

    Real estate professionals and their direct employees generate an estimated $138.3 million annually in major state and local revenues, including $50.4 million in retail sales and use taxes and $83.4 million in property taxes.

    These figures do not include real property transfer taxes that effectively operate as a 0.39 percent to 0.51 percent industry-specific gross receipts tax on the majority of residential and nonresidential transactions, Aguero noted.

    Real property transfer taxes are estimated to generate $165 million in state general fund revenues and more than $70 million for Nevada's local governments during fiscal year 2006, he said.

    Although the report provides an optimistic outlook for the industry, it cites the existence of a market imbalance marked by sharply higher home prices and a smaller share of the population capable of buying new and existing homes.

    Silva said Realtors need to educate their clients and be honest about market conditions.

    "It's got to be both sides," he said. "You can't get greedy on either side, buyer or seller. It's not 2004."

    With subprime lending's meltdown, Las Vegas will see a resurgence in Federal Housing Administration and Veterans Administration home financing, Silva said. There are nearly 11,000 homes on the Multiple Listing Service under $304,000, which is the FHA loan cap, he said. Another 1,584 homes on the MLS are "short sales," or homes being sold for less than the mortgage balance owed to the bank.

    Housing affordability is an acute concern as Nevada now ranks among the nation's least affordable state, Aguero said.

    "The cost of housing has increased at a tremendous clip during the past three years, although 2006 has reported some moderating to this trend," he said.


    NEVADA REAL ESTATE LICENSEES
    Year Active Inactive Total
    1979 7,368 2,118 9,486
    1984 6,055 7,601 13,656
    1989 7,378 4,225 11,603
    1994 9,831 5,582 15,413
    2000 12,578 5,140 17,718
    2006 28,899 7,886 36,785
     
    Source: Nevada Division of Real Estate


    Leave Your Comment 34 Reader Comments
    Terms & Conditions
    The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor.

    Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
    Current Word Count:

    Sheryl Crow wrote on April 26, 2008 11:03 AM: "I'm leaving Las Vegas, lah, lah, lah"!


    dee wrote on May 25, 2007 08:27 AM: After being in Las Vegas for 19 years, I bet almost all your respondents came here for the same reason, to make a better living in a booming state. Yes their are very greedy people here who have cashed in on the housing market over the years, but there are also the realtors who got in as a career who have always wanted to be in this profession and like any job, you go in it for a reason. Can we police are streets by hiring non union police that are not payed as much? Casino workers? teachers? Every line of work you could hire someone cheaper, is that what we want?
    A lot of spanish own 3-4 homes. Then you have the speakers who sell people on the idea of getting rich buying homes, and lenders who wanted to cash in on the boom too.
    I serve my client well and will always do my best on their behalf.


    Aaron wrote on May 22, 2007 09:38 AM: The only thing that affected me about this article is that he's spending $.50 per color flier. Either buy a decent printer and find toner or ink on ebay or buy a larger quantity through a wholesale print company such as 4over. I print my materials for closer to $.04 a page in full color. If you think 50 cents is a fair price get out of real estate and open a print service. You'll make a bundle.

    Big Dane, why would anyone trust one of the most difficult transactions to a company that is content with making "nothing"? I won't pay 50 cents for a flier but I sure don't want a professional service that's willing to work for "nothing".


    chris wrote on May 19, 2007 01:29 PM: too bad a good hard working blue collar town like vegas has finall sold their souls to the devil"corporate america" Shame on you!!! now reap your whirlwind


    chris wrote on May 19, 2007 01:25 PM: the real estate market in vegas needs to bottom out to get rid of the greedy mercedes driving bastsards who dont give a shit about their fellow coworker.I hate to hear about people losing their jobs but it has to happen,too much big company realestate groups in vegas.bad for long term business!!!!!!!!


    Big Dane wrote on May 03, 2007 07:28 PM: They also didn't point out the days of 6 percenting listings are over. Flat fee companies like CongressRealty.com and Forsalebyowner.com charge 300 bucks or so to list your property. A buyer's agent makes their 3 percent, but the listing agent makes nothing. Thus less money per listing which leads to fewer agents.


    sdf wrote on April 27, 2007 03:02 PM: i need more garage sale adds
    j jh tj r t t t t t t t t t t iambobhss


    bob wrote on April 27, 2007 03:00 PM: i hate review journal


    Bubble Believer wrote on April 25, 2007 05:58 PM: It is plainly obvious Mr. Agent and Agree with Mr. Agent are the same as they both misspell 'whiner'.

    Anyhow, I don’t see how an article from CNN/Money about the DOW beating 13,000 has anything to do with Las Vegas real estate. However, this article, about Las Vegas leading the nation in foreclosures, does:

    http://money.cnn.com/2007/04/18/real_estate/bc.usa.economy.foreclosures.reut/index.htm

    Looks like another desperate real estate agent in a crashing market exhibiting some bizarre animalistic behavior.


    Jon Hamel wrote on April 25, 2007 02:36 PM: T0: darthvader,

    It's obvious that Mr. Agent and Agree w/ Mr. Agent are one in the same person. I think you are loosing your time in your efforts with Mr. Agent. He is one who has empirically shown that he cannot reason. Now, whether this is by choice or perhaps due to the results of natural selection we will never know.

    Regardless, I think we could agree that Mr. Agent deserves one of those Darwin awards.


    Read All Comments