Housing slump has some getting out but other agents put in longer hours

The Baltimore Sun

During the hot real estate market, this Roland Park brick Colonial probably never would have seen an open house.

"One and a half to two years ago, this house would have had multiple contracts within three to five days," said Jim Mikula of the Fells Point office of Long & Foster Real Estate, who, with his partner, is listing the property with a $419,900 price tag.

"We probably would have had a broker's open on Wednesday, and at that point you basically would have waited for some contracts to arrive at your office."

Given the market conditions, the agents paid Realtor.com $2,000 for a year's worth of showcase listing for all their properties. That premium service allows them to list the Roland Park house with 20 pictures and a detailed description - all with a box around it to make sure it gets noticed, said Mikula's partner, Jeff Tessmer.

As Realtors contend with a slumping housing market, many find themselves working harder - and often making less. They work longer hours, show houses more times, see more deals crumble and spend more on advertising because houses stay on the market so much longer - all to see paychecks cut by as much as 40 percent.

Mikula estimates he works as many as 15 hours longer per week to get the job done.

"We don't have as many buyers knocking on our doors as we used to," said Wayne Curtis, another Realtor in that office. "I just spent $1,000 advertising a property in Catonsville in the Washington area, because I thought it would have appeal for Washington buyers. That bill is just sitting on my credit card drawing interest."

Agents often pay for at least part of the advertising they do out of their own pocket, with their company picking up the balance.

When listing properties in visible locations, agents can sometimes avoid at least some of the usual advertising expense by simply putting an open house sign up a few days early. Another way to curb costs is to use their real estate company's own couriers to get listings out to top agents in other Long & Foster offices rather than using regular mail.

"We try to do a lot of things that don't cost us money," Curtis said.

That's because the number of homes sold in Baltimore and the five surrounding counties fell 12.36 percent to 2,921 in July, compared with 3,333 homes in July 2006, according to MRIS, the multiple-listing service.

With listings at a record 19,985, homes took an average of 80 days to sell, compared with an average 55 days in July 2006, when inventory was 16,749.

In this climate, it takes lots more work to close deals - an additional five to 10 hours of work per transaction, he estimated.

"From the peak year of boom it's been like taking a 20 percent pay cut," Curtis said. "That's not easy for anyone to do."

In some cases, the market shift has turned agents away from the business.

In the Fells Point office, where sales volume is down about 25 percent year-to-date, the number of agents has dropped by 30 from a year and a half earlier, when there were 95 agents, said William Cassidy, branch manager. Some of them went to other companies; some simply left the business altogether. Most had been in the business fewer than three years.

"Now you've got to use modern tools such as the Internet and old ones like fliers in the market," said Cassidy, who has been in the business more than 30 years. "These are things the agents should always do, but when houses were flying off the market you might not even have time to do."

Gina Gargeu, one of the owners of Century 21 Downtown, said she makes sure all her listings have pictures, gets her clients to paint doors and uses professional stagers who come in, rearrange rooms and often take items out to declutter the space.

"Anything that would give my listing an edge," she said. "You can't just sit back and hope the transaction works - you really have to be actively involved. I could work 60 hours, and a lot of it is just salvaging - trying to keep deals together."

Those who have been in the business a while have seen this kind of market before.

"A lot of people are in shock, but it's no shock to me," said Ilene Kessler, president of the Maryland Association of Realtors and a Realtor with Re/Max Advantage who sells in Howard and surrounding counties. "It is harder in that you have to hold hands longer, be patient and be creative. Your house has to look a lot better than the competition's, and it has to be priced right."

Even while many agents report declining business, others thrive.

Melvina Brown, a Realtor with Re/Max 100 in Ellicott City who sells primarily in Howard County, said she's on track to match last year's sales volume - although not that of the year before.

"I've gone back to the basics," she said. "I only work with the people I know and the people who are referred to me. I don't have to work with strangers."

Advertising for new clients can be an expensive proposition.

Gone are the days when Brown spent $30,000 a year plastering herself on every grocery cart in the county through advertising - something she did for at least 10 years before deciding to reduce costs.

"I cut that out two years ago," she said. "My business is almost 100 percent better. I'm working with people I know, not people who read about me on a grocery cart who have me running all over town showing them houses."

Communication with clients takes on even greater importance since homes typically stay on the market for four to six months.

"Sometimes I go in the office, and people are saying, 'The market is terrible,' " Brown said. "I don't associate with that. I stay around positive people. I'm loving life."

Especially in a tight market, success breeds success, said Joseph T. Landers III, executive director of the Greater Baltimore Board of Realtors.

"Sellers are going to gravitate to people who have a bigger share of the market," he said. "In a different market people might not pay as much attention."

Despite the downturn, real estate continues to be an appealing career choice.

Nationwide, the number of Realtors first topped a million in 2004, and climbed to 1.4 million by the end of 2006, according to the National Association of Realtors.

Maryland numbers also have continued to rise. The Maryland Real Estate Commission reported 55,755 people held licenses at the end of June, up about 1,000 from the comparable period last year.

"There are people still coming in but not in the volume that they were," said Kathie Connelly, executive director of the Maryland Real Estate Commission, noting that the number of total licenses had risen six times that amount the year before - by 6,000.

There is a lag in the numbers, industry experts say, because in a hot market people start to study to become agents and are still on that career path even when the market shifts.

Longtime agents have an established client base that allows them to continue to succeed, though some close to retirement may decide they aren't interested in enduring the challenges of another down market and opt to get out of the business.

And the number of licensed agents in the state is expected to rise higher still this year because of a new agreement allowing Pennsylvania agents to apply for a Maryland license without taking an exam and because salespeople for homebuilders are required to be licensed by October, Connelly said.

From Joseph McClary's vantage point, evidence of the real estate slowdown is just starting to come into view, even though the market started its downturn after peaking two years ago.

McClary, director of technology, education and special projects for the Association of Real Estate License Law Officials, said he has started to see a slowdown in new real estate licenses being obtained in the past two months. His observations are based on 35 states that run new licenses through a database to check them against people who have lost licenses in other states. Maryland does not participate, he said.

Those numbers are down 10 percent to 15 percent, he said.

"It takes people a while to figure out it's a down market," he said.

Newcomers to the business may tough it out for a while before the lack of a steady paycheck forces them to rethink their career choice.

"People are just figuring out that it's harder to make a living in real estate than they thought it was going to be," McClary said.

As for that Roland Park Colonial, the Aug. 5 open house was its first since being listed less than a month ago. It still hasn't sold, Tessmer said yesterday, and has been taken off the market, at least temporarily.


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