In the midst of what some analysts are calling the worst housing market since the Great Depression, some of the area's larger real estate companies are continuing to recruit and train new agents--at the same time that many in the business are falling by the wayside for lack of income.
As sales fell by close to 20 percent here last year, nearly 1,900 members of the National Association of Realtors left the local chapters of that organization--about 10 percent in the metropolitan organizations. And figures supplied by the real estate commissions in Virginia, Maryland and the District indicate a general decline in the number of agents applying for license renewals. Yet companies such as Shannon and Luchs say there are plenty of people to take their place.
"If you don't recruit, no matter how good or bad the market is, you're going to die," said Michael Briggs, sales training manager for the firm. "We've always trained around 200 people a year," he added, "but now they're a different group."
"Adding agents in a market like this is a very rational response to depressed sales," said Peter Miller, a broker and real estate consultant who has a one-man office here.
"There are liabilities," Miller notes, like the amount of time the broker must spend with each agent and the cost of office support. "But the value is that you expand the number of contacts," he said.
As the Reagan administration continues to lay off government personnel, many workers are looking for a safety net, brokers say. "There are a lot of people coming in saying, 'I don't know what's going to happen with my job, and I want to be ready,' " Briggs noted. "In a world where people's hours are being cut back beyond their control, they don't want to cut their standards of living."
Long and Foster Real Estate recently held a seminar in Dale City where Herman Methfessel, a vice president and general manager of the office there told an audience of 20 hopefuls that the real estate business is "depression proof." Agents have personal independence and the profession has the potential for high income, Methfessel maintained. Long and Foster, he told them, is one of the local firms continuing to report high sales volume.
He was also frank about hard times, saying that finding financing for home buyers at interest rates they could afford was still a major hurdle. Some savings and loan associations and banks are making limited concessions in their income requirements for buyers, he said, but generally, "lenders aren't doing that much lending."
Some observers of the local real estate market maintain that the current housing slump will push out the part-timers and amateurs who flocked to real estate sales during the high-flying 1970s. They also point out that the complications of arranging financing for buyers today make real estate sales a lot tougher than it once was.
Rufus Lusk III, of the Lusk and Son real estate publishing firm, observes that part-time agents and not-so-serious full-timers have been abandoning sales in large numbers, leaving behind the dedicated, full-time agents who have always been the backbone of the industry. "What we've had is a real shake-out in the market," Lusk said, "and that isn't necessarily bad."
In recognition of the added complication of real estate sales, the Federal Reserve Board was recently considering a proposal to make brokers subject to the same kind of truth-in-lending disclosure regulations that lenders face. The real estate industry outcry against the idea--on the grounds that it would impose too much of a burden on firms--helped shelve the idea.
In the meantime, the professionals who are in for the long haul are doubling their efforts, local brokers say.
"The agent of the future is a lot more fundamentally solid," said Shannon and Luch's Briggs, "and he's going to have to know how to sell." During the currrent downturn in sales, he contended, "the agents who are hurting are the mediocre ones."
In better times, buyers would come into an office ready to buy, brokers said. "You only had to be an order-taker, you didn't have to sell," Briggs recalled. But today, he said, "People come in asking hard questions, and you've got to be able to give hard answers."
"In the past you didn't have to know much about financing, you could leave that to the lender," he said. "The current emphasis is on complete and thorough knowledge of customer needs," he said.
"Even though the market is down we can always use new agents," said Joyce Caughman, director of Long and Foster's career development center. "A market like this flushes out the weaklings," Caughman continued. "A lot of people aren't really suited to being agents," she said. "It's hard work--and a lot of people don't expect that."
Caughman said her firm works with about 20 agent candidates a month at their two training centers--one in Merrifield, the other in College Park. Some of the newly trained agents replace part-timers who couldn't afford to make a go of it and fell from the ranks, she said.
Caughman acknowledges that selling real estate is much more complicated than it once was. "Financing has gotten terribly difficult and training has gotten much more necessary than ever," she said. "We consider training to be a tremendous part of our success."
Despite the falling statistics, Lusk thinks sales potential is high. "This is the best opportunity in years," he said, though closing a deal still won't be easy. "You really need expertise that can only come from professional management and professional training," he said.