While the national housing slump has reduced membership in the Maryland Association of Realtors by 13 percent since its last convention, 650 of the association's real estate agents and brokers meeting here last weekend maintained that hard times have strengthened their profession.
"When the market was hot, a lot of people got into the business who had no buiness being in it," said agent Jean Darcey who sells commercial property out of the Annapolis office of the Baltimore-based Charles H. Steffey brokerage. She said that while current market conditions drove some qualified professionals out of real estate, most who left the business didn't have the drive or dedication required to do the job right in the first place.
In the Washington area, membership in the Montgomery County board fell to about 4,400 this month, from about 5,000 a year ago, while the Prince George's County board numbers dropped to about 2,600 from about 2,900, reported E. C. Hilley, executive vice president of the Maryland association. Hilley said membership throughout the state is down to about 16,300 this month compared with more than 19,000 a year earlier.
The decline in membership didn't affect convention attendance "as much as we were afraid it would," Hilley said, pointing out that attendance this year was up slightly over last year despite the continuing drop in sales. He said registration peaked in 1978 when 850 attended.
If the Realtors had any doubts about the severity of the sales slump and its effect on the housing industry, their national president, Julio S. Laguarta, was frank: "We are right smack in the middle of a real estate depression--not a recession--a depression," he declared.
The head of the National Association of Realtors went on to say that while Maryland's booming resort area and its geographic proximity to several major population centers has "somewhat insulated" the state's real estate industry from what nationally is being called the worst housing market since the Great Depression, Laguarta said, high interest rates and people's inability to buy a home is having a negative effect on the county as a whole.
Seasonally adjusted statistics compiled by the national association indicate that sales of existing homes will fall to about 1.9 million units this year, compared with more than 2.3 million in 1981 and 2.8 million in 1980.
"It's time we turn the damn thing around," Laguarta said, because homeownership "is the tap root of the American system." Homeowners are involved in their communities, he maintained, while renters often feel they are living in the "landlords' community, or the company community or the government's community."
As a consequence of the dramatic drop in home sales, Laguarta noted, membership in the regional boards that come under the umbrella of the Chicago-based national organization fell to about 695,000 at the end of 1981 from 765,000 a year earlier.
The organization revised its budget earlier this year in anticipation of a drop to about 625,000 members by the end of 1982, he said, but now is projecting that the roles will drop even more, to about 610,000. In addition, "we are projecting in 1983 about 575,000 members," he said.
"Some of that attrition is healthy," Laguarta said, because "clearly there are not enough transactions in the marketplace to support 695,000 people." He added that many of the industry's drop-outs "lacked the skills or desire" to understand and cope with the growing number of alternative financing options that are fast becoming the industry standard at a time when conventional mortgage funds have become scarce and expensive.
However, while many Realtors continue to fall from the ranks, others are joining. Gloria Farrar, a Prince George's County school teacher, received her agents license earlier this year and is now affiliated with Long and Foster's Fort Washington office. Farrar and her husband, Mark, own several rental properties, she said, and "I decided to see what it would be like selling."
Farrar's husband, a personnel specialist at the Department of Labor, said he is studying to get his license and wants to become an agent soon. While the real estate industry may be having some problems, he said, "it's here to stay."
Most of the agents and brokers interviewed here said that the dwindling number of active agents and brokers was not a harbinger of doom for the industry. They maintained that, at a time when some industry observes say that homeowners can handle transactions on their own, or can work with "discount brokers" who limit their involvement and earn smaller commissions, the difficulties involved in finding financing and buying a home require the services of a qualified, full-service professional.
Gloria Farrar tried to sell one of her own properties in 1980, before she got her license, but found that, without training, the task was too complicated, she said: "When you're on your own, you're on your own." Agents earn their commissions by determining what price to set, arranging financing, placing ads in the newspapers and being available when prospective buyers ask to see a home.
Broker Mark Holloway, a partner in the Wicomico County firm of Ahtes and Hanna in Salisbury, agrees: "Probably now more than ever before, someone selling their house needs the expertise of a Realtor," he said. "We don't see many people trying to sell their own homes in our area," he added.
Laguarta--who heads the Laguarta, Gavrel and Kirk brokerage in Houston, but has been traveling extensively and speaking on real estate since becoming president of the Realtor group last fall--said that the national association and its component local boards make up "the best, most impressive real estate lobby organization in America."
He said the monopolizing by various government agencies of funds available for lending is a major factor contributing to the tight money supply and high interest rates and that "political activism" in Washington, as well as on state and local levels, is necessary to put a stop to it.
The group's carefully orchestrated campaign of writing letters to members of Congress, deploring the U.S. budget deficit and inflationary government spending, contributed to reducing the size of the proposed federal budget for fiscal 1983, he said. However, "the real tough part for you and I will be to monitor every bill that comes out of Washington to see that they fit within that budget," he said, noting that "we already have overspent the 1982 fiscal budget by 45 percent."
"The government is borrowing all the damn money and there's no money for people to borrow," lamented broker Samuel C. Hoff of Westminister. Hoff and his wife, Georgia, who is also a broker, own their own firm in Carroll County and also deal in insurance. Hoff said his business used to be half real estate, "but due to the economy, the large portion is now insurance."
"Individuals have had to cut their budgets, so the government should have to cut theirs," said Dorothy Munshaur, a Carroll County broker with Glen Falls Haynes Realty in Westminister. In addition, income taxes should be cut to increase the purchasing power of the American consumer, she said.
Although only a few of the Realtors said they were familiar with the advent of "electronic mail" systems that rapidly delivers statistical data and other correspondence by computer, Laguarta predicted that the "state of the art increase in communications" would soon allow "instantaneous mortgage money commitments" to be made moments after a purchase contract is signed.
The mood at the convention--which featured demonstrations and exhibits by several data management firms, computer companies and lending institutiions--was "very optimistic and very positive," said the state association's Hilley. Contributing to the optimism was Ocean City mayor Harry Kelley, who credited the agents and brokers for contributing to Ocean City's still-booming housing market despite "terrible" economic odds: "We couldn't do it without you," he said.
The convention was also addressed by attorney and author Keith DeGreen who told the Realtors they would prosper selling real estate if they maintained a positive attitude and made use of a system he calls "no-fail" financing.
"We must either master the thing we call 'creative financing' or we're going to find ourselves in another business real quick," DeGreen said.
While the media persists in telling prospective purchasers that inflation and interest rates have made homes too expensive to buy, he said, it's the Realtors' responsibility to tell them how much they will lose if they don't buy now, how much they will make if they do buy and how much interest on mortgage money costs.
"The media isn't going to do it for us, that's for sure," he added.