231,000 Calif. agents drop license during slump

January 11th, 2013,  by 

 OC Register

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Four out of every 10 Californians with a real estate license in 2007 let their accreditation lapse in the five years since the housing bubble burst, state figures show.

More than 231,000 agents either let their licenses expire or had their licenses revoked since November 2007, when the total number peaked at nearly 550,000 licensees, figures from the California Department of Real Estate show.

Just over 100,000 new licenses have been issued since then, bringing the current total to 418,000 as of October, the most recent figure available. The latest tally is down 24 percent from the November 2007 peak.

“A lot of people in that time just did not renew their license, and the number of people taking the license exam dropped, from 13,000 a month to 2,000 a month,” observed Duane Gomer, owner of the Duane Gomer Seminars real estate school in Mission Viejo.

State figures show that the number of license holders fell month to month in 56 of the past 59 months.

However, Gomer said that the pace of decline has slowed as the housing market picked up. License renewal rates have increased in the past year, he said.

“Now, it’s flattened,” he said of license declines. “They’re not dropping as fast.”

While only a fraction of licensees actively work as real estate agents – some are inactive, while others work as mortgage brokers — California Association of Realtors memberships have fallen at the same pace as licenses.

CAR figures show that Realtor membership in the state dropped 23 percent over the past five years, falling to 156,157 as of October. The association had 203,574 members in November 2007.

The number of people taking real estate license exams spiked to 2,788 in October – the highest number in 15 months. Still, 2011 and 2012 had the lowest monthly exam averages of the housing recession.

Len Herman, president of the Orange County Association of Realtors, said the number of new agents taking the association’s new agent orientation course has held steady at 80 to 130 in the past few years.

Herman said that 2007 statistics were “an aberration,” with ranks of licensees swollen by people who saw real estate a a way to get rich quick. Then the slump hit, and a lot of new licensees exited the business. First-year attrition rates typically are above 80 percent, he said.

“A lot of people tested the water a little bit and went out,” Herman said. “I think they were shocked at how hard it is.”

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