Not so long ago, real estate was a favorite landing spot for all kinds of people who had no other place to go.

When corporate downsizing created thousands of displaced managers and executives, many enrolled in the many real estate courses offered by agencies in virtually every city. For the agencies offering the courses, it’s a “can’t lose” proposition. The courses generate some revenue, and some of the graduates will become successful professionals for the company.

It’s a great career for those who are well suited for it. If you have some talent and don’t mind working hard, you can make a lot of money and achieve a great deal of personal satisfaction. But like any other field where the barriers to entry are relatively low, real estate can attract too many people during the good times, resulting in a shakeout when things take a downward turn.

In California, the number of licensed real estate salespeople in May was up to 387,077. That’s one real estate license holder for every 70 people who are 18 or older, based on the Census Department’s 2006 population estimate. Such numbers are unsustainable.

Real estate licenses haven’t been the only hot item. During the boom, thousands became mortgage brokers – another business with relatively low entrance requirements and standards that have varied widely from state to state. (The Mortgage Reform and Anti-Predatory Lending Act of 2007, which passed the House but is still pending in the Senate, would create new, uniform standards nationwide.)

We’re seeing signs of the inevitable shakeout now at the local level.

• The Sacramento Association of Realtors is offering classes aimed at helping residential agents move into more stable areas such as commercial real estate, according to the Sacramento Business Journal.
• The number of agents in Georgia letting their licenses lapse is growing faster than the number of licenses held, the Atlanta Business Chronicle reports.
• In Minnesota, the Duluth News Tribune reports that the number of mortgage originators in the state has dropped from 4,000 licenses at the start of 2007 to 1,200 by December.

As much as I hate to see anyone fail, there’s no way around it. An oversupply in any market must eventually be resolved, and it rarely happens without some pain.