The decline in NAR membership may be the only positive to the current housing slow down. NAR is correct to classify the lost Realtors as victims of the downturn. What they do not say is fewer Realtors will greatly benefit the consumer and the remaining agents.

The prediction of a 4% decline in membership by the end of 2007 may be accurate. But, one month later (the end of January 2008) I believe the net numbers should be down over 10% from the high. Why the big drop in one month? January is the month when many annual payments and fees are due as a Realtor. Annual dues for NAR and MLS membership, some state license fees, combined with company charged fees including E&O, insurance, lock boxes, technology fees, etc. will become payable. It is expensive to be a Realtor with no income being generated. The industry is currently keeping many “ghost” agents on the books that may have already taken other jobs, or left the industry without telling anybody. Come January many of these agents will be removed from the active ranks.

A majority of those leaving the industry are being forced out by wiser and more sophisticated consumers. No longer can an agent put a sign in the ground and wait for the multiple offers to roll in, or buyers to line up at the door. Those agents that do not invest in continual training, innovative marketing tools, and hard work are not going to survive 2008. In a slowing market, with a glut of agents, consumers are able to differentiate the true career professional from the non performers. The non performers will be forced from the industry by their lack of competitive skills and ultimately the lack of income.

In 2001 there were approximately 800,000 Realtors in the US. From 1979 until 2001 we had a very short range of membership, from approximately 700,000 – 825,000. At our peak this year NAR topped 1,400,000 members, an amazing increase in a 5 year period. In 2001 there were over 6 transactions completed for every Realtor. In 2005 when housing sales set a historic record, Realtors averaged a little over 5 transactions. In 2006, when the market slowed, Realtors averaged a little over 4 transactions, and this year will be even less. This trending downward was unsustainable and unhealthy for the industry.

As an industry we are very inefficient. The better quality agents and companies can each handle professionally two to three times the business they currently enjoy. With volume comes the cost savings and professional improvements consumers, agents, and companies all seek. As the business soared from 2001-2005 it was almost too easy. Many entered the industry seeking easy money with little training, direction, oversight, or consumer tools. It may sound counter to what may be good for you, but the housing decline can actually help foster the return of increased volumes and profitability for qualified agents