Housing bust takes big toll on Realtors

Housing bust takes big toll on Realtors
3,500 left real estate industry in Michigan in the last year alone.
Nathan Hurst / The Detroit News

STERLING HEIGHTS -- Thousands of Michigan real estate agents -- some with decades of experience -- are getting squeezed out of the business, casualties of one of the worst housing slumps in state history.

Agents who prospered a few years ago, when consumers' appetite for real estate seemed insatiable, now are struggling or switching careers.

Michigan agents say a lack of home buyers for the glut of houses on the market is driving them from the business. Those who do manage to move a property are realizing lower commissions as a result of dampened real estate prices.

In the last year alone, the Michigan Association of Realtors has lost 10 percent of its membership, or about 3,500 agents. Membership now stands at about 30,000, the trade group said. An untold number of agents have taken second jobs to weather the slump or have put their licenses in "escrow," basically not using them until the market turns around.

Metro Detroit has been among the regions worst hit by the housing slowdown, which started in Michigan in late 2005 and hit the rest of the nation early this year. In September, Realtors sold 3,703 homes in Metro Detroit, down from 4,184 in September last year and 4,456 the year before that, according to multiple listing service Realcomp II Ltd.

Real estate agents across the country are leaving the business as the sales downturn worsens. The National Association of Realtors is predicting a 4 percent decline in its membership by the end of 2007, from a record high of 1.4 million members at the beginning of this year.

When Metro Detroit's real estate market entered its downward slide, John Kurczak, a 17-year veteran of the industry, thought he had the tools and experience to ride out the storm.

But after watching the agency he worked at for 16 years close its doors and the number of homes he sells drop off dramatically, Kurczak, 36, is wondering just how much longer he can stand the 14-hour days and long stretches between commission checks.

"I've reinvented myself and spent countless hours trying to get ahead," said Kurczak, who is looking at job offers from other states and in other fields.

"But it's not always paying off. It's a shame -- I can spend all this money trying to market a home, but nobody's buying. I only get paid when the fat lady sings."

Strategies change
Agents still in the business said they're fighting hard to keep ahead.

Some have changed their advertising strategies in an attempt to grab the attention of scarce buyers.

Kurczak, now an agent at Keller Williams in Sterling Heights, said the transition away from his old Century 21 AAA digs in Eastpointe was a rough one. Forced to find a new professional home after the Eastpointe office was shuttered last year, Kurczak renewed his focus on developing and maintaining his own Web site, while keeping in contact with anybody and everybody who could be a sales lead.

Others, like Maureen Francis of SKBK Sotheby's Realty, in Birmingham, have started offering potential customers their own brand of real estate news analysis.

Francis, who specializes in selling luxury properties in Oakland County, started a blog, mioaklandcounty.com, with her husband, also a Realtor. She regularly updates the site with commentary on local and national real estate news and said her site has been instrumental in connecting with customers.

"It lets them get a better idea of what's going on in the market," Francis said. "It's honest and shows what kind of agent I am."

Dreams die
Being honest and tech-savvy isn't enough to stay afloat as a Realtor, Kurczak said. And with job offers coming in from other fields with companies in other states, Kurczak said his days working Metro Detroit's property market likely are numbered.

Kurczak said his current job is one that's only gotten harder as friends and even family members have fled the real estate business while he's tried to hold on.

Both of his brothers got their real estate licenses within the last year. But after seeing Kurczak struggle -- including a situation last winter in which Kurczak was dropped by a couple looking for a home after he took them on 70 private showings -- both brothers have decided to wait to get in the business until the market improves.

Sandy Covert, 33, said she wishes she had done just that.

Lured by tales of plump paychecks and the allure of a job that came with a business card and no uniform, Covert decided in November 2005 to ditch her merry-go-round of low-wage retail jobs for the world of Metro Detroit real estate.

Covert of Dearborn Heights said she did everything right -- taking licensure classes in the evening and spending lunch breaks studying economics and accounting volumes picked up from a used bookstore. She was assured by instructors and more experienced agents that there was no end to success in the real estate business, even with talk of a downturn swirling in the news.

But after thousands of dollars spent on preparation and six months working every angle of the market she could, Covert had sold only one home.

"It was a complete embarrassment," Covert said of the dilapidated structure a few blocks from her own Dearborn flat that she sold for a mere $4,500. "That was all I could sell. I tried harder at this than anything before in my life and I couldn't make it work. People don't believe what a tough business this is."

Covert was lucky, other agents said. Though she abandoned her dreams of real estate success after a year, she was able to return, albeit reluctantly, to her career in retail.

Marlene Bryant, a 52-year-old instructor at a private school in Toledo, said she stopped teaching in 2002 to try her hand at selling real estate around her hometown of Monroe. But after three years, she said she's happy to be back to her life of guaranteed work hours and a pension.

"It was like a glamorous dream job," Bryant said. "I drove a Cadillac and took people to nice places. It was great while it lasted."

Others like Kurczak, whose professional life started as a real estate agent, aren't sure what they'll do if they leave the business.

"It's not as if we're not working hard," he said. "But you can't make people buy houses, which is unfortunate. I'd be a very rich man if I sold everything there is to sell in Metro Detroit."