Wow! The number of new real estate licensees in Washoe County has grown more than 10 percent since the beginning of the year. According to the most recent real estate statistics from the Nevada Real Estate Division as of May 2015 there are 2,790 Active licensees in Washoe County. Compare this number to the 2,531 Active licensees reported in January of this year [See the first Table below]
This increase in new real estate agents equates to more than 50 per month. At that rate of growth we’ll be back to 2007 highs in about nine months. The highest number of Active licensees I see in the Table below since I’ve been tracking this number is 3,229 reported in August 2007. It’s likely we’ll surpass that number. Which begs the question can our local housing market sustain that many real estate agents?
The answer to that question requires some in-depth analysis of many factors (units sold, median price, sales volume, sales commission, etc.), and is a good subject for another blog post. In the meantime, a quick back-of-the-napkin calculation shows that in terms of units sold per agent, expect that number to decrease.
Since turning the corner in 2012 the Reno-Sparks market has been averaging ~6,900 residential sales1 annually over recent years; and thus far this year appears to be tracking the same:
- 2012: 6,976 units sold
- 2013: 6,891 units sold
- 2014: 6,794 units sold
- 2015: 3,203 units sold (to date 6/23/2015)
Using 6,900 annual sales, equates to 13,800 transaction sides annually. [Each sale typically has two agents involved; one on the buyer side and one on the seller side.] With 2,790 current Active licensees that comes out to 4.9 transactions per agent this year. Compare that to last year when the roughly 2,450 licensees averaged 5.5 transactions per year. What will happen next year if the increase in the number of agents continues at it’s current pace? Without a corresponding increase in the number of sales, the projected 3,200+ licensees will average only 4.3 transactions per agent.
Now, of course, not all new licensees will have the same number of sales. The Pareto principal [a.k.a. “80-20 rule”] definitely applies to real estate sales. Skill set and success aside, many new licensees simply choose not to be full-time real estate agents. Some will be part-time and some will hold a license only for a referrals basis.
Again, without performing a more detailed analysis, it’s safe to say the local real estate agent arena is going to get a little more competitive. Welcome to the exciting world of real estate sales, new agents!
1The unit sales data reported covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties and Condo/Townhouse only. Data excludes Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – June 2015. Note: This information is deemed reliable, but not guaranteed.
Historical licensee numbers can be found in the Tables below for both Washoe County as well as the entire state.
Source: Nevada Real Estate Division