UPDATED July 9, 2021, 3 p.m.: More real estate agents entered the New York City market in May than in any month since the pandemic began, according to Corofy, a real estate intelligence platform.
The 912 new residential and commercial agents represented a 7 percent increase from April, when numbers neared pre-pandemic levels for the first time. The monthly average two years ago was 886 agents.
The number of new faces has been rising in all boroughs, said Corofy CEO Eddy Boccara. “It’s looking like we’ll break another record in June,” he said.
Corofy defines new agents as real estate professionals who associated their licenses with a firm based in New York City for the first time. Most have never worked in real estate.
Eddy Boccara (Corofy)
The uptick was likely a result of three factors: New York City dropping Covid restrictions, the appeal of a hot market and swaths of furloughed professionals looking for a career change, Boccara said.
“It is natural to be attracted to an industry like real estate, post-pandemic, where the barrier of entry is not as high but the opportunities are really big,” Boccara said. Licensing requirements vary by state but class time can be as little as 30 hours, with exam and license fees costing a couple hundred bucks. In New York, it’s 75 hours of course work and about $500.
May also saw 770 agents let their licenses expire, so the net increase in agents was 142. The number of agents typically increases when housing prices do.
In April, nearly half of the 854 new agents joined Manhattan firms. Brooklyn brokerages landed 22 percent, Queens 19 percent and Bronx or Staten Island firms 10 percent between them.
From January through April, 10 firms accounted for about 20 percent of new agents. Corcoran Group, Compass, Douglas Elliman, E Realty International and Keller Williams NYC accounted for 12.3 percent, with Corcoran leading the pack.
Over that period, about 3.1 percent of agents who entered the industry joined Corcoran, double the firm’s share of new agents in all of 2019.
The brokerage cited training, resources and culture as key factors in its efforts to attract and develop newbies.
“We provide a full suite of virtual and in-person sessions that cover new technology, provide tips on how to effectively use social media, review current market conditions, share strategies to help win new listings and more,” said Amanda Caggiano, director of agent experience at Corcoran. Other big firms make similar pitches.
Compass was second with 2.8 percent of new agents, up from 1.9 percent in 2019.
“It seems like Compass is competing to attract new talent despite its previous strategy to just compete for the top agents,” Boccara said.
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Also last month, 1,926 agents transferred their licenses to different brokerages, according to data from the Department of State. Corcoran saw 12 agents leave the brokerage in May, while Compass lost six.
There are some benefits to having new agents enter the playing field — employment opportunities, for starters — but success isn’t guaranteed and could have negative consequences, especially during a housing crisis, some economists suggest.
The agent influx comes at a time when there are more agents than there are homes for sale. With few listings, new agents may spend the bulk of their time looking for clients rather than gaining experience, said economist Sonia Gilbukh, who co-authored a paper about new agents in the housing market.
New agents are more likely to misprice a home, struggle to find buyers and fail to present a home in a compelling way, she added.
“The longer your house does not sell, the more likely the house prices drop even further, the more likely you’re falling behind on your mortgage payments, and potentially going into foreclosure,” said Gilbukh, who did an analysis linking oversupply of real estate agents with those outcomes.
And the pay usually isn’t something to write home about: Most new agents only complete one or two transactions in a year, Gilbukh said, and some don’t make any.
But success is less about the market and more about individual agents, said Caggiano, adding that Corcoran emphasizes quality over quantity. She cited mentorship from senior managing directors to help new agents learn the ropes.
This story has been updated to reflect that Corofy is an intelligence platform rather than a firm that tracks agent movement. The story was also updated with the number of agents whose licenses expired in May.