Texas real estate brokerages saw a rapid expansion in their headcount just as hundreds of millions of dollars in federal aid flowed into the sector through the Paycheck Protection Program (PPP).
Companies that were categorized as “offices of real estate agents and brokers” were some of the biggest beneficiaries of the PPP initiative in Texas, according to an analysis by The Real Deal of data from the U.S. Small Business Administration and the Federal Reserve Bank of St. Louis.
Texas real estate firms got a total of 20,336 loans, the fourth-highest number of payments among all sectors in the state. The state’s brokerage industry as a whole received $457.6 million in public funds — with an average loan amount of $22,503 — which purportedly secured nearly 41,000 jobs, according to SBA figures, at a cost of about $11,000 each.
The cash infusion coincided with a significant rise in employment in the sector. By July of this year, the number of Texans working in the “real estate and rental and leasing” sector — a sort of catch-all category that covers professionals engaged in the business of selling, renting and appraising real estate — grew to 263,600 workers, according to the St. Louis Fed. That’s a 24 percent increase from the number in April of 2020 when the government first started doling out PPP money, and the highest headcount since the Fed started tracking the metric in January 1990.
In April of 2020, the number of agents in the state dropped by more than 8.5 percent, shedding 19,800 workers to drop from 232,100 to 212,300. But since then, agent headcount has been on a consistent rise, reaching its apex with the latest figures from July.
This increase was more pronounced when it came to payroll employment in the mostly commission-based industry. In April of 2020, firms categorized as real estate and rental and leasing companies shed a total of about 19,000 payroll employees, according to St. Louis Fed data. The sector has since surpassed pre-pandemic numbers, with the latest figures, from July, showing a net gain of just about 2,100 jobs.
The PPP loans were likely just one of the factors that pushed Texas’ real estate headcount to record levels. As the pandemic wore on, the brokerage industry became an attractive landing spot for burned-out or laid-off workers from other sectors enticed by the state’s housing boom. According to a recent report from Texas A&M, the median price for a home in the state was at $349,000 in June.
United Core Management, a property management firm based in San Antonio, received the biggest PPP loan of any real estate firm in the state at $6.5 million. Meanwhile, Dayrise Residential, based out of Houston, placed second with a loan amount of $5.5 million. Other firms that got million-dollar loans through the program include Centurion American Custom Homes, The Woodmont Company and Mohr Partners.
The majority of loans in the top ten have already been repaid in full or forgiven — meaning that the firms fulfilled their requirements to maintain their headcount for 24 weeks from when the loan was issued.
The same is true across the country. According to a SBA report that came out this month, 91 percent of the 10.4 million PPP loans handed out by the federal government have been forgiven.