Real Estate Brokers And Agents: Their Rise and Fall

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Real Estate Brokers And Agents: Their Rise and Fall

Feb 6, 2023 | News | 0 comments

In December 2022, active real estate brokers in California were 90,200. Active brokers continue to decline and haven’t found a bottom since declining from their peak of 109,500 in January 2010.

On the other hand, the number of active agents has steadily grown since a low of 171,100 in 2014. As of December 2022, the number of active agents has increased to 226,300.

When a market is stable, the number of active agents and brokers is naturally in equilibrium. Historically, this ratio has found balance at the level of what is seen in 2002 — for every active broker, there are approximately 1.5 active agents.

Since hitting 2006 high, the active agent per broker ratio has fallen towards historic norms, bottoming out at 1.6 in mid-2014. Going into 2023, the ratio of active agents to active brokers began to increase again, reaching a high of 2.5 active agents per active broker.

An insufficient regulatory environment for lenders creates the risk of harm to public institutions and society, eventually leading to a destructive real estate boom. It is possible that this will occur in the years following 2027, causing agents to multiply rapidly again and standards to deteriorate.

In 2026 and beyond, the demographics of California, combined with the extremely low demand for occupying homes in 2023-2025, will point to a return of the “2021 excitement” in the field of real estate. Even in 2021, the percentage of buyer-occupant homeowners had dropped from 61% in 2006 to 55% in 2022, and it will continue to decline. The number of brokers and agents needed for home sales and purchases is expected to decline over the next few years into 2026. An increase in the demand for property management, leasing, and commercial mortgages will not counteract this slowdown.