In September 2011, 1,035 new real estate agents and 505 brokers received licenses from the California Department of Real Estate (DRE). Today, a total of 144,588 brokers and 295,060 agents hold licenses issued by the California DRE. Since January of 2008, 1,000 to 1,300 new real estate sales agents have been licensed each month. [For historic data on the number of licenses issued quarterly, see the first tuesday Market Chart, Newly licensed sales and broker population.]
Not all of these licensees actively use their licenses as agents in real estate transactions. At the time of this writing, there are 107,284 active brokers and 190,833 active agents. Thus, roughly 64% of DRE licensed agents are employed by a broker. Inactive agents are not able to represent others in real estate transactions. [For the total active brokers and agents in California, see the first tuesday Market Chart, The rise and fall of real estate brokers and agents.]
In September 2011, 59% of agents and 73% of brokers elected to renew their licenses, in keeping with renewal rates since 2007. The remainder chose not to take the mandatory education and pay the required fees to keep their licenses valid.
first tuesday take: The current average rate of approximately 1,100 newly licensed agents each month will remain appropriate for the real estate market until this Lesser Depression ends and a full economic recovery takes hold — probably in 2017 for the real estate industry. This rate is far more restrained than was seen during the boom years, when approximately 5,000 new agents arrived on the scene each month over a three-year period ending in September 2007. The drop in new agent licensing numbers is caused by the same factors that have led to the overall drop in the licensee population, from 265,201 active real estate agents in 2007 to 190,314 at present: the housing market is simply not dynamic enough at present to support the former high numbers of active real estate sales agent licensees.
Indeed, to maintain the current level of newly-licensed real estate agents, the agent licensing exam passage rate has risen dramatically. In September, 1,555 people took the salesperson licensing exam to become real estate agents, and 62% passed that test. In contrast, the passage rate from 2004-2007 varied from 45-50%, as unprepared applicants took the test hoping to make quick money in an exploding market, a product of the Millennium Boom’s hit-and-run mentality.
As the real estate recovery progresses in upcoming years, the DRE needs to consider increasing the difficulty of the licensing exam to reduce the exam’s passage rate and prevent an oversupply of agents. Had such measures been taken in the years from 2004-2006, the distortions caused by the extravagant number of new entrants and the resulting current high rate of attrition among licensees would have been averted. Of course, this would have displeased the large multiple listing service (MLS) brokers, who flooded the streets with easily replaceable agents, but it would have fulfilled the DRE’s mandate to protect the homebuying public from distortional activity in the real estate market. [For the number of agents employed at California’s top brokers, see the first tuesday Market Chart, The 29 top brokers in CA by number employed.]
Hard to become a brekor not really.Hard to succeed depends on you.Make no mistake, this is hard work. Networking, selling, cold calling, canvasing, etc., be prepared to work and not necessarily make any money for the first few months. I didn’t get a check for the first 8 months I was in the business. If you work hard and have a good mentor, you can avoid a lot of mistakes and save some time. Find a firm that is willing to invest some time to train you and make sure you are part of a selling team. It will make things a lot easier. The income can be enormous I know more than a handful of guys in my market (Long Island) who make well over a million dollars per year. Lots of brekors here make between $ 100,000 $ 300,000. But remember, it’s all commission (you eat what you kill) Good luck!Ralph Benzakeinwhitman-realty.com
I have been an agent for over 30 years and I believe that just making the licensing exam more difficult is not the answer. As a real estate agent you are dealing with one of the largest investments an average american family will ever make. I have always felt that more education requirements should be required such as a minimum of a two year Associate of Arts degree in Real Estate. You would then have time to actually teach a person how to become a real estate professional. Classes in finance, practical applications such as writing an offer, dealing with counters, understanding the different types of real estate transactions (the selling of land, residential, commercial, income property, businesses, etc.) field trips to actually look at properties and being taught what to look for, understanding escrows, how to research, etc. etc. etc. Taking an online course, passing a test and then following up with two college level courses does not make you a real estate professional. Brokers do not necessarily provide new agents with a mentoring program either. Brokers hiring new agents should be required by law to have an in house training program.
I don’t think your analysis of active and inactive agents means anything regarding the value of having a real estate license. I have been active in real estate transactions since I became licensed in 1986. Working for developers, REO banking and government sales and leasing requires real estate knowledge that is enhanced by the education required to get a license, but does not require that the license is hung with a broker. My license has been “inactive” for years, but I have legally continued to work in the real estate field and have continued to maintain my license in the event I need at some future date (like using it to perform property management services for a fee management company). In other words, not all real estate jobs require an active license, and not all real estate jobs are sales related. However, there is a value to continuing to maintain a real estate license.
Hi All,
Will there ever be “live” Broker licensing courses offered by First Tuesday in near future. See I am not an online learning person and wish to sit in “live” classes.
Thanks.
Do any of these active license numbers include NMLS Mortgage Loan Originators that hold a DRE sales or brokers license?
Thanks for your question, Brad! Yes, the register of active real estate licensees tracked above includes all active brokers and sales agents, including those who have been separately licensed through the National Mortgage Licensing System (NMLS) to act as a Mortgage Loan Originator (MLO). The DRE reports that 12,210 active brokers and 7,319 active agents are currently endorsed by the NMLS. The DRE does not release data, however, as to whether active licensees are actively making use of their MLO endorsements.