Why this matters: The ebb and flow of real estate licensing reflects changes in the California economy and the public’s perception of opportunities in real estate. From within the industry, successful licensees understand they need to adopt changes into their practice to provide effective services and fees, at each stage in a business cycle.
Fewer licensees and adjusting to the trend down
The number of Californians obtaining their real estate licenses is, as fully expected, trailing off from its pandemic-driven superficial high of 2021.
In the last quarter (Q4) of 2025, over 3,600 new real estate agents and 600 new brokers received licenses from the California Department of Real Estate (DRE). Compared to same quarter one year earlier, newly-licensed agents declined 6% and newly-licensed individual brokers declined 23%.
Critical to the brokerage industry, the DRE in 2025 issued 26.5% fewer broker licenses to prior sales agents who upgraded to broker than in 2024. In 2025, only 1 in 5 individuals newly issued a broker license were already a licensed sales agent. Other individuals issued broker licenses comprised of attorneys and experienced individuals from other real-estate-related services who do not need to first practice as a licensed salesperson to obtain a broker license.
For December 2025, a total of 93,000 individual brokers and 296,800 agents held licenses issued by the DRE. Compared to one year earlier, the total number of:
- individual brokers fell by 3,200 – a 3.3% drop; and
- individual agents slipped 11,650 – a 3.8% drop.
The trend indicates an annual loss in the licensee population will continue during the next 2 years, further reducing the licensee population.
Today’s licensees face an industry-wide falloff in the consumer need for transactional services. The volume of all sorts of fee-generating real estate transactions — sales, leasing and mortgage originations — continues its steady year-over decline after peaking in mid-2022.
To remain productive and earn fees in a real estate recession, agents shift the focus of their services to adjust to the tightening financial dynamics in the real estate market. Today, the market shift since mid-2022 is from the one most beneficial for sellers — a recovery now gone — to a market most beneficial for buyers, a recession now emergent. Ripples from the pandemic economy and the chaotic national governance have altered the nature of demand for property in the real estate market, creating uncertainty over what services are most needed going forward.
Also, to remain competitive, agents in any market phase need a professional upgrade to broker to attract better quality clients. An upgrade to a broker license is especially valuable as the market pivots fully into the current real estate recession. Even national think tank, the Conference Board, which officially declares recessions, says the moment is coming soon.
The pace of active agents upgrading their licensing status as brokers ought to logically pick up the pace as we move deeper into the recession, but it likely won’t. Agents tend to believe in bonding with clients, not education and licensing. Thus, upgrading one’s license remained low throughout the past decade’s business cycle with no indication of an upturn.
Updated February 13, 2026.
Chart update 2/13/26
| Q4 2025 | Q4 2024 | Q4 2023 | |
| Agent Licenses Issued | 3,600 | 3,800 | 5,800 |
| Broker Licenses Issued | 600 | 770 | 780 |
Aggressive adjustments in the broker and sales agent population
New brokers come from the ranks of current sales agents but primarily from other real-estate-related professions. Comparing the number of newly-licensed Department of Real Estate (DRE) brokers to the number of newly-licensed DRE sales agents, you’ll find that for every six new agents there is approximately one new broker.
Importantly, newly-licensed sales agents generally want to go on to become brokers, which varies depending on when during the real estate cycle they become licensed. Agent licensees are most likely to become brokers within four years after first getting their sales agent license. Those who are not active sales agents can still qualify to become brokers by virtue of education or profession.
Read more about the DRE’s requirements to apply for a broker license here: Requirements to Apply for a Real Estate Broker License. Find out how licensing courses work here: DRE approved Broker Licensing Courses.
The current ratio in the population of total sales agents to the total individual brokers is 3:1. While normalizing, it is a remnant of the abnormally high number of sales agents who flooded the profession in the 2000’s Millennium Boom and 2021 pandemic period. These boomtime growths, for both broker and agent licensees, are now returning to a more stable level.
In the present absence of past market distortions which caused property pricing booms, the real estate profession is moving towards a more natural balance between the quantity of brokers and their sales agents.
Expect the issuance of new broker and sales agent licenses to remain low until the property inventory for sale or lease peaks and sales volume increases, likely around 2028.
Forecasting a drop in licensing
How many prospective agents are likely to arrive as new licensees in the second half of the 2020 decade? The answer to this question is in the monthly data for the recent influx of new sales agents. Between late 2007 and mid-2012 recessionary period, the monthly number of new sales agents remained steady with a slight general decline, from 1,100 to about 1,000 monthly.
Then, licensing spiked in the first half of 2013, due primarily to excitement caused by the immediately preceding speculator frenzy, which ended a five-year period of doldrums.
With this history showing the duration of a recession’s impact on real estate transactions, anticipate a slowing annual trend for DRE issuance of new agent licenses of around:
- 14,000 for 2026;
- 12,000 for 2027; and
- 11,000 for 2028.
These projections and forecasts for new agent licensees follow a 24% drop in DRE issuance in 2025 from the previous year. The decline facing 2026 and beyond are forecast to continue, leaving a greatly reduced sales agent population when sales pick up after 2028.
Licensee Population Movement
For those already licensed, renewal rates are also expected to drop. However, the rates are very different for brokers and sales agents.
Broker renewal rates for expiring licensees vary little from year to year based on DRE data for fiscal years ending each June:
- 2024 broker renewal rate was 90%;
- 2025 broker renewal rate was 91%;
- 2026 broker renewal rate of around 90%; and
- 2027 broker renewal rate of around 88%.
For agents, their renewal rate for each DRE fiscal year:
- 2024 was 75%;
- 2025 remained the same at 75%;
- 2026 sales agent renewal rate of around 70%; and
- 2027 sales agent renewal rate of around 66%.
When transactions in sales, leasing and mortgage originations decline, the background of new agents entering the business will likely be family members who own investment property or are DRE licensed with experience handling transactions. These new agents already have longevity and name recognition in the community. As new licensees, they enter for far better reasons and a much better likelihood of success than individuals who merely, to be charitable, hope to get rich quick during boomtime euphoria.
firsttuesday forecasts licensing volume — that is, the total number of real estate licensees holding either a DRE-issued sales agent or broker license — will decline further in 2026 and continue until a gradual rise in licensing begins after 2028.
Related articles:
The incoming batch of agents is more dedicated and thus more likely to plan ahead for long-term market rises and falls.
Their actions will cause fewer future entrants to drop out after their first four years. This attrition of human resources is a problem the real estate industry has never managed to control. Individuals from families with investment property or brokerage backgrounds who enter for these reasons, will experience a greater likelihood of success. Others will mostly hope to reap the benefits fast despite a lack of significant prior family or personal experience in real estate.
The number of sales agents who upgraded to broker status has slipped since 2022 to:
- 835 for 2023;
- 810 for 2024; and
- 595 for 2025.
2026 is on trend to be even lower.
Economic recoveries
Suddenly within the span of four months at the beginning of 2020, 2.8 million California jobs were lost. These jobs quickly returned due to massive levels of all types of government stimulus. Now, job levels in December 2025 are only 450,300 jobs above pre-pandemic levels, a dismal 2.5% total increase in six years.
Employment growth tapered off in California and became flat during 2025. As a result, the demand for housing among “employed homebuyers” has become static due to uncertainty about job opportunities, housing and the like in the near future. Meanwhile, buyer demand continued to decline as prospective buyers wait on the sidelines for prices or mortgage rates to fall.
Related articles:
Home sales volume will pick up in earnest when:
- inventory of property for sale returns to a 9-to-12-month supply based on monthly closings;
- then for a period of around 18 months real estate sales volume and prices stabilize and begin to rise; and
- residential construction increases.
Thus, no urgency presently exists for expanded real estate licensing and renewals by brokers who employ agents until a pick-up in buyer demand for housing is reflected by annual increases in construction starts.
The drama of the beginning of a recovery or recession is quickly observed by real estate professionals. After all, an increase or decrease in the licensee population only reflects what is by that point already obvious in the marketplace, by either an increase or decrease in:
- sales volume for all types of property;
- sales prices movement roughly nine to 12 months later; and
- property prices adjusting at a pace other than the rate of consumer inflation.
Once the number of annual home sales begins to rise at a steady and sustainable rate — an 18-month period — sales agent licensing volume, like home pricing, responds by rising.
Trackbacks/Pingbacks