Red-hot housing market leaves REALTORS® burned-out
66% of Kentucky REALTORS® say current market conditions are causing burnout among REALTORS® according to the June 2021 edition of the HousingIQ Survey of Kentucky REALTORS®.
Real estate agents often feel that they must be “always-on” – meeting clients, following up, prospecting, marketing, networking, and dealing with paperwork. With record-low inventory and homes selling within days, the pandemic-driven boom has multiplied agent workload and intensified the competition for transactions.
Hot market attracts new agents
The booming market, low barriers to entry, entrepreneurial lifestyle, and allure of a six-figure income has also attracted new agents.
“Kentucky REALTORS® membership has grown by over 900 new members this year which is nearly the same as the combined growth in membership over the last three years,” said Paul Del Rio, Communications Director of Kentucky REALTORS®.
iBuyers decrease agent involvement
iBuyers are the new kids on the block and promise quick, hassle-free sales – for cash. Homeowners can also buy directly from an iBuyer oftentimes with a buyback guarantee. By automating parts of the process, iBuyers decrease agent involvement in the transaction. And even when an agent is involved, iBuyers tend to offer a lower fee to the agent. In the April 2021 survey, 38% of the respondents anticipated an increase in iBuyer transactions.
“The convenience that iBuyers offer is not without cost,” said Charles Hinckley, President of Kentucky REALTORS®. “Computer code cannot replace the local market expertise that a REALTOR® offers when it comes to pricing, marketing, and negotiating within a challenging housing market such as this one.”
“Office exclusive” listings restrict supply
With an “office exclusive” listing, a seller allows marketing a property within the listing brokerage without entering it into an MLS or publicly marketing the property. Office exclusive listings offer sellers privacy, customized terms, and quick turnaround. In the May 2021 survey, nearly one-half of the respondents anticipated an increase in the use of office exclusive listings. In a market that is already burdened by low inventory, this further restricts supply and denies agents potential opportunity.
An influx of new agents, record low inventory, iBuyer automation, and office exclusive listings mean more agents chasing fewer transactions. In the June 2021 survey, less than half theREALTORS® expected an increase in their sales volume over the next twelve months.
The new normal
Currently, there are fewer than twenty-five thousand homes for sale in Kentucky. Although inventory will likely increase in the coming months, the market will continue to be competitive for the over twelve thousand REALTORS® in Kentucky. Long hours, the need for quick turnaround, and resourcefulness will become the norm.
“I would encourage busy, more experienced agents to find a less experienced, but capable agent to help carry the load for them while gaining valuable experience and earning a little extra money for themselves,” suggested Lamont Breland, Principal Broker at Breland Group Realtors in Louisville, KY. “Also, carefully outline the reality of the market and discuss your and your client’s expectations for the journey ahead.”
For some helpful ideas on managing burnout, see Dealing with Realtor Burnout.