Real estate agents feeling housing market pinch - East Valley Tribune: Business

Real estate agents feeling housing market pinch

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Posted: Sunday, September 23, 2007 2:16 pm | Updated: 6:27 pm, Fri Oct 7, 2011.

Caught in the midst of the housing market turmoil, real estate agent Tina Eacret held out as long as she could — using up her entire savings before deciding to go part time in December.

Eacret had lost roughly half of her database of 500 contacts to the new agents who flooded the Valley market in recent years, trying to capitalize on the boom. Even her most loyal clients opted to use friends and relatives who had gotten their licenses or obtained a license themselves.

“I almost felt like I had failed, but I had to realize that it wasn’t just me,” Eacret said. “Everybody’s going through it right now.”

Across the Valley, real estate agents, loan officers, investors and others tied to the housing industry are struggling to ride out the slump by digging into niches, such as foreclosures or property management. Others are going part time or leaving the industry altogether.

'A temporary condition’

Many of the real estate agents who jumped in during the housing frenzy are now out of a job, said Patti Crawford, director of Intero Real Estate’s foreclosure division in Mesa. Some didn’t hold on to the money they made at the height of the market, Crawford said.

“I’m seeing a lot of real estate agents with their houses in foreclosure,” she said.

But despite the exodus of some agents, hundreds of newcomers have streamed into the industry in recent months.

The Arizona Department of Real Estate has seen a drop in the number of people taking the real estate license test, spokeswoman Mary Utley said.

The agency, however, is still getting 500 to 600 would-be licensees taking the test each month and is expecting to hit 100,000 licenses, including brokers, agents and entities, by the end of 2007, Utley said.

People still see real estate as a lucrative field, she said.

Officials at the Arizona Association of Realtors have also been surprised by the number of new and remaining agents.

The association budgeted for a 10 percent decrease in membership this year, but it didn’t happen, organization president Frank Dickens said. The young people coming in seem to have an entrepreneurial spirit and want a challenge, Dickens said. And the experienced agents have seen cycles like this before, he said.

“We all know that this is just a temporary condition,” he said.


It’s also a tough time for loan officers, said Chris Mozilo, president of the Arizona Mortgage Lenders Association.

Hundreds of Valley loan officers have been laid off in recent months as mortgage companies closed their doors.

“Whether out of work or doing less business, economically they’re having a hard time,” Mozilo said.

Last month in Arizona, the financial activities employment sector cut 1,900 jobs, a result of the mortgage crisis.

Nationwide, tens of thousands of mortgage industry workers have lost their jobs this year, as more than 100 companies shut their doors.

The week after Tucson-based First Magnus Financial Corp. filed for bankruptcy, AmeriFirst Financial in Mesa received more than 300 job applications, loan officer Jeff Underwood said.

Tighter lending standards have lenders diversifying into other mortgage products, such as Veterans Affairs, loans and reverse mortgages, Mozilo said.

Many are also scrambling to become licensed to offer Federal Housing Administration loans, which don’t have specific credit score requirements, Underwood said.

The decline is forcing loan officers to not just sit back but work hard, said Elaine Paddy, a loan officer at Alliance Home Mortgage in Mesa.

“It’s actually a game you have to play, and you have to play hard,” Paddy said.

The job now involves counseling potential buyers on how to improve their credit to qualify for loans, she said. A lot of real estate agents are also expressing interest in the mortgage business because when home sales are slow, refinances are still happening, she said.

'Cautiously optimistic’

Some agents are taking classes to learn about foreclosures and short sales — two areas of the industry that are rapidly growing as more borrowers default on their mortgage payments. A short sale occurs when a homeowner sells his property for less than he owes the lender.

Some 30 to 35 people, many of them agents, showed up to a recent short sales class, and there was a waiting list, said local investor Scott Teerink, who teaches for the Arizona Real Estate Investors Association.

In April, that class had maybe six people, he said.

More than 100 people also recently attended a beginners investing class, he said.

“(Investors) are cautiously optimistic,” Teerink said. “They are definitely in the market, just not to the degree that they were.”

Teerink said he believes the market is close to the bottom and is encouraging investors to buy when prices are low.

“That’s a perfect time to get into it, as long as you’re not expecting to get in and sell immediately,” he said.

Others in the industry are also remaining positive.

The market isn’t what it was two years ago, but it’s not in the tank, Realtors association spokesman Ron LaMee said. Prices are holding firm and the Valley’s underlying economic factors are sound, LaMee said.

Riding it out

Meanwhile, agents and loan officers continue to weather the storm any way they can.

For Eacret, who had been working in the real estate business since 1991, getting another job was a big adjustment.

She had spent countless hours and thousands of dollars — at least $3,000 a month in marketing alone — to foster her real estate career. She advertised on her minivan, sent out monthly postcards, hosted neighborhood parties and attended educational seminars.

Now, she sends out mailers once a quarter to remind clients she’s still in the business.

“It does make me sad sometimes,” Eacret said.

But her situation isn’t as bleak as it may seem.

She is now working as executive assistant to the CEO of the Arizona Humane Society — a position she describes as her “dream job.”

It doesn’t even feel like work, said Eacret, who has long had a passion for animals and volunteered at organizations.

As for real estate, she said she can always fall back on it but hasn’t decided whether to return full time.

“I don’t know if I’ll ever go back,” she said. “I love what I do at the Humane Society. I feel like I found my calling.”

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