As many as 100 Mississippi real estate pros giving up licenses each month
The sustained slump in Mississippi’s real estate market is leading 100 licensed real estate professionals a month to quit the business, state licensing records show.
That loss rate has occurred monthly since the state peaked in the number of licenses at 15,427 on July 1, 2008, said Robert Praytor, executive director for the Mississippi Real Estate Commission.
Today, licensees in the state for agents, brokers and companies total 13,074, he said, and added that of those licenses, 3,799 are inactive.
The net monthly loss, with about 40 new licenses issued each month, is approximately 60, according to Praytor.
The rate “has slowed somewhat” but the losses that started in July 2008 have continued to come “at a pretty good clip.”
He said he expects the number of company licenses has not changed greatly but noted in most instances you don’t need a company license to operate in Mississippi, provided you have a broker license. However, you must have a company license if you incorporate the business, have a limited liability company or operate under any name other than your own.
Praytor, who recently did a 10-year survey of licensing taking in 1998 to 2008, said Mississippi licensed 1,382 companies in 1998 and in 2008 it licensed 1,763. “I imagine we’re going to end up with companies about the same,” he said.
“Most people who are brokers operate their own companies with as few as three people. They don’t ever get a company license.”
Of licensees active in Mississippi today, 2,750 belong to brokers who are residents of the state; 622 of active broker licenses are for out-of-staters.
In his 10-year survey, Praytor found the state had 3,360 brokers in 1998 and 3,372 in 2008.
As renewals for licenses come due, Praytor sees a noticeable percentage of dropouts. “Some drop out in less than year,” he said. Of the 29 people who received licenses in Jan. 2010, seven didn’t renew this year, he said.
Licenses issued in Mississippi make no distinction between residential and commercial real estate professionals, but Prayor noted that 90 percent of the licenses granted in the state go to people in residential sales. And that helps to explain the departures from the sector, he said. “It’s simply because of the housing market.”
The Mississippi Association of Realtors membership of 5,300 represents a drop in members, said CEO Beth Hansen. “We’re continuing to see a slight decline in membership. On the positive side, when you lose members when an industry goes through a decline the people who are still practicing and still there tend to be more involved and more engaged.”
Meanwhile, residential brokers Betsy Alexander of Greenville and Chassity Coleman of Jackson say they are in the business for the long haul, though both note a growing amount of frustration with the pace of the housing recovery and government polices on housing sales.
“We do have a lot of people leaving the business,” said Alexander, an educator turned real estate broker who bought Greenville’s Coldwell Banker Lanier Sykes Bogen Realty three years ago. She said some in her agency have switched to other jobs and engage in real estate in their off time. Then others who are nearing retirement age have retired early, she said.
Alexander said she has approached other real estate professionals in her community to see “if they want to come aboard and share expenses” and be independent contractors.
But “if they’ve had a firm for a long time they certainly don’t want to split their commissions with me. They are just hanging on.”
Even keeping the Greenville Board of Realtors and its Multiple Listing Service up has been difficult, according to Alexander. For members, paying the dues has been a struggle, she added. “Several of the agencies are feeling that crunch.”
Robert Andrew, broker, appraiser and president of the Greenville Board of Realtors, said the organization’s membership of about 60 represents a decline but the drop merely “mirrors what is going in the state as far as the number of licenses.”
It’s not unusual to see such losses in a downturn, he said, and noted that historically “you have one third coming in and one third going out and a third that stays there pretty constantly.”
Alexander said Greenville residential real estate professionals are caught in a cycle perpetuated by the need for banks to get three comparable appraisals before granting a mortgage loan. Without the comparable appraisals the banks can’t sell the mortgage on the secondary market.
In a healthy market, the policy would be no problem. But when sales aren’t occurring, and the ones that do occur have too much time or distance between them to serve as comparables, the Realtor’s sale is jeopardized, she said.
She said she further fears the federal government will be pulling back on its Federal Housing Administration, or FHA, financing. “That’s going to kill us,” she said. “In the Mississippi Delta, FHA loans are the only game in town. Buyers are depending on that low down payment option that FHA offers.”
In downtown Jackson, broker Chassity Coleman celebrated a grand opening this week of The Property Shop, a firm she and two associates have in the Plaza One Building on Congress Street. She said she moved the agency from Byram in hopes of “capturing a significant part of the new business that is being generated in downtown.”
She said she also wanted to be closer to the real estate action occurring in Madison and Rankin counties.
As for business: ‘It’s OK. But it ain’t like it use to be,” she said.
As a broker with a specialty in moving distressed properties, Coleman said she is facing challenges brought on by new guidelines for FHA and Freddie Mac and Fannie Mae. “
For the moment, her goal is to replenish The Property Shop’s listings inventory
She said she sees no cause to buy into predictions of a recovery in a year. She said she thinks it’s two years away. “It’s all going to depend on the Jackson product, not a lot of new development.”
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