Real estate boom: Long hours, stiff competition

Wednesday, June 29th, 2005

Being a realtor isn’t easy money, as many people assume — but it is still possible to do very well

Michael Kane

CREDIT: Mark van Manen, Vancouver Sun Shirley Clarke has been North Vancouver’s top-selling realtor for the past five years.

Shirley Clarke is a former stay-at-home mom who started selling houses in 1997 when the B.C. real estate industry was experiencing one of its periodic downturns.

While many of her contemporaries have left the business, unable to make a steady living, she has, one listing at a time, become North Vancouver‘s top-selling realtor for the past five years.

In each of the past two years, Clarke has sold 150 homes. At a typical commission of $20,000, that’s a potential $3 million in gross annual income, less expenses and shared commissions.

Clarke is not the only B.C. realtor raking in the cash from an industry that traditionally operates under the 90-10 rule, which says that 90 per cent of all sales are made by the top 10 per cent of realtors.

Residential sales topped $27.8 billion in B.C last year. That’s more than double the $11.9 billion recorded five years ago when fewer than 14,000 agents were registered to sell real estate in the province and about 100 were quitting the business every month.

The number of licensees bottomed out at 12,619 in December 2001, according to the Real Estate Council of B.C., and has been climbing ever since. At last count there were 15,639 eager to buy or sell your home.

The chances are many of them will have fallen by the wayside five years from now, despite a housing market that is fundamentally sound for the foreseeable future, particularly in Greater Vancouver which accounted for $13.8 billion, or half of total residential sales last year, and where 7,885 licensees, or half the total, operate.

The average realtor sells a mere 10 houses a year and it is a much tougher business than many people assume, Clarke says.

“I think a lot of people are under the illusion that it is an easy job and it looks like a lot of money because on any given house in North Vancouver you are looking at a $20,000 commission cheque usually, and that sounds like a lot of money.

“So somebody out there making $60,000 a year thinks, ‘Wow, three houses and I am done.’ It sounds pretty good, doesn’t it, until you look at the actual dollars and cents of it and the hours.”

Clarke’s expenses swallow 50 per cent of her income and she works 80 to 90 hours a week. She maintains her own office in sought-after Edgemont Village and employs a staff that includes husband John, a former commercial realtor, and 27-year-old daughter Laura, a former teacher.

Clarke sees her office as a year-round advice centre, helping her neighbours with questions about their property assessments and the like, in the hope that her name will be top of mind when they want to buy or sell. Her marketing is reinforced by a top-flight website, copious print advertising and community-wide mailouts of notepads and calendars adorned with the Shirley Clarke logo.

Nowadays, 75 per cent of buyers use the Internet, mostly on weekday evenings, to see what’s new and check out the details. She says traditional weekend open houses are becoming less important as a source of buyers.

Clarke also raises her profile by supporting local charities, and is currently campaigning to raise $10 million toward the cost of a new emergency room at Lions Gate Hospital.

An industry joke says that realtors retire when they become listless but with the average practitioner aged 50-plus, real estate clearly offers openings for young people.

“People with sales experience would be expected to do well but the proof is in the pudding and some will do well and some will not,” said Georges Pahud, president of the Real Estate Board of Greater Vancouver.

“I think people very quickly realize that it is not an easy job. The hours are long and there are a lot of realtors and only so many people wanting to sell or buy. Listings are pretty much the name of the game.”

The market is also settling down, as indicated by slower price growth, says Tsur Somerville, director of the Centre for Urban Economics and Real Estate at the University of B.C.‘s Sauder School of Business.

Real estate is a vital sector of the provincial economy, worth an estimated $30 billion when commercial and industrial sales are added to the mix, and that’s without tallying the value of the booming construction sector.

While it is a mistake to think home prices will go up forever — prices in Vancouver failed to keep pace with the cost of living between 1995 and 2001 and we’re already four years into a typical six-year growth cycle — Somerville says anybody buying today and prepared to stay put for at least five years will, nine times out of 10, recoup their transaction costs and be better off than renting.

Helping to sustain the Lower Mainland market are relatively low interest rates, increased job growth and in-migration coupled with rising wages, as well as the residue of pent-up demand that welled up in the late ’90s, says Cameron Muir, senior market analyst with Canada Mortgage and Housing Corp. in Vancouver.

“I think it is pretty good news going forward,” he said. “We’re in a growth spurt right now and solid economic fundamentals will carry us for a few more years.”

© The Vancouver Sun 2005

Comments are closed.