With continued weakening of new and resale homes and fewer sub-prime loans available from lenders, slow real estate sales are taking their toll on real estate agencies — and St. Augustine is no exception.
There has been some consolidation in the local market; some real estate franchises have been sold to out-of-town investors and some independent and franchise agencies have been closed altogether.
A local real estate agent (salesman) must be affiliated with a broker who customarily retains a percentage (up to 50%) of the commissions earned from the listing and sale of property. The broker provides an office, advertising, telephones and support to their agents — even though some brokers ask their sales team to contribute to those operating expenses.
With fewer resalesâ€™ of local homes and developers selling their own new projects, the commission revenues for sales agents has been dwindling which means that the broker’s commissions have been dwindling as well. Now it is not uncommon to find real estate agents taking part-time “paying” jobs or even changing careers in order to be able to support themselves and their families.
Recent forecasts have the real estate market set to remain sluggish for the next 18 months and that is more than many smaller agencies can afford. Some agencies have diversified and are offering new or additional services to pay the rent, but until the market turns around, we can look for more and more of them to disappear.
Photo credit: Historic City Media photographer Kerry McGuire