Chicago’s herd of real estate agents is shrinking, by thousands of agents, as the housing market pushes through the slowdown.
The number of active agents in the Chicago area in the fourth quarter of last year was down 24 percent from a year earlier, according to AgentStory, a company that tracks real estate agents and their transactions. There were about 7,200 active agents in the fourth quarter, up from 9,600 for the same period in 2021, capping off an epic year for residential real estate across the country.
The report defines an active agent as any agent who has a listing or co-listing, as well as buying agents who are involved in a residential transaction during the quarter.
Most of the defection occurred in the past six months alone, highlighting the rapid impact of the jump in the size of interest rate hikes to 75 basis points that the Federal Reserve began implementing in June after making smaller magnifications above. In the third quarter of last year there were 9,048 active agents, which means the area’s market share dropped by more than 1,800 agents in the fourth quarter from the prior months.
The data only represents agents who closed deals, meaning deals under contract were not counted but were not completed.
The data represents some range throughout each year, as transactions increase during the second and third quarters of each year, when agents are most active and the market is at its annual peak. In the second quarter of both 2021 and 2022 there were more than 10,900 active agents.
It shows the constriction of the real estate market, although it can be a challenge to track the employment figures of the agents. Most residential real estate agents are independent contractors, so they are not subject to layoffs as the market slows.
While agents can remain registered to do business even when inactive, the AgentStory data provides an early sign of the number of potential fallout the real estate market could experience after people rushed into the industry during the boom. of residential businesses driven by the pandemic. pushing the number of registered agents to an all-time high nationwide.
Even in the spring of 2021, which was a bumper year for the residential real estate market, there were more agents than homes for sale, as barriers to entry remain low and it is still difficult to develop a steady stream of business. .
Mike Golden, co-founder and co-CEO of @properties, said in an interview last year that it’s common for agents who joined the profession during the peak of the market to leave when the pace of buying and selling slows.