By Danny Kucharsky

Calgary entered the new year with more real estate sales reps than last year, despite its weakening housing market. It may take awhile for the agent count to drop in the city, despite the precipitous drop in the price of oil and significant job losses in the Alberta oil patch, brokers say.

The Calgary Real Estate Board (CREB) entered 2016 with 5,264 members, about 1.5 per cent higher than its 5,189 member count at the beginning of 2015.



Phil Soper
Phil Soper, President and CEO of Royal LePage

“It would take an extended period of time – three or more years of a depressed real estate market – before we see a significant number of real estate professionals leave the industry,” says Phil Soper, president and CEO of Royal LePage.

Leaving the industry for something else would require retraining. “It’s not as simple as, ‘Oh, I’m going to go be an accountant now or I’m going to be a paramedic or something,’” Soper says. “They’re real estate professionals. That’s what they do for a living.”

CREB president Cliff Stevenson says some people are joining the real estate profession from other industries that are slumping. In a declining economy, “we tend to be an industry that people who’ve lost their jobs look at more seriously as a career option for them.”

Stevenson says the Real Estate Council of Alberta has seen an increase in registration for its real estate agents program. “Their assessment was that the downturn provides a forced transition for a lot of people on the labour market and we’re an attractive option for people who’ve lost their jobs.”

Re/Max offices in Calgary have also seen about an increase of agents of about five per cent, from around 850 to 900. “We’re pleasantly surprised at what we’ve seen,” says Roy Anderson, executive director of Re/Max of Western Canada. “We expected either zero growth or negative growth.”

Roy Anderson, Executive Director of Re/Max of Western Canada
Roy Anderson, Executive Director of Re/Max of Western Canada

Anderson attributes most of the growth to experienced agents being recruited from other brokerages.

However, the situation is not as bright in Fort McMurray, which is much more reliant on the oil and gas industry than the more diversified Calgary market.

Re/Max saw about a 20 per cent drop in agents in Fort McMurray, with its agent count dropping by about 18 last year. “We’re not necessarily losing agents overall because a number of those agents have relocated,” Anderson says. The salespeople typically have family members in the oil and gas industry who have lost their jobs and moved elsewhere for employment.

“When times get tough it’s an industry where we see some attrition, but typically it’s also a time when the really good agents and brokers can really shine,” Anderson says. “We certainly don’t shy away from that kind of market.”

Royal LePage also saw a drop in agents in Fort McMurray last year (representing less than five per cent of its practice) with three or four people transferring to Edmonton, Soper says.

CREB President Cliff Stevenson
CREB President Cliff Stevenson

Stevenson says there is no fear among agents in the Calgary market and that some of the more experienced agents have seen similar cycles before.

“Everyone’s probably trimming the fat and being very careful with expenses,” he says. A pullback is probably happening with marketing as well, despite the school of thought that sales reps should be spending more in a down market. Agents are also paying very close attention to their current sales volumes and market shares.

“I would suggest that every agent has taken a very good look at their bottom line and has been forced to make some smarter, more intelligent business decisions to keep operations afloat,” Stevenson says. But “there hasn’t been a shift on how we do things on a day-to-day basis. It’s just being more nimble and smarter with the money.”

Unlike last year, Soper does not expect to see closures or mergers of Royal LePage brokerages in Calgary in 2016. Late last year, the six-office Royal LePage Foothills brokerage in Calgary closed, with agents transferred to Royal LePage Benchmark or Royal LePage Solutions.

Soper says the closure was not directly related to the dip in oil prices. “In other words, it could happen anywhere.”

As in previous economic slowdowns, he expects the market share of the leading brokerages will increase in cities like Calgary and Fort McMurray that have seen a weakening housing market.

That’s because there will be “a flight to quality” as consumers realize it’s going to take longer to sell their home and that they will need all the tools that are available on the marketplace, he says.

In addition, in down markets, Soper says, agents tend to migrate to the leading brands “even though it’s more expensive to be an agent at a Royal LePage rather than ABC Realty. What the Realtors find is they need the stronger brand and the stronger tools at the kitchen table when they’re talking to consumers.”

In a similar vein, Soper expects a significant number of new agents will leave the field after a year if it doesn’t work out for them, but that most existing agents will stay on.

He also expects the market share of for sale by owner properties to decline in the two Alberta cities. “The reason is quite simple – it’s hard to sell your home at any time but it’s really hard in a down market.”

Re/Max’s Anderson says strong agents in Calgary and Fort McMurray who have a good business and marketing plan and have clients who understand what’s happening in the market “can do as much business in a more down market than they can in a strong market.”

4 COMMENTS

  1. Kudos to Jerry Charlton on his frank and forthright submission herein — I assume however, that he wouldn’t have the correct disposition to replace Phil Soper at Royal LePage, perhaps.

    I must say that I had a great deal of difficulty reasoning all of Phil Soper’s attributed quotes as somewhat contained herein, in particular:

    Unlike last year, Soper does not expect to see closures or mergers of Royal LePage brokerages in Calgary in 2016. Late last year, the six-office Royal LePage Foothills brokerage in Calgary closed, with agents transferred to Royal LePage Benchmark or Royal LePage Solutions.

    Soper says the closure was not directly related to the dip in oil prices. “In other words, it could happen anywhere.”

    As in previous economic slowdowns, he expects the market share of the leading brokerages will increase in cities like Calgary and Fort McMurray that have seen a weakening housing market.

    That’s because there will be “a flight to quality” as consumers realize it’s going to take longer to sell their home and that they will need all the tools that are available on the marketplace, he says.

    In addition, in down markets, Soper says, agents tend to migrate to the leading brands “even though it’s more expensive to be an agent at a Royal LePage rather than ABC Realty. What the Realtors find is they need the stronger brand and the stronger tools at the kitchen table when they’re talking to consumers.”

    My questions for Phil Soper would be: why as President and CEO of Royal LePage would you muddy your own brand and suggest to consumers that six Royal LePage offices could close anywhere regardless of economic conditions; why would you suggest that there would be a “flight to quality” and that agents tend to migrate to leading brands in down markets, and yet neither of the two aforesaid factors seemed to sufficiently benefit Royal LePage Foothills, apparently; what are those “stronger tools at the kitchen table”?

    Seriously, what are consumers to conclude Phil Soper’s own impression is, as President and CEO of Royal LePage, of the Royal LePage brand?

  2. That’s the beauty of being brokers and not the owners of the property we sell. If we sell a property for a seller who is prosperous and moving up, or we sell a property because the seller is in financial straits, it makes very little difference to the broker/agent. Yes, we have empathy for the parties we work with, but that is true in buoyant markets too when we deal with divorces, deaths in the family, etc. Our job is to get ’em sold regardless of the incentive of the sellers.

  3. Do the math 1,349 transactions have closed year to date in Calgary – if each transaction had two Realtors involved that’s 2,698 sides for 5,264 Calgary Realtors….. Approx 1/2 deal each in 2016
    That would not be enough to pay all the Broker Office Fees, CREB Fees, Insurance, Marketing, Vehicle, other expenses and feed a family.

    The only people that want more Realtors are the Brokers and the Calgary Real Estate Board that get paid if a Realtor does no deals….. They actually prefer Realtors that do just enough business to get by because that leaves room for another sucker to come in and pay the compulsory fees.

    Brokers and the Calgary Real Estate Board are more interested in Recruiting…… They choose Quantity over Quality…..

    I don’t blame them one bit – it’s the way Organized Real Estate is set up.

    Quantity of Realtors over Quality of Realtors is bad for consumers though.

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