New Real Estate Licenses Rebound after Major Dip

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It’s been covered in detail how COVID has affected different housing markets, with some markets seeing extremely low inventory and a spike in home prices.

But how has the pandemic affected new real estate agents in Minnesota?

According to data collected from the Minnesota Department of Commerce, the application totals for April through September 2020 reflect the fact that candidates for broker and salesperson licenses must pass a prelicense examination before submitting an application, and test centers were closed from mid-March to late May.

This forced a dip that has since boosted a rebound.

We analyzed official state data on licenses granted to get a better understanding of how the pandemic affected newly issued licenses. 

MN chart

Thankfully, June, July, and August brought a strong recovery. And online schools like Real Estate Express, AceableAgent, Allied Real Estate Schools, and The CE Shop are busier than ever. 

“You may notice that applications in April and May look to be down by about half from 2019. While prospective applicants were not able to take real estate examinations during that period, applications received while test centers were closed reflect that some applicants wait weeks or months after passing the examination before applying for the license,” according to Brian Strub, the Assistant Director of Communications.

“Additional testing capacity became available during the summer, so individuals who would otherwise have applied in the spring may have ended up submitting those applications later in the year,” Strub added.

To put things in perspective, in April of 2019 there were 315 license applications. This April however, there were just 152, a significant drop.

In September it was the opposite. With the number of licensees going up significantly with the ability to actively take the examination. In September of 2020, 553 people applied for their license. That’s more than a 59% increase from the same month in 2019.

 

California, Texas, and Florida see similar trend 

The year started off like most others, with new licenses flat vs. prior years. However, things started to slow down in March as the virus spread, and people began to panic.

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At the beginning of April, the US hit what, at the time, was an all-time high of COVID cases, at 20,000 reported cases. As people were learning what to do, real estate schools shut down temporarily, and states and local municipalities issued stay at home orders at an increasing rate. There was a lot of uncertainty on the “new normal”.

New listings dropped by 44%. And of course, some of the closures affected many State Real Estate Commissions, which slowed down the ability for new agents to get licenses issued.

Because of this, new licenses crawled to a halt in April. Many states and local municipalities issued stay at home orders. In California, new licenses issued dropped by 59%. In Texas, they dropped by a staggering 94%. And in Florida, things came to a near standstill, slowing down by more than 97% vs. the prior year.  

 

Strong Recovery

real-estate-license-trend-2Thankfully, May, June, and July brought a strong recovery. And online schools like Real Estate Express, AceableAgent, and The CE Shop are busier than ever. 

Still, as of the end of July, licenses are still down by 29% in Florida and 12% for Texas. Data for California is unavailable as of publication date, but it’s expected to be down at a similar rate.  

Despite the stops and starts in licensing, there are still encouraging signs that Realtors are still confident.

The total number of new Realtors has grown year over year. According to the National Association of Realtors, there were 1,409,727 members at the end of this July, up 1.9% from the same time the prior year. And even just comparing July to June, the count has grown by almost 1% – a good sign that agents are getting their licenses.

 

Takeaway and Impact

“Real estate agents have an entrepreneurial spirit and are always ready for a challenge”, says Jasen Edwards, head of the Agent Advice Editorial Board. The initial scare of the pandemic naturally caught everyone off guard. But people are still getting their licenses, and times like these are rewarding for those who seek out opportunities in the market.”