Posted by: Richie Bernardo

“Location, location, location” might be the most hackneyed expression in the real-estate handbook, but the principle applies just as much to realtors as it does to their clients. After all, success in the industry hinges on both an agent’s work ethic and area of operation.

Indeed, a career in real estate offers abundant perks. You can be your own boss, determine your own schedule, earn a potentially high income, and be ready to help your clients buy, rent or sell properties in just a few weeks or months, depending on your state’s licensing requirements. With time and experience, you could even build your own real-estate brokerage and hire your own agents.

But the job isn’t always a bowl of cherries, especially at the onset, as most established agents are inclined to admit. It requires real commitment, work outside normal business hours, a likeable personality and financial stability — in case of a tough season.

That’s why some locations are better environments than others for this particular profession. WalletHub’s analysts compared the 150 most populated cities to determine which among them is most conducive to a healthy career as a real-estate agent. For this report, we examined a total of 13 key metrics, ranging from sales per agent to annual median wage for real-estate agents to housing-market health index. Scroll down for the results, advice and insight from seasoned real-estate experts, and a detailed description of our methodology.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/18713/geochart-realestate.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="http://ift.tt/2lrzSNv;  

Overall Rank	City	Total Score	‘Job Opportunity & Competition’ Rank	‘Real-Estate Market Heat’ Rank
1	Denver, CO	57.70	3	6
2	Irvine, CA	55.38	4	7
3	Seattle, WA	54.24	39	3
4	Austin, TX	53.80	43	2
5	Aurora, CO	52.56	14	14
6	Portland, OR	52.49	21	8
7	Indianapolis, IN	52.42	1	150
8	San Francisco, CA	51.68	8	25
9	Colorado Springs, CO	50.83	10	30
10	Boston, MA	49.82	6	42
11	Grand Rapids, MI	49.81	5	47
12	Boise, ID	49.74	45	5
13	Honolulu, HI	49.64	2	80
14	Raleigh, NC	49.12	47	17
15	Madison, WI	49.07	28	27
16	Lubbock, TX	49.05	38	10
17	Sioux Falls, SD	48.83	32	18
18	Henderson, NV	48.77	35	24
19	Washington, DC	48.71	25	31
20	San Jose, CA	48.54	29	26
21	Reno, NV	47.80	31	32
22	Fremont, CA	47.52	24	36
23	Anchorage, AK	47.23	22	34
24	Huntington Beach, CA	46.96	9	71
25	Nashville, TN	46.77	71	13
26	Springfield, MO	46.61	26	35
27	Scottsdale, AZ	46.48	41	33
28	Salt Lake City, UT	46.34	23	44
29	Durham, NC	46.24	19	56
30	Lincoln, NE	45.76	78	19
31	Las Vegas, NV	45.40	34	52
32	Vancouver, WA	45.23	66	28
33	Rancho Cucamonga, CA	45.06	13	84
34	Knoxville, TN	45.05	12	89
35	Oakland, CA	44.99	53	40
36	Glendale, CA	44.85	27	65
37	North Las Vegas, NV	44.52	37	59
38	Overland Park, KS	44.39	67	20
39	Houston, TX	44.31	94	4
40	Tempe, AZ	44.31	107	11
41	Ontario, CA	44.11	33	70
42	Oxnard, CA	43.92	20	85
43	Santa Rosa, CA	43.54	49	58
44	Bakersfield, CA	43.48	18	90
45	Irving, TX	43.44	101	9
46	Spokane, WA	43.19	30	79
47	Jersey City, NJ	43.04	11	115
48	Anaheim, CA	42.79	44	72
49	New York, NY	42.77	7	119
50	Gilbert, AZ	42.66	98	23
51	San Diego, CA	42.62	59	64
52	Santa Clarita, CA	42.25	40	81
53	Riverside, CA	42.06	36	91
54	Los Angeles, CA	42.02	46	76
55	Yonkers, NY	41.93	16	116
56	Plano, TX	41.90	115	22
57	Omaha, NE	41.86	63	68
58	Sacramento, CA	41.85	58	69
59	Corpus Christi, TX	41.71	88	21
60	Fontana, CA	41.68	42	88
61	Orlando, FL	41.23	138	16
62	Garden Grove, CA	41.20	50	86
63	San Antonio, TX	41.13	83	29
64	Chandler, AZ	40.63	105	38
65	Chattanooga, TN	40.61	68	49
66	Laredo, TX	40.48	89	15
67	Atlanta, GA	40.48	147	12
68	Long Beach, CA	40.41	57	92
69	Columbus, OH	40.28	86	63
70	Oklahoma City, OK	40.12	93	48
71	Amarillo, TX	40.03	83	43
72	Oceanside, CA	39.99	72	73
73	Peoria, AZ	39.97	112	37
74	Chula Vista, CA	39.76	91	51
75	Dallas, TX	39.45	113	39
76	Memphis, TN	39.44	99	41
77	Santa Ana, CA	39.34	51	103
78	Minneapolis, MN	39.22	73	77
79	Moreno Valley, CA	38.86	52	110
80	San Bernardino, CA	38.78	62	100
81	Winston-Salem, NC	38.73	15	131
82	Huntsville, AL	38.73	54	112
83	Stockton, CA	38.67	64	98
84	Modesto, CA	38.64	70	93
85	Tulsa, OK	38.13	74	95
86	Tacoma, WA	37.98	130	46
87	Port St. Lucie, FL	37.88	119	61
88	Phoenix, AZ	37.84	110	67
89	Des Moines, IA	37.66	65	107
90	Kansas City, MO	37.56	87	78
91	Cape Coral, FL	37.53	120	54
92	Lexington-Fayette, KY	37.53	123	53
93	Fort Wayne, IN	37.52	118	1
94	Fort Worth, TX	37.50	135	45
95	Albuquerque, NM	37.26	61	121
96	Tampa, FL	37.19	127	57
97	Charlotte, NC	37.02	104	74
98	Mesa, AZ	36.83	126	66
99	Garland, TX	36.70	131	60
100	Virginia Beach, VA	36.68	56	124
101	Grand Prairie, TX	36.60	132	62
102	Wichita, KS	36.56	116	50
103	St. Paul, MN	36.50	80	101
104	Arlington, TX	36.42	136	55
105	Norfolk, VA	36.30	79	104
106	Chesapeake, VA	35.98	60	127
107	Rochester, NY	35.85	81	108
108	Pittsburgh, PA	35.61	82	114
109	Cincinnati, OH	35.50	109	96
110	Tallahassee, FL	35.23	77	117
111	St. Louis, MO	35.06	103	102
112	Little Rock, AR	35.04	76	118
113	Glendale, AZ	34.99	125	87
114	Birmingham, AL	34.69	143	75
115	Richmond, VA	34.65	122	94
116	Louisville, KY	34.55	140	83
117	St. Petersburg, FL	34.52	136	82
118	Baton Rouge, LA	34.49	102	105
119	Buffalo, NY	34.09	75	128
120	Newark, NJ	33.78	55	141
121	Providence, RI	33.27	69	133
122	Akron, OH	33.18	129	97
123	Fresno, CA	33.13	114	113
124	Worcester, MA	33.01	48	143
125	Tucson, AZ	32.81	108	120
126	Montgomery, AL	32.36	17	148
127	Augusta, GA	32.21	90	130
128	Baltimore, MD	32.12	139	106
129	Pembroke Pines, FL	32.05	133	111
130	Chicago, IL	32.01	111	126
131	New Orleans, LA	31.98	83	140
132	Toledo, OH	31.80	92	132
133	Greensboro, NC	31.62	117	123
134	Miami, FL	31.56	142	109
135	El Paso, TX	31.52	97	134
136	Fort Lauderdale, FL	30.68	121	129
137	Cleveland, OH	30.62	134	122
138	Jacksonville, FL	30.34	148	99
139	Shreveport, LA	30.23	106	138
140	Newport News, VA	30.11	100	137
141	Milwaukee, WI	29.91	95	139
142	Hialeah, FL	29.08	146	125
143	Mobile, AL	28.77	96	145
144	Philadelphia, PA	28.01	141	135
145	Aurora, IL	27.69	128	142
146	Brownsville, TX	26.92	145	144
147	Jackson, MS	25.28	150	136
148	Fayetteville, NC	24.83	124	147
149	Columbus, GA	23.64	149	146
150	Detroit, MI	21.67	144	149

 

Ask the Experts

The real-estate market is often unpredictable. For advice and insight on the current and future conditions shaping the trade, we turned to a panel of experts in fields such as housing, labor and political economy. Click on the experts’ profiles to read their bios and thoughts on the following key questions:

1. Should real-estate agents feel threatened by new apps and other online tools offering services to potential homebuyers?
2. How can real-estate agents protect themselves from the “boom-bust” cycle of the housing market?
3. What tips do you have for a young real-estate agent? What does he or she need to do in order to get ahead in the current marketplace?
4. How likely is it that the Federal Reserve would increase interest rates again in the coming months? How would that impact real-estate agents?

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• Douglas M. McCoy Director of the Benecki Center for Real Estate Studies in the Kelley School of Business at Indiana University
• Jiro Yoshida Assistant Professor of Business in the Smeal College of Business at The Pennsylvania State University
• William G. Hardin Professor of Finance and Real Estate, and Director of the Jerome Bain Real Estate Institute at the Florida International University College of Business
• Tim Kelley Professor of Entrepreneurship and Economics in the College of Business at Grand Canyon University, and Chairman and Founding Member of the Canyon Angels
• Jeff Engelstad Clinical Professor in the Burns School of Real Estate & Construction Management at University of Denver, Daniels College of Business
• Liang Peng Associate Professor of Risk Management in the Smeal College of Business at Pennsylvania State University
• Rodney Ramcharan Associate Professor of Public Policy, and Director of Research in the Lusk Center for Real Estate at University of Southern California, Sol Price School of Public Policy
• Victoria Basolo Professor of Planning, Policy and Design in the School of Social Ecology at the University of California, Irvine
• Glenn Crellin Associate Director of Research (now retired) in the Runstad Center for Real Estate Studies at University of Washington
• Peng Liu Professor of Real Estate and Finance at the Cornell University School of Hotel Administration
• Eli Beracha Assistant Professor in the Tibor and Sheila Hollo School of Real Estate at the Florida International University College of Business

Douglas M. McCoy Director of the Benecki Center for Real Estate Studies in the Kelley School of Business at Indiana University Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Real estate agents shouldn't feel threatened because the fundamental core of their business success, relationships and service, doesn't change so instead they should positively engage the new technology that helps them improve their performance in these key areas. How can real estate agents protect themselves from the boom-bust cycle housing market? They should manage their finances well over time with the goal of creating wealth on their balance sheet and passive income on their income statement. Day to day, real estate agents must focus on operating their business well and ignore what they can't control, economy and politics. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? Build meaningful relationships with their high performing peers and get meaningfully involved in causes important to the leaders and economic engines of their community. Always operate with grace, integrity, and great service. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? Not likely and if rates do increase, will be slight. Will remain in this situation until we are out from under Obama's regulation, tax and spending policies. Rising rates will actually be good news because that will mean an improved economy. Jiro Yoshida Assistant Professor of Business in the Smeal College of Business at The Pennsylvania State University Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? The competitive environment will surely change as what happened in other industries. For example, in retail, online shopping changed the entire industry. However, a question like “Will online shopping kill real shops?” is misleading because not all real shops are the same. Some shops are closing if their functions are substituted by online shops. Other shops are thriving if their functions are complementary. Similarly, not all real estate agents are the same. Those who provide services that are substitutable by online apps will be threatened, but those who provide complementary services would thrive. Academic research has identified various values of agents through face-to-face communications, reducing uncertainty, etc. How can real estate agents protect themselves from the boom-bust cycle housing market? The big issue for agents is not price booms and busts but swings in transaction volume. Academic researchers consider how these cycles can be eliminated, but individual agents have to take cycles as granted. Standard business practices in risky industry would apply. One strategy is to set up an institution to secure steady flow of deals by giving up some margins. Another strategy is to maintain more “real options” by maintaining multiple lines of businesses. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? Young agents should focus on learning. In other words, they should invest in human capital to have more “real options” for their future career. By better understanding how markets work, they can be successful in real estate brokerage or other industries. For example, Mr. Fisher, the founder of Gap, Inc., started his career as a real estate agent and he thinks that his experience as an agent was invaluable when developing his apparel business. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? If I knew it, I wouldn’t tell you and profit from it myself. The information is incorporated in the current interest rate and the yield curve. The relation between interest rates and transaction volume is not simple because it also depends on the expected economic growth, foreign exchange, international capital flow, etc. That’s what academic researchers are struggling to understand. William G. Hardin Professor of Finance and Real Estate, and Director of the Jerome Bain Real Estate Institute at the Florida International University College of Business Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Agents need to focus on how they add value to a transaction. There is much less informational asymmetry in the market than in the past. Data on properties are readily available. So, whether representing a buyer or seller, one has to be able to add value. Technology provides all participants more information. In the long-term, there will be continued pressure on the residential commission structure which is already very evident in high end institutional commercial real estate. But, technology should also allow professional agents to do more work in a given time period. My guess is that there will be fewer and fewer agents over time. My hope is that the fewer agents will be better compensated which can come from being more productive using technology. The industry very much faces disruptive technologies that might well completely change the market. How can real estate agents protect themselves from the boom-bust cycle housing market? Agents need transaction volume. Hence, they should sufficiently understand how overall real estate markets work and be attentive. What they should hope for is a normal market driven by economic fundamentals. The best agents and brokers know how their markets are tied in with local, regional, national and in some instances international markets. In South Florida, for example, it should not surprise anyone that a large decline in the value of the Brazilian real versus the dollar will impact real estate buyers from Brazil. In the end, economic fundamentals set the market. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? A real estate professional has to understand real estate markets and needs to identify how they can add value in their specific market and to the particular market players with which they deal. This is in residential as well as commercial property representation. They need to be able to do all the basics and more. They need to be entrepreneurial and creative, but also have to be grounded in understanding how the markets work. They have to be able to see through all the noise that comes with selling property. To have a long-term career in real estate you have to discern what really is happening and how markets work. There is plenty of “nonsense” advice out in the real estate market. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? I do not see any major connection between the two in the short-term. Long term rates work with anticipated rate changes. The markets already anticipate some increase in short-term rates. With the prospect of economic uncertainty, however, rates have actually improved. The only way mortgage rates move up substantially is with solid economic growth. If that is the case, the growth offsets a marginal increase in rates. In short, rates will only go up with continued positive economic growth. Growth in GNP is a prerequisite for a strong long-term residential housing market. Residential real estate in aggregate is a tertiary good, meaning that demand is derived from the economic well-being of end users and/or owners. Tim Kelley Professor of Entrepreneurship and Economics in the College of Business at Grand Canyon University, and Chairman and Founding Member of the Canyon Angels Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Yes, I believe the value offered by the typical agent both listing and buyer’s rep is minimal and that new apps offer better information. How can real estate agents protect themselves from the boom-bust cycle housing market? Agents should prepare to leave the industry. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? Be very aware of coming technology and position yourself to offer a different value to buyers or sellers other than attempting to broker a transaction for a 6% / 3% commission. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? The Fed will likely be forced to halt the raises and likely enter into further easing. I believe that based on affordability measures we are already way overvalued in the housing sector and that deflation is likely. Jeff Engelstad Clinical Professor in the Burns School of Real Estate & Construction Management at University of Denver, Daniels College of Business Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? They should feel both threatened and empowered by these new apps and new technologies. Threatened if they are stuck in the paradigm that only real estate agents should have the data, and empowered if they are of a mind to educate clients on the appropriate use of the tools and apps available. A real estate agent “in the market” on a daily basis, has a network of other agents and specific knowledge that may not be available to a buyer on-line or simply using an app. How can real estate agents protect themselves from the boom-bust cycle housing market? Get over it. It will happen. It will happen multiple times in your career. Since you know it’s coming, why not plan for it? An agent’s income fluctuates with the market. Don’t set up your personal lifestyle to survive only at the top of the cycle. Plan ahead. Reduce your personal debt, pay off your own home and don’t drive a car you have to borrow money to buy. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? Develop a personal business plan and strategy. In a good market you can simply be “blown in the wind” and still make decent money. If you want to last, be intentional. Become an expert in an area or in a community. Be a professional. Return calls on time, send emails to follow up, exude professionalism. Expand your network and your circle of influence. Serve on a volunteer board or two, join the Rotary or whatever gets you connected to people you don’t work with every day. Work hard. Be conservative with your own as well as your client’s finances, and become a teacher and mentor to those you serve. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? If the Fed raises rates again this year, it will be a small increase. As money gets more expensive, it becomes harder to qualify new buyers. But, maybe you should be counseling your buyers to buy what they think they can afford and not the max they can qualify for. Liang Peng Associate Professor of Risk Management in the Smeal College of Business at Pennsylvania State University Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Yes. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? Given the turbulence in the stock market, I do not think the Fed will be in a hurry to raise the rate again. However, when the stock market is not doing well, the housing market will not do well in the near future. This might not be good news for real estate agents. Rodney Ramcharan Associate Professor of Public Policy, and Director of Research in the Lusk Center for Real Estate at University of Southern California, Sol Price School of Public Policy Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? The real estate market is a “search” market. Neighborhoods and houses differ dramatically, and buyers and sellers often have only incomplete information about neighborhood quality and the local real estate market. Real estate agents have long played a huge role in lowering these search costs, helping buyers and sellers come together across space to complete transactions. Zillow, RadPad, etc. now make all this information available in a split second online. I think this technology has the potential to be enormously disruptive for real estate agents, much in the same say as online moves and DVDs have disrupted movie theaters. That is, there may still be a role for realtors, as they can still help buyers and sellers process the available information, lowering the cognitive cost of processing masses of information. After all, buying or selling a home is still a complex transaction that few people do regularly. But the central role of realtors will likely shrink. Easier access to information means that is now easier to enter the real estate business, and accountability is now increased. All this will put pressure on commissions. But the industry might still exist in the long run. People still go to movies for a particular experience, but much of the content is now consumed at home. Likewise, radio is still around despite TV. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? Equity and bond markets both point to significant future economic weakness. Likewise, the international news is very mixed, with Brazil in a recession, China slowing, and the other emerging markets also showing signs of weakness. There is also little evidence of inflation. Indeed, falling oil prices will likely exert downward pressure on inflation. Thus, unless there is a dramatic reversal in sentiment or massive positive surprises in economic data over the next quarter or so, it seems very unlikely that the Fed will tighten in the coming months. Victoria Basolo Professor of Planning, Policy and Design in the School of Social Ecology at the University of California, Irvine Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Online tools provide buyers and sellers with a lot of information that can be tracked over time and space. These features assist and potentially threaten real estate agents. They assist agents by allowing a shift of much of the legwork of searching for a property to the buyer. The buyer can choose to physically visit only homes that seem very well suited to them. Traditionally, an agent listened to the buyer's desires and tried to match a home accordingly. Sometimes this works, but something may be lost in translation or the available inventory may be low and, as a result, the agent may show the buyer houses that are not good matches. Such a situation can lead to wasted time and/or frustration for both parties. Sellers can present their home to a wider audience of buyers online which can help the seller and agent; the larger the pool of buyers, the better is it for the seller. Online tools also can provide a reality check for the seller. Accessing information on recent sales in their area tells the seller if their desired price is reasonable and helps the seller "price to sell". At the same time, if houses are selling in the area at expected prices, but a particular seller's house is not getting offers, the seller may blame the agent. How can real estate agents protect themselves from the boom-bust cycle housing market? In industries characterized by boom-bust periods, people dependent on the industry for their livelihood should take three approaches: 1) save during boom periods to carry you through busts; 2) learn about any (often temporary) government or private programs or processes that are related to your industry and work these opportunities until the industry rebounds; and 3) adapt by expanding knowledge and services related to your industry. Example of these last two for agents, respectively, include the process of government refinancing programs, short sales, and foreclosures, and, sale of different types of real estate, rental leasing, and property management. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? Real estate agents beginning their career should be willing to work very long hours, 7-days a week. Securing a listing may mean weeks or months in the field knocking on doors to introduce yourself to prospective clients. New agents should be tenacious and respond quickly to clients. It is very important for agents to listen to clients, inform clients, and encourage clients through the buying and selling process. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? It is somewhat likely the fed will raise interest rates in the coming months, but relatively low inflation suggests no substantial hike will occur in the near future. A small increase in the interest rate should not greatly impact real estate agents. Inventory and buyer qualifications/loan approval process in general, are most important in the coming months. Glenn Crellin Associate Director of Research (now retired) in the Runstad Center for Real Estate Studies at University of Washington Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Yes and no. What agents need to focus on are their skills preparing homes for market, their negotiating skills, and their detailed market understanding to help prevent sellers from being too greedy in pricing, and helping buyers understand fair market values for properties. How can real estate agents protect themselves from the boom-bust cycle housing market? The traditional wisdom is to diversify their portfolio of skills. Whether than means becoming an expert in commercial property, or working with owners who desire to lease out their properties, it means they must move beyond their single-family comfort zone. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? This is tough, because so many of their peers have not yet entered the ownership market, and those who have are often frosted because they are often outbid on properties they can afford by investors or other buyers who are able to purchase the properties for cash. Peng Liu Professor of Real Estate and Finance at the Cornell University School of Hotel Administration Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? Yes, the information advantage of real estate agents are reduced over time due to the prevalence of internet and online tools. For example, price information is now easily available from Zillow. However, there are roles of the agents that cannot be replaced by apps or online tools, such as bargaining and negotiating. Also, there are home buyers who are time constrained or not familiar with the home buying processes, who will need assistance from agents anyway. Finally, home purchase is a searching and matching process, and therefore it is very important to understand the clients' preferences and constraints. Instead of feeling threatened by the apps and online tools, agents should try to better understand the preferences and constraints of their clients, and increase their network with other agents, so that they can help their clients find their dream homes. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? First, sign up with a reputable brokerage, where you can receive complete training. Second, network as much as possible with other agents, lawyers, mortgage brokers, inspectors, and investors, so you know who to call when there is such a need. Third, be prepared to work odd hours, and be willing to go extra miles to help clients, instead of just making deals done. How can real estate agents protect themselves from the boom-bust cycle housing market? First of all, the income stream of a real estate agent is much more variable than that of an ordinary person. Therefore, people who choose this career tend to be more risk tolerant than others. With that being said, agents can protect themselves by putting some income in safer investment, such as CDs, money market funds, bonds, treasury bills, etc. Or maybe short on REIT ETFs to balance the risk? How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? If interest rates increase again, then there are two effects:

1. In the short run, there is a positive impact on real estate agents' business, due to a "pulling forward" effect that more households will jump into the housing market before the rate raise, in order to lock in a low rate.
2. In the long run, there is a negative impact on their business, because mortgages become less affordable, especially for investors and first time home buyers who mainly rely on mortgages to finance home purchases. Therefore, agents who are specialized on investors will likely be affected the most.

Eli Beracha Assistant Professor in the Tibor and Sheila Hollo School of Real Estate at the Florida International University College of Business Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers? The rise in technology has closed the informational gap in almost every industry, not just in real estate, and in the same way that a medical patient can now find the answer to a lot of his or her questions online without needing to call the doctor right away, buyers and sellers are finding amazing tools and apps that also provide an incredible amount of data. However, this vast amount of information can become overwhelming, without them necessarily knowing how to interpret it correctly or to their maximum benefit. In the same way that an inexperienced patient would be reluctant to perform surgery on themselves, the typical buyer and seller will seek the help of a professional, because no amount of online or digital data can replace the expert interpretation that can increase the value of their investment. The agents that concentrate on becoming the local experts in a particular niche will not only stay ahead of the emerging technologies, they may actually help to design it. How can real estate agents protect themselves from the boom-bust cycle housing market? It's not about "protecting" - it's about learning to create stability in the midst of it. Real estate, like any financial or economical market, is cyclical so there will always be cycles of bust and boom, and in each cycle there is money to be made by learning which side of the wave you need to be surfing, or in other words, learning the opportunities these markets can create. Agents that focus solely on these waves could be classified as "opportunity agents," and though this method can be extremely profitable, it is a very risky and unstable business model because it needs to be reinvented with each passing cycle. And let's face it, even the best surfer will eventually wipe out. At the same time, people's personal situations will change over time, creating different types of housing needs: marriages, divorces, job transfers and family changes will occur no matter what part of the wave we're riding. Agents that focus solely on these changes could be classified as "necessity agents," and because these necessities will always exist, it is a very stable business model, where the profit is built up over an extended period of time, at a slow but steady rate. However, just like in a financial portfolio, diversity is the key to truly maximize the earnings while mitigating the risks. About 50-75% of an agent's business should always come from being able to fulfill the consumer's urgent real estate necessities, while the other 25-50% can come from riding whatever opportunity is provided by the current market. What tips do you have for a young real-estate agent? What does she/he needs to do to get ahead in the current marketplace? I am working with a very innovative firm called Avanti Way, which saw a real need among the young, real estate professionals who wanted to maximize the fledgling technologies that were being developed at the time. What they've learned in that process is that young agents also have a thirst for innovation that I think comes as second nature to their generation: because they are on the cusp of technology, they want to create new and better ways of doing things. If they sign with a broker that follows the old, traditional models, they're eventually going to burn out and become disillusioned with the industry; so it's important that from the very beginning, they align themselves with a broker who is willing to provide them the right technology and training, and perhaps more importantly, is willing to innovate alongside them in an ever-changing market. It becomes an organic environment for growth if they feel that they're earning money while creating positive change for their clients and the industry at large. How likely is it that the Federal Reserve will increase again interest rates in the coming months? How will this impact real estate agents? The interest rates are at the lowest they've been in decades, so the rise in interest rate is inevitable. Nonetheless, we have to look at what this actually means for both the consumer and the agent. When interest rates are as low as they are now, banks tend to lend less because they stand to make more money investing in other assets, and so only a reduced percentage of customers can actually take advantage of these limited number of lower rate loans. The less purchasing power, the less opportunity for agents, across the board. The proof of this is in the current cash-to-loan transaction ratio. In Miami alone, 50-75% of the transactions are all cash, which is not normal, with the majority of condo properties still not qualifying for low down payment loans. If the rates rise, preferably to less than 6%, the banks will start to generate more loans with new, competing programs, which then creates a greater opportunity for agents and consumers alike. Yes, there is a percentage of homeowners that will end up paying more for those loans, but the majority would not have been able to purchase otherwise. Any rise above 6%, I believe that the opposite occur: a surplus of banking loans will be available, but there will be a reduction in the number of consumers willing to accept the higher price tag. In the economy, as in life, balance is good.

Methodology

In order to identify the best cities to work as a real-estate agent, WalletHub’s analysts compared the 150 most populated cities across two key dimensions, “Job Opportunity & Competition” and “Real-Estate Market Heat.” Data for the metrics marked with an asterisk (*) were available only at the state level.

First, we compiled 13 relevant metrics, which are listed below with their corresponding weights. Each metric was given a value between 0 and 100, wherein 100 is the best value for that metric and 0 is the worst.

We then calculated the overall score for each city using the weighted average across all metrics and ranked them accordingly.

Job Opportunity & Competition – Total Points: 60

• Sales per Agent: Full Weight (~7.50 Points)
• Median Home Price*: Full Weight (~7.50 Points)*Note: *Real-estate agents are typically paid a commission based on the value of the home.
• Annual Median Wage for Real-Estate Agents: Full Weight (~7.50 Points)
• Employment Attractiveness Rank (measures “real-estate job density” and “real-estate job competition”): Full Weight (~7.50 Points)
• Real-Estate Employment Growth (2012–2014): Full Weight (~7.50 Points)
• Annual Median Wage Growth for Real-Estate Jobs (2012–2014): Full Weight (~7.50 Points)
• Unemployment Rate: Full Weight (~7.50 Points)
• Projected Number of Real-Estate Jobs Needed in 2020 per 100 Residents*: Full Weight (~7.50 Points)

Real-Estate Market Heat – Total Points: 40

• Home Turnover Rate: Full Weight (~8.00 Points)
• Housing-Market Health Index: Full Weight (~8.00 Points)
• Days on Market: Full Weight (~8.00 Points)
• Average Ratio of Home Sale Price to Home List Price: Full Weight (~8.00 Points)
• Building-Permit Activity (number of unit permits pulled per 1,000 residents): Full Weight (~8.00 Points)

 

Sources: Data used to create these rankings were collected from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, Zillow, Indeed, and the Georgetown University Center on Education and the Workforce.

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