Housing crisis diminishes local Realtors’ profits

Sarah McGrath

Local agents say other markets hit harder than Kent’s

The images and stories associated with the current mortgage crisis are those of banks being bought out by the government and homeowners like the 90-year-old woman from Akron who shot her herself inside of her foreclosed home.

But there is an untold story to this crisis – that of the Realtor whose livelihood depends on the buying and selling of homes.

Realtors do not have a fixed salary but rather generate their income from commissions made when they sell a home. When homes are not being bought, real estate agents are not making money.

Bob Bossar, a Realtor at W.W. Reed & Son, said his agency has experienced a 25 percent drop in the number of homes they are selling, compared to when the housing market was stable. W.W. Reed & Son, located on East Main Street in downtown Kent, is the oldest continuing real estate agency in Portage County and deals primarily in residential and commercial property.

“The market is going to continue to be slow because there is an overabundance of inventory on the market,” Bossar said.

Another contributing factor to the crunch that real estate agents are feeling is the decreased value of housing. Bossar explained that the home values in Kent have dropped 16 percent from where they were just a year ago.

But the loss the Kent market has felt is not as dramatic as other housing markets across the country, Realtor Marlin Palich said.

“The Florida market, for example, saw home values appreciating 30 percent to 40 percent every year,” Palich said, who is the Ohio regional vice president of Century 21 Prestige Realty Group. “So when the housing market started to experience problems, certain areas, like Florida, saw a more dramatic loss.

Ohio never experienced that double-digit appreciation, making it slightly more stable than other areas of the county.”

Century 21, which has offices across the country, including one in Kent, has experienced an 18 percent decrease in business, Palich said.

Palich explained that real estate agents usually receive a 6 percent commission from the sale of a home but only a portion of that percentage goes toward their salaries. A large portion covers fees and advertising associated with selling a home.

“In today’s marketplace it is crucial to work with a Realtor because it has evolved so much,” Palich said. “There are so many regulations and forms to navigate that it is our job to keep people on track and educated so they make the right decision.”

There is a difference between a Realtor and a real estate agent. Realtors are members of the National Association of Realtors, while real estate agents are not.

The only area of the housing market that does seem to be generating some movement and income for Realtors is that of the rental market. Both Bossar and Palich mentioned while the atmosphere is not spectacular, more people than normal seem to be buying rental properties like apartment buildings and multiple-family homes.

Despite all of the problems the real estate market is currently experiencing, both Bossar and Palich predict it will to begin to correct itself by next summer.

“No matter what that real estate industry will rebound,” Palich said. “It is still a safe investment.”

Contact public affairs reporter Sarah McGrath at [email protected].