The aging populations of Realtors and mortgage bankers and the apparent lack of new blood is a concern to many, and I recently received this note from someone in their 50s:
You have brought up what is in reality is the issue of ‘Succession Planning’ in the mortgage and real estate sectors. The numbers and facts are clear: ~78MM boomers retiring or reaching retirement and only 56MM individuals in the cohort behind them (Generation X) to replace them. When combined with the fact that the mortgage and real estate businesses are so entrepreneurial that many times the idea of succession planning is a foreign concept, you have a problem that will only get worse if it is not addressed. In my opinion, a huge challenge for our space right now and going forward, yet very few firms are doing anything to address the issue.
It is interesting to note where folks in their 20s are settling. Though they’re in deeper debt than ever before, new college graduates still need to live somewhere, right? Conventional wisdom holds that these bright young minds flock to centers of influence like New York, Boston and San Francisco, all known for being “cool” cities with high concentrations of “smart” people.
Census data from 2000-2010 suggests otherwise, however.
Las Vegas, of all places, recorded growth of 122,304 recent graduates, which represents a staggering 78% increase. Rounding out the top five metropolitan areas playing host to new graduates were Riverside-San Bernardino, CA; Raleigh-Durham, NC; Austin, TX; and Charlotte, NC—hardly perceived to be hotbeds of commerce and culture. In contrast, New York ranked 38th in terms of new graduate growth, while San Francisco ranked 48th, just above Detroit.
But one factor to remember, as Marilyn L. points out, is that:
Perhaps the reason the smaller cities (re: college grads) are seeing massively larger rates of population growth of grads is that their base numbers of grads on which the growth rates are calculated were probably fairly small to start with. A fairly small influx into Vegas or Durham can produce a big growth rate. With huge existing populations of young people in SF or NYC, it’s much harder to move the needle of percent growth, even with large numbers of incoming grads.
No matter how you view the stats, there is new talent out there. How to plug them into the real estate and mortgage sectors is really up to the current leaders on the ground today.
While it’s true that mortgages and real estate sectors provide a second career for many, a large number of today’s leaders are folks that started in their early 20s as their first job. That’s a story you don’t hear enough but it’s true. And the best firms are mostly run by these “lifers.” As for the reader comment above that succession planning is often a foreign concept to mortgage and real estate entrepreneurs, you could argue that’s been true in the past, but both businesses get way more sophisticated each year and it’s not just a wild west sales game anymore—especially mortgage lending which is now among the most highly regulated sectors in finance and requires a deep bench of experts in banking, financial market analysis, public affairs, law, real estate, marketing, sales, accounting, and on. So while the draw used to be “set your own hours” and “control your own destiny,” the new draw (and pitch by leaders to the new talent coming out of college) should be updated to say “first grow your career with a reliable paycheck” and “then learn how to be the next great leader” because there’s plenty of area for smart, ambitious grads to cover.
The mortgage and real estate sectors are starved for good management. The kids with these skills will be running the show soon enough, and will have the paychecks to match.