The real estate industry is seen by some as outdated. Though the real estate profession isn’t dead, it’s certainly changing. Online listings make it possible for clients to do their own research, while lockboxes with digital access codes allow residential real estate shoppers to access homes on their own. This industry has an aging workforce that’s perfectly poised for an infusion of fresh young talent to give real estate a much-needed boost of creativity and innovation – especially in a growing market.
The Workforce Is Aging
In 2016, the average age of real estate professionals was 49, according to data from the Bureau of Labor Statistics. This is slightly higher than the median of 42.2 for all occupations. The Institute of Real Estate Management (IREM) indicates that property managers are even older, with an average age of 50 or more. Less than five percent of all real estate professionals are between the ages of 20 and 24. About 16 percent are between 25 and 34, and less than 20 percent are aged 35 to 44.
One of the primary drivers in the industry’s push to recruit younger talent is simply the need to replace those who are retiring and leaving the industry. Poline Associates warns that the employee pool is particularly small for younger hires. Though there were approximately 84 million baby boomers, Generation X has less than 66 million people.
If real estate companies hope to stay competitive, they’ll need to draw in a steady source of younger employees who can step into the shoes of retirees. IREM sees a clear need to attract fresh talent to the industry and has begun taking major strides in this direction. IREM actively partners with several universities to connect with prospective real estate professionals and sees 90- to 100-percent job placement at these institutions.
Commercial Real Estate Opportunities
IREM’s chief strategy officer for education, outreach, and advocacy, Nancy J. Kirk, told National Real Estate Investor that college graduates tend to gravitate toward property management and brokerage roles when seeking jobs in the real estate sector. However, the college professors that Kirk speaks to have indicated that commercial real estate (CRE) isn’t seeing the same level of interest.
Commercial real estate brokerage firm Graham, Langlois & Legendre published a blog dubbing commercial real estate a “dinosaur industry.” The piece quotes millennial CRE agent Peter Dumaine, who comments that “In a time when technology runs almost every facet of business, it’s interesting to step into a career where technology is just starting to pick up and be utilized.” Lagging behind the trends, CRE may be poorly placed to attract the younger crowd that it needs.
Kirk notes that “College students who choose to pursue real estate usually do so because they grew up in a real estate family.” This is seen by many as a legacy career, and as such, it doesn’t generate as much fresh interest as other industries. Of property management, Kirk says that “more people stumble into this career. It is not done with intention.”
The Real Estate Model Is Changing
Though college students and other young job seekers may not have taken note yet, the real estate industry is moving toward more modern changes. To keep pushing forward with these, the industry will need a strong and steady workforce that can act as a powerful driver for essential change.
At the 2016 CCIM conference in Atlanta, several critical changes were outlined. These included a general shift away from the traditional brokerage model toward an approach that offers more consulting services. Companies are increasingly interested in professionals who can provide valuable industry insights and participate as consultants as much as brokers.
To attract young talent that can fulfill this need, the conference noted that firms may need to shift their operating strategies. The younger workforce tends to look for salaried positions and collaborative team-based work environments, in contrast to the traditional broker paradigm where individuals work alone and earnings are based on commission.
Technology and Innovation Can Revolutionize Real Estate
With young talent on board, real estate companies can access fresh viewpoints that are uniquely suited to drive innovation and utilize new tech-based solutions. An article in Globe Street noted that “millennials are a core part of the consumer demographic” for many new development projects. Even inexperienced real estate professionals can offer a “valuable perspective in higher-level strategic discussions.” Each demographic has its own preferences and outlook. Turning to millennials for their perspective in real estate can help firms connect with buyers in this same category.
Michael T. Lanning, IREM president, told Bisnow that “Real estate managers today have to be adaptable to changes in the workplace and in the properties they manage. And that includes adopting new technologies, software and apps.” Young talent fresh out of college can bring the kinds of insights that aging real estate firms need to stay at the cutting edge of the latest innovations.
Young Professionals Are Looking for Something Different
Real estate businesses that see the need for young talent may have to work hard to get it. According to the 2015 NAIOP Commercial Real Estate Compensation Survey, 77 percent of real estate firms have trouble hiring new talent. Realtor Mag speculates that enticing millennials to pursue real estate jobs may require a dramatic shift in the way these businesses are handled.
The magazine recommends commercial brokerages adopt new technology, promote more collaborative cultures, and highlight the potential for great work-life balance. From adopting mobile technologies to offering remote work opportunities, the right changes can attract the younger audience that the real estate industry is looking for.
If you’re intrigued by the possibilities in the real estate industry, you can become one of the exciting new hires to spearhead innovation in this area. The New England College Master of Science in Management – Real Estate Management online program will give you a solid foundation in this area. Online degree programs make it easy to further your education in your free time and prepare for a thrilling fresh start in a new industry.