Speculation about this rapidly aging species has ranged from predictions on their abandoning the “Empty Nest” to their attraction to seasonal “Nests” (residences).  Some demographers predict they will retire in place, while others have them moving to other countries. 

No matter where they finally end up, the industry has gone out of its way to discern their direction and figure out how best to reap the benefits of what could be one of the most dynamic lifestyle shifts in recent history.

The Boomers In Your Office

But while the industry seems fascinated with the market impact of Boomer aging, it hasn’t really thought about the internal ramifications.  Simply put, a sizeable chunk of today’s production can be traced directly to a group of high performing agents who, over the next three years, will undergo dramatic shifts in their real estate careers.

The industry first took notice of its “Maturing” agent population when their average age hit the Big Five-Oh in 1997-1998.  At that point, this statistic was generally used to spice up keynote speeches or recruiting campaigns.  It just didn’t seem particularly relevant to the industry’s long-term future.  Rather, the industry seemed to assume either this group would live forever, or that the next generation would simply step up and take their turn at bat.

Now, as the median age of productive agents creeps closer to 56, another perspective emerges -- one that all brokerages must carefully factor into their business planning process.

“Stuff” Happens At 56

There are a number of reasons why the aging process is especially critical at this point in our industry’s history.   The first centers on the very nature of aging itself.  At 56, “Stuff” begins to happen to the human body and mind.  While everyone today probably has a 56-year old hard charging “Marathon Runner” in their lives, the fact remains that most of these bodies are beginning another chapter of their existence. 

Individuals who enjoyed thirty years of boundless energy and enthusiasm are beginning to notice the inevitable signs of deterioration in both.   The distance between familiar landmarks seems to get longer and the effort required for even the most common maneuvers increases.  

Granted, this phenomenon of maturation would have occurred regardless of outside circumstances.   It is important to note that many of these agents have been involved in one hectic record-breaking year after another for the past several years.  While this has been absolutely positive from a financial standpoint (for the agent if not the broker), it has taken a decided physical and mental toll. 

The effects are further exacerbated by the numerous factors that are combining to make the real estate sale a more complicated, arduous experience.  Today’s consumer is demanding a whole new range of services and expects a different agent-client relationship than their predecessors. 

The continuing waves of transactional technologies and new business models are continuing to deteriorate the level of inter-agent and inter-broker cooperation that have been an industry hallmark for decades.  At the Brokerage level, the reality of today’s business model demands that agents begin to shoulder responsibility for an increased share of expenses and fees.

“It Just Isn’t Fun Anymore!”

At the very moment many top agents should be reaching over to hit the button that puts their career on “Automatic Pilot,” the marketplace is demanding significant changes in how they do business and manage their client relationships.  More and more we hear them exclaiming that “Real Estate just isn’t fun anymore.”

While the precise impact of these converging factors on the brokerage community is not clear as yet, what is clear is that they will be significant – perhaps profound. 

The high performer has been the primary focus of industry attention for 25 years.  Important parts of the industry’s psyche are heavily invested in recruiting and retaining this precious commodity.  The traditional business model is largely built around the continued availability and success of this key human resource.   

Yet there is reason to believe that the next 24 to 36 months will see record numbers of agents begin to either “Retire” or “Relax” their efforts.  Evidence also suggests that a key component of this career shift may involve their migrating to work environments that are simpler in design and less costly.  In short this agent group may be looking to end their careers in a setting that offers a low-cost, no-hassle work environment. 

Can The X’ers Fill The Gap? 

One of the first questions inherent in these trends is whether the upcoming “X’er” agents can fill the space left by the departing Boomers.  While it’s too early to be absolutely sure, the available evidence is not encouraging.  

Agents in the 28-38 year old bracket appear to have adopted a unique philosophy about the role their career should play in their life.  While everyone knows at least one high performing agent in this group, they probably will not be their parent’s real estate agent. 

This generation places high value on a balanced life.  They value making time for family and believe in the sanctity of their weekend – a belief that can be difficult to reconcile with the reality of the residential sales lifecycle! 

They are not as prone to accept less compensation (“Paying Their Dues”) during the time span traditionally required to become a top agent.  In short, this agent does not appear willing to follow the blood and guts path blazed by his or her Boomer predecessors.

For the profitable brokerage, this raises a number of critical planning points.

While losing a top-performing agent is always something brokers try to avoid, it’s even more catastrophic when it occurs near their retirement or a reduction in activity level. 

But perhaps the greatest issue raised by the current trend has to do with the Boomer performer’s “Book Of Business” – their contacts, investors, clients, and customers. 

Who inherits this asset and how it will be used to determine future marketing and production directions could make it one of the most highly sought jewels in recent history. 

Understanding how to package, price, transfer and harvest this asset will be the subject of this column’s next three articles.  You can join in this experience by creating an “Aging and Productivity Profile” on your agent force.  How will these issues affect your brokerage and how can you take advantage of this upcoming opportunity?  Stay tuned.