Shelly Butterfield, 53, has more than 20 years of experience in the mortgage industry, in roles ranging from lending officer to regional manager of a lending company. She’s accustomed to the rhythms of her commission-based work, hustling in busy months to prepare for slow winters, keeping her eye on a shifting lending landscape so she knows what products are available to different clients.
She’s also accustomed to making a handsome wage: $80,000 a year — or more, if she pushes herself. The money goes far in her hometown of Puyallup, Wash., a small rural community near Tacoma.
Then in July 2007 one company funding loans for several of her clients went out of business. Then others did.
Now Butterfield has become a poster child for the real estate slide: Her income has fallen 85 percent and her home is in pre-foreclosure, scheduled to be auctioned to the highest bidder in August.
Butterfield is hardly alone. Among the many victims of the housing industry meltdown, the millions of people who worked in the field are among the hardest hit.
In residential construction alone, nearly a half-million jobs have disappeared since the peak in September 2006. Membership in The National Association of Realtors, which nearly doubled over the decade ending in 2006 to about 1.4 million, is on its way back down.
A May report from the Bureau of Labor Statistics indicated that year-over-year employment in “housing-related industries” was consistently below prior-year levels throughout all of 2007 and into 2008.
Agents and brokers’ incomes also is dropping. Median income for agents and brokers combined was $42,600 in 2007, down 10.7 percent from the $47,700 the group logged in 2006, according to NAR. Agents alone earned a median of $31,000 in 2007, down 10.4 percent from the $34,600 median income they earned in 2006.
For Butterfield, the situation is dire. Friends have offered to lend her money to keep current on mortgage payments on the contemporary three-bedroom house she bought for herself and the granddaughter she raises, but Butterfield won’t take their money — not without a job to guarantee she can afford to keep the house.
She now earns just $12,000 a year doing $10-an-hour jobs, including house-cleaning and temping as a security officer.
She’s not optimistic about her economic prospects, especially given how many peers she’s seen lose jobs and income during the market’s contraction. One employer offered her loan-processing work, but only for minimum wage.
“I have 309 job applications out right now. I don’t think I’m going to be hired at my age, and I don’t see this industry picking up and putting me back where I was,” she says. “There have to be at least a million people affected by this market.”
Normally, Butterfield’s savings and rental income would have carried her through a tough patch. But both those reinforcements evaporated: She bought her current home in early 2007 because a flood destroyed her original primary home and an adjacent rental. She had assumed her other properties could be rebuilt and rented, but due to legal technicalities she can’t rebuild and has been been forced to sell the land at a loss.
She put her current home on the market in March for $315,000 — slightly more than the $310,000 she paid for it — and has had only one looker thus far.
She didn’t bother to renew her state lending license when it expired in December.
The downturn also is hitting newer agents especially hard. Even those who had a strong running start are watching transactions take longer due to their clients’ financing challenges.
Brett West, a 38-year-old agent with McEnearney Associates Realtors in Washington, D.C., spent the first 16 years of his career working in public relations before making the leap to a career in real estate.
After closing two deals last fall, his first quarter in business, he felt confident enough to resign from his job at a PR firm and go full-time in real estate.
But as 2008 progressed, he watched as some clients’ deals fell apart or took on long, drawn-out schedules due to financing issues. Instead of achieving his goal of closing at least 12 transactions during 2008, he’s closed only one thus far — though he expects at least three more this summer.
Earlier this month, he resumed working 20 hours a week at the PR firm, both because he’s remained friendly with a former superior but, equally importantly, because he needed the financial stability of a salary.
“As an agent finding a second job, I’m grateful I didn’t have to take an evening or weekend job, waiting tables or bartending,” he says. “Real estate happens in the evenings and over the weekends.”
Indeed, real estate still happens. But as West, Butterfield, and others will attest, it happens more haphazardly than it once did — and for those working in the field, it’s ugly.