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Real estate grads feel subprime mortgage crisis

Monday, March 17, 2008

ST. CLOUD, Minn. – Results of a January survey of real estate graduates conducted by the Minnesota Chair in Real Estate at St. Cloud State University indicate that subprime mortgage crisis problems that have impacted homeowners also have had an effect on real estate professionals.

The Minnesota Chair in Real Estate survey was initially designed as a wage survey, which is still the primary area of interest.  Additional questions are included to obtain graduates’ feelings regarding the real estate market as a whole as well as the segment of the market that they are most involved in.  The survey covering the years 2006-07, referred to here as the 2007 survey, was conducted in January 2008.  There were 141 respondents.

Asked to characterize their opinion of the current real estate market, not a single respondent to the 2005 survey described the market as “poor.”  The 2007 survey, however, elicited “poor” (as opposed to very good, good, average) from 53 percent of the mortgage banking respondents.  In other industry segments, “poor” was the choice of 9-51 percent of respondents.

                How Do You Rate the Market?                                                       How Do You Rate the Market?

2005

2007

Very

Good

Good

Average

Poor

Very Good

Good

Average

Poor

Appraisal

14%

66%

21%

0

Appraisal

0

17%

57%

27%

Development

38%

38%

23%

0

Development

14%

57%

14%

14%

Property Management

29%

57%

10%

0

Property Management

0

39%

57%

9%

Mortgage Banker

3%

84%

13%

0

Mortgage Banker

0

12%

35%

53%

Broker

13%

80%

7%

0

Broker

0

26%

41%

33%

Assessor

7%

57%

36%

0

Assessor

0

0

73%

27%

Res-All

11%

63%

25%

0

Res-All

0

12%

37%

51%

Comm-All

19%

71%

10%

0

Comm-All

1%

23%

52%

21%

Mortgage bankers’ job satisfaction appears to have dropped dramatically, based on responses to “Do you see yourself in the same career in five years?”

2005

2007

Appraisal

93%

90%

Devel

100%

100%

Prop Mgt

76%

88%

Mor Bank

91%

59%

Broker

100%

92%

Assessor

100%

86%

The mortgage banking sector also experienced a sharp drop in business ownership.  From 2005 to 2007, mortgage bankers’ positive responses to “Do you own your own company?” fell 10 percentage points:

2005

2007

Appraisal

28%

30%

Devel

42%

43%

Prop Mgt

14%

17%

Mor Bank

16%

6%

Broker

27%

22%

Res-All

24%

18%

Com-All

20%

19%

Contact:  Professor Steven Mooney, finance, insurance and real estate, 320-267-3728, moon@stcloudstate.edu 

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