Real estate sales are hot. As a result, more Texans are getting a real estate license. Despite the rush to sign up, however, there is still plenty of room for others – especially compared to the most populous states.

“The number of active real estate licensees provides a measure of the relative size of the real estate brokerage industry through the years and across state boundaries,” says Charles Gilliland, research economist with the Real Estate Center at Texas A&M University. “Among the largest states, Texas lags California, Florida, and New York in total active licensees.”

Texas has 100,000 active real estate licensees (80,000 of them are Texas REALTORS®, members of the Texas Association of REALTORS®). California has four times that number of active licensees. Florida has twice as many, and New York has 50% more.

The number of active Texas real estate licensees peaked at nearly 154,600 in 1986. Then came the real estate bust. By 1997, the total had dropped to fewer than 81,200.

“In the 1990s, school finance reform imposed a substantial new tax on real estate license renewals,” Gilliland says. “That tax and increased educational requirements combined to further erode the number of active agents.”

Since 1997, the number of Texas real estate licensees has been growing. Today, there are an estimated 140,000 Texas licensees. But while the number of agents has been growing modestly, the number of Texans in need of real estate services has exploded.

“The number of active agents per 1,000 Texans is about half what it was in 1984-88,” says Gilliland. “In 1985, the industry fielded 9.4 agents for every 1,000 state residents. That ratio hit bottom in 2000 at 4.1. Today it’s about 4.3 agents per 1,000 Texans.”

Theoretically, notes Gilliland, the number of licensees should increase and decrease as the population grows and economic activity expands and contracts. More people buying homes means more business for more agents.

“Real estate licensees who think there is too much competition in Texas should thank their lucky stars they work here and not in Florida,” Gilliland says with a chuckle.

In 1986, Florida led the nation with 19.5 real estate agents for every 1,000 residents. By 2000, the Sunshine State was down to 9.4 agents per 1,000 – substantially fewer than the peak but still twice as many per 1,000 citizens as Texas.

The agent-to-resident ratio in California, Florida, and New York has been going up since 2001.  The California ratio is up 30%, Florida 20%, and New York 26%.  The Texas ratio is up only 5% since 2000.

Maryland holds the record for the fewest real estate agents with one per 1,000 residents in 1990. Massachusetts holds the record for the greatest saturation of real estate agents per 1,000 residents – 37.8 in 1992.

Gilliland believes technology has helped fewer agents accommodate the increased demand for services.  

“One explanation for the differences in state-to-state real estate agent populations may relate to the feverish investment activity in residential real estate in California, Florida, and New York,” notes Gilliland. “Until recently, that kind of activity has largely bypassed Texas markets. Reports suggest that investors from other states, however, discovered Texas in 2005.”