A new area increasing in importance is real estate securities and syndication. The real estate securities and syndication specialist develops and offers limited partnerships in real estate investments to individuals with limited funds to invest. This service is valuable both to the real estate industry, by generating capital for expanding the industry, and to the individual investor, by providing an opportunity to invest in large properties without becoming involved in the management of them or being exposed to unlimited liability for the investment.
Real Estate Research:
Trained real estate researchers and economists are not plentiful because of the extensive technical training in business and economics required to do the job. Research is done in two major areas: (1) physical--that is, how to improve buildings and structures, and (2) economic--that is, compiling data for future planning, such as demand for new homes, changes in financing and interest rates, and the effects of urban planning. Precise information on land use, urban environmental patterns, and market trends is much needed by business and government, and many government opportunities exist in real estate research today.
The work of the mortgage financing specialist is to bring together borrowers and lenders. Finding sources of investment money such as insurance companies, banks, and other financial institutions for borrowers is half of the service that mortgage financing specialists provide. The other half is finding good investment properties for lenders and providing them with detailed information about the properties.
A mortgage broker's only job is to place the loan; a mortgage banker both places and services loans, collecting payments and seeing that taxes and insurance are paid and the property is maintained. Real estate financing specialists find a variety of employment opportunities with both lending institutions and real estate firms.
Competition and reorganization characterize both the insurance and real estate industries. Huge financial conglomerates offering every type of financial service- including banking, brokerage, real estate, and insurance-are the way of the future. Given new packaging schemes, the role of the corporate real estate professional is expanding to include more complex property management functions.
On the other hand, many small, local brokers are affiliating with franchise firms and large corporate structures because they feel a need for national identification. National identity is increasingly more important because of the fast-growing number of Americans who move between cities each year. This movement has given birth to a new industry-the relocation business. The relocation industry uses a network of affiliated brokers who buy and sell homes for transferred employees. The brokers pay a fee to the relocation firm, a percentage of the commission.
The real estate industry is seeing the emergence of the "smart" building and new marketing techniques. John Naisbitt reports on the multitenant mega structures offering computerized operating and monitoring systems, shared telecommunications systems, and sophisticated environments designed to maximize productivity and comfort. Video marketing via telecommunications systems allows clients to view properties without traveling.
Technology has changed the insurance agent's marketing strategies as well. Agents use portable computers instead of rate books to analyze actuarial data, provide instant illustrations, and produce printed output. Computers have allowed the agent to be even more detached from the office.
Throughout the insurance industry, changes in both the type and number of product offerings can be seen. The increase in the number of older Americans is creating a demand for more home care plans, retirement home options, and cooperative arrangements between government and insurance companies. Insurers operating managed-care networks are best positioned to take advantage of this situation. Another factor affecting the offerings in the life and health area is rising health costs at a time when cancer and AIDS cases are increasing. In the property/casualty area, new insurance policies are being written to protect against skyjacking, inept securities brokers, and other areas not clearly covered by traditional policies. To compete in the financial services market, insurance companies are offering more tax-related products such as single-premium life insurance and second-to-die life insurance to enable heirs to pay estate taxes. They are offering more services such as financial counseling and estate planning. With this diversification of products and services come many new job opportunities.
According to experts, there will be fewer jobs in the insurance industry, but greater opportunities for professional development. They suggest that specialized financial and investment skills are the most sought after by property/casualty insurers. In general, the insurance industry is relatively stable, fairly immune to the ups and downs of the economic cycle. Most people regard insurance as a necessity. Many of the openings will be to replace those who leave the profession. Approximately 30 percent of agents and brokers are self-employed. Small independent agencies have been behind efforts to attract young people into the agency business and to establish task forces to develop urban opportunities and minority agents. Robert Fuller, one of the 10 percent of insurance agents who go out on their own each year, began Fuller Investments, which specializes in estate planning, annuities, and life insurance. Agents with expertise in a wide range of insurance products and in financial services are likely to find the most opportunities in this competitive and turbulent climate.
Growth in employment of underwriters is also predicted to be slower than average. Two factors contributing to this are a trend toward self-insurance on the part of some companies and new underwriting software. Those specializing in group underwriting may find more opportunities as this area is expanding. But in this tight employment market, those who are highly specialized may find it difficult to find a comparable position if they are laid off.
Even actuaries are looking at stiff competition and slower-than-average employment growth. The Bureau of Labor statistics predicts the number of actuaries to increase 4 percent. Most actuaries are employed by life insurance companies. As these companies streamline operations or merge with other companies, they may decrease in-house actuarial positions, opting instead for consulting actuaries. This trend toward outsourcing is pervading many company operations throughout all industries.
Unlike the insurance industry, the real estate industry is inextricably linked to the U.S. economy, which runs in cycles from weak to peak periods. Despite the current strong economy, the number of first-time home buyers is decreasing. The baby boomers, however, have higher incomes and can afford to spend more on homes. U.S. Bureau of Labor statistics predict slower-than-average growth, approximately 9 percent, in real estate sales and appraiser positions. This growth will come from home purchases and rental units. Though jobs will be available, the best-trained and most ambitious workers are the ones who will survive in this competitive environment. Knowledge of the new technologies is required for success in the real estate field.
One area of employment projected to grow as fast as average, 14 percent, is property and real estate management. Increases in office and retail space, as well as in apartments and houses, will create these new positions. Professional management will be needed by the growing number of communities with jointly owned common areas such as condominium complexes. The older population will seek out managed retirement communities and assisted-living arrangements.
Like the insurance industry, there is high turnover and failure among beginning salespeople. Generally, women and minorities have been widely involved in the real estate industry. Various industry studies have shown that neither sex. age, nor race have any bearing on job performance. In insurance, women leaders like Cecilia E. Norat, Insurance Woman of the Year for 1996, show others how it is done. Starting in the mail room of Commercial Union Insurance Co. over thirty years ago, she has held numerous positions in the insurance industry including executive director of the New York State Insurance Fund and most recently, president of the AIG Vendor Services unit of AIG Insurance Services Inc. Throughout her career, she has actively promoted women and minorities in the industry. Some aptitudes and attributes that do have an effect on job performance in both insurance and real estate are explored in the following section.