Sharp declines in enrollment at real estate licensing and contractor's exam schools in Reno and Carson City have owners slashing prices and adding new avenues of business to keep revenues flowing.
Herb Bottomley, owner of Avalon Real Estate School in Reno, says business is down about 70 percent from the peak of 2005, and enrollment has declined from roughly 60 to 20 students per month for real estate pre-licensing courses.
"It's been going down gradually, and every year it gets a little worse," says Bottomley.
Sharon Green, co-owner of Pioneer Real Estate School in Carson City with business partner Evelyn Murphy, says enrollment is down to just three or four students each month. The duo have run the school since the early 1990s, and classes of 25 to 30 students weren't uncommon prior to the construction and real estate downturn.
"Not too many people at this time are making the decision to get their real estate license," Green says.
Schools that provide training to contractors have experienced similar declines. Enrollment at Contractors License Information Service on South Meadows Boulevard has plummeted by approximately 75 percent since 2005-06, says owner Mike Lapre.
And though Contractors Exam Center on East Plumb Lane has experienced a dip in overall enrollment, especially for general building contractors, that decline has been offset from contractors throughout the Truckee Meadows pursing licensing in neighboring California and Arizona in order to chase work in those states, says Director Lisa Rogers.
The overall number of licensed contractors in the state dipped 22 percent from July 2008 to July 2011 the State Board of Contractors reports, while the number of licensed real estate brokers, salespersons and broker-salesperson declined 22 percent from January 2008 through July 2011, the Nevada Division of Real Estate finds.
Due to the reduction in volume, owners of schools that provide licensing for real estate brokers and contractors have begun shaving their costs in order to gain new students, and many have also branched out into ancillary services such as continuing education.
Pioneer School of Real Estate in Carson City provides continuing education for licensed Realtors, who need 24 hours of continuing education every two years to renew their licenses, Green says. The school also has begun offering one-day classes on home loan modification requirements in order to boost revenues.
To better control costs, Green and Murphy downsized the school by taking space in a smaller location that better fits current class sizes. They also are bilingual in Spanish, which helps draw additional clientele, Green says.
Bottomley of Avalon Real Estate School says prospective students are doing a lot more price shopping between local schools and Internet offerings. He's thinking of knocking off nearly a quarter of the price from his course in order to gain more market share.
"We can start having price wars and having higher volume, maybe that would improve things," Bottomley says. "I have always kept things low, but if I knock another $60 off or so it might create an influx. I will lose a lot of profit, but if I can do more volume maybe that would make a difference."
Bottomley also is considering expanding his course offerings to provide continuing education and other instruction in order to have more ammunition, he says.
Lapre of Contractors License Information Service says the exam center has increased its direct-mail marketing and slashed pricing to attract new clients, but traffic through the doors still remains light. Executive of the company also work in insurance and surety professionals, however, which has provided stability to the business.
Rogers of Contractors Exam Center says in addition to an uptick in licensing for neighboring states, many contractors in the Truckee Meadows are adding to their current licenses in an effort to bid on more work. For instance, Rogers says, landscaping contractors are pursuing licensing for concrete work or paver installation, and general contractors are getting licenses for plumbing and electrical work so they don't have to use subcontractors.
"A lot of people are adding classifications so that they carry more licensing so they don't have to turn down any type of work," Rogers says. Repeat business also has helped Contractors Exam Center weather the downturn. Many of the tradesmen pursing new or additional licenses are past customers, Rogers says. Return students always are offered a discount in order to drive revenues, she adds.
Part of the reason general builders have experienced a decline, Rogers notes, is because of greater oversight from the State Contractors Board, which has placed more emphasis on financial responsibility in order to better protect consumers.
"The board has gotten a lot stricter on who they license, and that has been challenge," Rogers says. "The board looks at bank accounts, credit and fingerprinting, and if you have any current arrests or unpaid past-due debt it will be an issue. It's not a denial, but it is an issue."
LICENSED REAL ESTATE BROKERS/SALESPERSONS/BROKER-SALES
Carson City July 2011 226 active 85 inactive
Carson City Jan. 2008 281 active 152 inactive
Carson City June 2004 349 active 73 inactive