[Via this week’s carnival of real estate] Silicon Valley Blogger posts on the number of agents in Silicon Valley. And specifically his dry cleaning guy getting into the real estate game.

The statistic: 16,000 homes sold this year so far in Silicon Valley, 26,000 agents.

The math to get to $21k is a little wrong: he assumes half are active but not that there are two agents involved in a single transaction (i.e. one representing buyer, one representing seller), that is they are more likely grossing $42,000. But his point around the splits to the brokerage and associated fees are spot on.

Half the agents being active might be generous. We took a look at the market activity in Hawaii recently and found that 87% of agents were not representing a home owner on the sell side in September. If we generously assume there is another 13% out there helping the buy side (usually agents help home owners buy and sell so we’d assume the ones representing home sellers are doing most of the buy side representation as well but being generous), then roughly three out of four people would be inactive, not one in two.

In the stock market, the saying goes ‘when your shoe shine boy is offering stock tips, it’s time to get out’. Perhaps the same is true in real estate when you dry cleaner is entering the game?