Real estate is tangible. It's a piece of land and any building or structures on it, as well as the air above and the ground below. Everyone comes into direct contact with real estate. The places we live, work, vacation, shop and exercise are all assets to be bought, sold and rented. And it's always been an important element of the economy. Today, the real estate industry is considered one of the most dynamic and healthy sectors in the American economy -- people may divest their stocks, but they always need a place to buy groceries and lay their head at night.

Market data

As of 2004, the real estate business employs close to five million people. While a select few earn a staggering amount of money, the median annual income of a real estate broker, including commissions, is $35,670, according to the Bureau of Labor Statistics (BLS). Those who work in this sector often enjoy greater flexibility in job responsibilities than in other industries. Drawbacks include low-paying entry-level positions, competitive co-workers and long hours when starting out. Furthermore, once you are established in an area, relocation can be detrimental to your career, as this industry is often geographically specific.

The real estate sector is largely dependent on a number of economic factors; small shifts can turn trends significantly. For example, the technology industry boom certainly helped the real estate industry in Silicon Valley in the 1990s. There was more demand for space -- both commercial and residential -- and as such asset values skyrocketed. The subsequent technology bust had a dramatic effect on some parts of the sector, too. Commercial real estate firms that focused on office and retail development projects found the market glutted with available space, driving prices down. Residential is also affected by economic swings, as well as the federal interest rate, which affects mortgage interest rates, and the unemployment rate, which affects both consumer confidence and buying power.

Most real estate offices are small and specialize in their immediate location. There are a few industry leaders, however: Realogy, a 2006 spin-off of Cendant, has several big names in its stable, including Sotheby's International, Corcoran, Century 21 and Coldwell Banker. The company claims it was involved in one in four real estate transactions in 2005. Realogy's competition includes RE/MAX and HomeServices. Commercial real estate firms are frequently larger and employ more brokers and salespeople than residential firms; they also may manage properties or administer real estate investment trusts (REITs). Big names in the commercial real estate field are Ryan, Duke, Opus and Bovis.

Home brokers

Residential real estate agents help buyers and sellers in the process of obtaining or getting rid of residential property. Some agents work with buyers, helping them find places to live and negotiating with sellers, while others work with the sellers. Agents rarely represent both, as this is perceived as a conflict of interest. There are close to half a million real estate brokers and agents in the U.S.

Agents are usually independent sales professionals who contract their services to sponsoring real estate brokers in exchange for a commission-sharing agreement. The commission on a home sale varies by market but is normally 5 to 6 percent of the sale price. This commission is split four ways: between the seller's agent, the buyer's agent, and the sponsoring brokers with whom each agent is associated. Many agents work solely on commission and don't get much in the way of benefits or monetary help with the overhead necessary to perform their jobs.

In order to sell real estate services, you must be a licensed professional in the state where you do business. To become a realtor, all states require a person to pass a written exam focused on real estate law and transactions and be affiliated with a broker. Most states require you to be at least 18 years old and a high school graduate, and to have completed a minimum number of classroom hours. Some states waive the classroom requirements for active attorneys or offer correspondence course credit options in lieu of the classroom hour requirement. The license fee varies, but is around $100 for the exam and $400 for the classes.

Repping the tenant

A tenant representation agent, commonly known as a "tenant rep," represents companies and other corporate clients looking to lease or buy either a portion of a property or an entire real estate asset. A large part of the job involves business development: since tenant reps are often responsible for building their own book of business, prospecting for new clients is a big part of the job. Although there's some direction by the broker and senior tenant reps in the office, for the most part tenant reps cold-call tenants or companies to drum up business.

Tenant representation is very competitive, even cutthroat, since one not only has to compete against outside reps but also those inside one's own office. In fact, some tenant rep brokers see the competition inside as being worse than outside the shops. Often there are disputes about who is entitled to chase what business -- though ultimately the senior brokers tend to win.

Property management

Real estate owners commonly employ professional property managers, either directly or through third-party management firms. Property managers are charged with the day-to-day management of real estate assets. They ensure that tenants are satisfied, the building is in good condition, rent is paid and that rents reflect market conditions. Property management provides a general introduction to real estate, as they deal with a wide variety of issues relating to leasing, construction, tenant relations and market analysis.

A good manager can save an owner a great deal of money by operating the asset efficiently and keeping the tenants happy. The property manager plays a crucial role in expense control, as the owner relies on him to manage any and all operating expenses at the building. Property management also requires good interpersonal and analytical skills because tenants sometimes can be difficult and expect things to be resolved immediately. While leasing agents do much of the lease negotiations, property managers are involved in the process as well.

Real (estate) exuberance

Real estate has been in the news lately as housing prices on both coasts and in urban areas have skyrocketed. The reasons for this are numerous: following the market crash of 2000, the Federal Reserve rolled back interest rates from 6.5 percent to 1 percent over a three-year period, and a loosening of the regulations around lending made getting money to buy a house easier than ever. The influx of cheaper money fueled the boom: housing prices on the coasts shot up 55 to 100 percent, accounting for inflation, in five years. According to an article in BusinessWeek, in the first half of 2005, real estate accounted for 50 percent of the growth of the GDP; in less overheated markets it usually accounts for a tenth of that amount. The market looks to be cooling off, however: the National Association of Realtors said residential sales were down nearly 9 percent in June 2006 as compared to a year before, and that prices were beginning to plateau.

Job outlook

Despite rumors of a cooling market, the BLS predicts that over the next 10 years the demand for brokers and sales agents will increase between 9 and 17 percent. A growing population will also result in a steadily increasing demand for housing. There is relatively high turnover in the industry, which results in a fairly steady demand for new entrants. Impediments to growth include the increased use of the Internet, which allows people to search for properties that suit their criteria without consulting a professional (much like in the tourism industry with travel agents). The industry is very sensitive to fluctuations in interest rates and to the economy's overall health, and demand for employees can drop precipitously in the face of a sluggish economy or high interest rates.