Considering the recent housing boom, surely real estate agents are making a fortune these days—and are the people with the greatest job prospects.

Not quite, if we are to believe the Freakonomics authors Steven Levitt and Stephen Dubner. The writers, who in their 2005 bestseller suggested that real estate agents sell their own houses for much more money than their clients, have been digging deeper into the topic for a special real estate edition of the Times Magazine.

They discovered two truths: First, even in a roaring housing market, the average real estate agent makes much less money than the rest of us may think. And second, thanks to certain online innovations, real estate agents may well be on the endangered-species list.

A typical agent has only four functions, Levitt and Dubner point out: Setting the price of a house, finding prospective buyers, cleaning up and showing the home and dealing with negotiations and contracts. Putting a value of $100 per hour on those tasks and assuming that all of them combined take about 40 hours to do, plus $750 for listing the property, we end up with $4,750. Thats what the agent should make. What he actually does make on, say, a $500,000 house is $15,000—more than three times the calculated amount. Easy money, right?

Heres the catch, say the authors: During a housing boom, so many people are flocking to the free entry real estate professions that the potential benefits are being canceled out.

In the last ten years alone, membership in the National Association of Realtors has skyrocketed by more than 75%. Levitt and Dubner state that From 2002 to 2004, during one of the hottest real-estate markets in American history, the median income for Realtors actually fell—to $49,300 from $52,200.

And according to a 2003 study by two UC Berkeley economists, agents making a bigger buck by selling real estate in highly desirable locations have to deal with much more competition than their counterparts in other places, which basically results in a wash. As an example, in 1990 Boston Realtors sold houses for twice the price (and, of course, twice the commission) than Realtors in Minneapolis—but the Minnesotans sold twice as many.

And then theres the Internet, the downfall of various traditional vocations. Think of travel agents and stock brokers, which have been all but wiped out by book-it-yourself websites and online brokerages. Real estate agents may not fare much better in the long run.

Sites like www.zillow.com. www.redfin.com. www.craigslist.com. www.ziprealty.com. www.homethinking.com are drawing more and more potential home sellers and buyers, essentially taking over the job of an agent. As this kind of service becomes more popular, say the authors, it is hard to imagine that the market will allow Realtors to maintain their hefty commissions.

Of course there will always be the few successful high-end Realtors, as well as the thriving travel counselors and financial planning specialists. However, the real estate masses may soon have to find another source of income. or start a fee-for-service business like Cary and Barbara Chubin.

After resettling from Chicago to Oakland, the Chubins are now charging separately for each of their services—$750 for a listing, $50/hr. for showing a house, and $250 for negotiations. People cant believe it could be so much cheaper than theyre used to paying, Cary Chubin told Levitt and Dubner. A perfect example of how a free market regulates itself.

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