Will there ever be a time where even the small suburbs and towns become highly competitive because everyone and their mom wants to do local seo?
Or does this stuff all balance out as businesses crop up in new areas, other businesses leave town, and new industries develop (creating new types of clients for SEOs)?
Local SEO will always be a viable trade because businesses fail so frequently. There will always be a "new kid on the block" looking to compete with bigger and more established businesses, and Local SEO will be the only way in which a skilled and motivated small business owner can have a chance at getting a piece of the local market away from an established business.Also, given that most vendors of Local SEO are ignorant and dishonest scammers, anyone that actually knows what they are doing will also be in demand.
A lot of people here are saying it is saturated. Nonsense.
Only in the narrowest of senses is that *
maybe* true, but look around! How many local businesses have crappy websites, poor performance on search, mishandling or not handling reviews, etc.?
If all you want to do is sit at home, do some email marketing, do some remote SEO work, and rarely meet or talk to a client (astonishingly, read some posts here where SEOers think that is a good thing), then, yes, opportunities are thinning significantly. I don't think you have to be ignorant or dishonest even, but just poor customer service will do you in.
Instead, a way to think about it is like lawyers or accountants. Some are large operations, others are small operations. But, there are many offices around. Does every law or business student going through college worry that the market is "saturated"? No.
It doesn't have to be that businesses fail that opens the door for opportunity, though that is certainly part of a healthy, dynamic, and growing economy. In such conditions, it is not a zero sum game, but there is room to grow.
Like law and accounting, a good part of the service is relationship and trust over the long term, along with positive results. But, like every business, you have to also differentiate yourself to close the deal.