Lots of people, including me, are scratching their heads; what is going on in the real estate market? Recently I asked more than a dozen people as to their assessment of the current market. These were licensees, lenders, title reps and 2 home warranty reps. Here are their answers.

 

            “Worst market I have seen in my 23 years”

 

            “Feels like we are heading for a crash”

 

            “While it is a tougher market, there is plenty of business to be had”

 

            “The market has forced me to change my approach, and that has helped”

 

And a few comments like the above.

 

So, where are we? Failing? Steady? Or improving?

 

Remember the saying “one person’s garbage is the next person’s gold”!

 

All external metrics should point to a better market. But the market is resisting improvement and is settling for a steady market that has signs that are difficult to interpret.

 

It is mostly a matter of perspective and willingness to embrace and/or make changes.

 

What worked a few years ago might not work now. Tools that are rapidly changing can have either a wildly positive impact on your business or be a disrupter and keep your attention on the downside.

 

This author has been in real estate for 43 years, since early 1981. In the early 1980’s, interest rates hovered around 13%-15% for a 30-year mortgage. One would have expected the market to crash as a result, yet it did not. Yes, it retracted for a period, around 4-5 years, until rates fell below 10%.

 

But we sold a lot of homes during that time, just by recognizing what impact that had, and adjusting our marketing, our interactions with clients, and our promotion of the market. While many agents failed and found other employment, those that stuck around, made some changes, and changed their attitude a bit, had many sales and made good money.

 

Some of the tools we have now used for 10-15 years might be the albatross around our necks. Technology, advertising, and interactions with different cultures and people are very different today compared to what it looked like even 7 or 8 years ago.

 

Every market creates challenges. Surviving and thriving in a changing market is not as hard as it seems.

 

In the early 1980’s, as stated earlier, interests rates were in the mid-teens, but we overcame that challenge.

 

In the late 1980’s, the market shifted when the S&Ls (Savings & Loans) crashed and fell like dominoes. We all had to deal with the RTC (Resolution Trust Corporation) that gathered all the real estate assets that the failed banks loaned on and had us list and sell them. True, many were commercial properties, but there were plenty of residential properties, as well.

 

Late 1980’s- early 1990’s, two more fair housing requirements were added, we changed our MLS and lockbox system, we had a new purchase contract, and we started to feel the impact of a lawsuit in Minnesota that had national impact, which changed how we disclose and deliver agency.

 

A few short years later, the need to disclose material matters resulted in the AAR SPDS and a sprouting industry; inspectors. That added a few extra steps to our process of listing and selling, so we had to adjust for that.

 

Soon after 9/11, the market retracted significantly, as all acting partners in the industry felt uncertain of the safety of our country and the resulting wars that commenced. Everyone took a step or two back, until the feeling of uncertainty faded.

 

But, a few years later, in 2008, in what seemed to be a matter of days, the stock market crashed, financial institutions that owned billions in mortgage-backed securities failed, plunging the world economy on the brink of collapse. Home values plummeted, 401k’s evaporated, and the housing crisis created challenges never seen before. And we survived.

 

As a result, the country fell into a recession, bordering on a 1929-type depression. We overcame that, dealing with defaults, short sales and rampant bankruptcies.

 

Industry-wide changes notwithstanding, external forces dictate our markets. Jobs reports, inflation, CPI changes, recessions, Fed rate changes, policy changes based on politics all have positive or negative impacts on our markets.

 

Most recently, March of 2020, when we all realized that a world-wide pandemic was upon us, every industry in the country (and world) suffered, with fellow citizens dying at the rate of tens of thousands a day, businesses closed, and again, we were in a recession.

 

Summary: The real estate market has always been on a roller coaster, up and down based on a myriad of challenges. Most of those forces we did not create, cause, or change. Change is part of the cycle. Spend enough time in the industry and you will experience this.

 

Yes, there are external forces, such as interest rates in the 7’s, debt ceiling uncertainty, election season approaching (or is it here already?), a Dow Industrial Average that is clearly on a roller coaster and waiting with bated breath for any Fed announcement.

 

HOWEVER, during all this and in any cycle, people need housing. That could be a rental, but even a rental today could turn into a sale next year. Shelter is a basic, essential human need, on the Maslow’s Hierarchy of Needs. As the human race increases in population, there will always be an increasing pool of clients in need of living space. And living spaces are rapidly changing, as we experience an affordable housing crisis.

 

Identify what worked a few years ago but seems not to be working now. Assess what you need to do to gather more clients, maybe going back to basics, or embracing a new technology that will improve your prospecting.

 

Bury your head and resist change, and you most assuredly will struggle.

 

Open your eyes and embrace change, and your business will soar.