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What To Do If The Real Estate Market Starts To Shift?
A shift in the market may start to worry real estate agents. For one, it can affect their commission rates. Secondly, it can lead to their clients losing interest in a property.
In this episode, Abe and Greg examined what it really means when the market shifts. As a start, Abe defines “shift,” or correction, as a slight change of position, direction, or tendency. Hence, a shift shouldn’t be equated to a market “crash.” Both believe that a shift shouldn’t be a cause of concern in itself. In fact, a shift can even bring benefits to an agent.
Bringing Certainty to the Consumer
Setting Yourself Apart
Current State of the Real Estate Market
“The real estate market has been on fire for about two years now.” - Abe
Abe begins the discussion by distinguishing and defining appreciating and depreciating markets. The former refers to when a particular market rises in value. The latter, meanwhile, is when the market’s value falls.
When a market appreciates, the first market that’ll rise is single-family homes, as it’s more in demand. The second to rise will be condos on “golf courses” or those that are located in a hot area. Then, the final wave of appreciation will affect those that are less in demand or desirable. Even if they’re not in demand, these properties will still be pushed by the market.
In light of the current state of the real estate market, Abe reports that there has been a noticeable and significant appreciation on oceanfront condominiums since April 15. If this trend continues, then it’s a clear sign that a market shift is happening.
3 Things We Do If The Market Shifts:
What If There Is a Market Shift?
An agent’s reaction to market shifts will determine the outcome of their business. So, if ever there’s a market shift, real estate agents should focus on the following things.
Mindset Shift
A mindset shift begins by not panicking or worrying. In fact, some agents/corporations attribute their success to when the market is down. This means that there’s actually an opportunity for grabs when the market is down. Thus, a shift in the market doesn’t necessarily mean that your business will go down, too.
Greg highlights some effects of a changing market:
- You gain market share in a declining market
- You fight to maintain market share in an increasing market.
- The majority of agents lose market share in a hot market since there are a lot of licensees that get into the business.
Shift Conversations
“Approximately 6 million houses are sold every year.” - Abe
With knowledge and real data, you don’t have to worry about what the media presents. Having actual data is important since consumers, who are not experts in the field, need certainty. This means they need to rely on people like you who know the facts.
Greg presents two tips when talking to a client during market shifts.
- Future pacing: Assure clients that you’re constantly monitoring the market.
- Blame the market: Don’t tell them to change the price without data. In other words, act as an interpreter of the shift, then inform them that the price is suited for the current market shift.
Increase Activities
This involves tracking your numbers, like conversions and ratios. After getting the number, increase your amount of activity/lead generation by 25%. This way, your business can survive despite market shifts.
You can’t control the real estate market or the economy. Hence, don’t sit and whine about the market shifting. Instead, capitalize on what’s going to change and when it’ll change. By doing so, your real estate business will still grow.
