What Do We 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. Abe defines “shift,” or correction, as a slight change of position, direction, or tendency. A shift shouldn’t be equated to a market “crash.”
A shift shouldn’t be a cause of concern in itself. In fact, a shift can even bring benefits to an agent.
So, what do we do if the real estate market starts to shift? Discover the current state of the real estate market and how agents should react if there’s a market shift.
"I'm starting to hear agents get concerned. I'm hearing agents worrying ... a shift could be a slight change, not a crash, but just with a slight change, agents get worried. --And I think when agents get worried, How they respond to that determines whether or not their personal business crashes. So it's not necessarily the shift ... it's the reaction to the shift that could have negative results to an individual agent. In the same shifting community or market on agent could be accelerating, and one agent could be falling backward. " Greg Harrelson.
Current State of the Real Estate Market
"A shift is a slight change in position, direction, or tendency." - Abe Safa.
Abe begins the discussion by distinguishing and defining appreciating and depreciating markets. When a particular market rises in value. The latter, 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 15th. If this trend continues, then it’s a clear sign that a market shift is happening.
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:
An opportunity to Set Yourself Apart
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. 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.
Bring Certainty to the Consumer
“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.
3 Things We Do If the Market Shifts
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. Don’t sit and fret 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.