Reminder that I’m away this week…this post originally appeared June 26th of last year but the same holds true today.
Everywhere you go in the online real estate world, there’s something about cooling markets, normalization, air coming out of bubbles… whatever you want to call it. Like this, for instance.
Even those who have been most steadfast (insisting through cheesey grins that for the better part of a decade that it has always been an amazing time to buy) are finally starting to acknowledge the market isn’t white-hot any more.
What about all those people who bought at high prices in the last few months, convinced the market was strong and getting stronger? What about those who didn’t sell in the still-strong market last fall? What about those who paid top dollar for condominiums that they haven’t even moved into yet, and might not be worth as much today?
Those are the people who might have been better served by less cheerleading and more honesty.
As part of my regular marketing campaign, I send out postcards and e-postcards with specific market information and predictions. Some of my colleagues hate it–and you’d better believe they complain.
Last September, I sent out a postcard that asked “Are You Prepared for a Falling Real Estate Market?” and continued with five very important questions for sellers–questioning their mortgage product, whether or not they were too heavily leveraged in real estate, and more.
The wrath came down big time. I was told by my friends in the industry at competing firms that their offices were littered with my postcards and the sentiment across the industry was that I should be silenced. My manager even received an irate call from a competing firm’s manager demanding that I cease mailing these postcards.
The real estate market, at that time, was essentially a big ATM for brokers and agents. It was a big machine that spat out money, and nobody wanted that to change. The idea that the market might cool down at some point was scary to all those counting on the party lasting forever.
But we all knew it wouldn’t last forever. My thought is that if I could be the open-minded one, the one not blinded by the cash, the one to correctly advise my clients when the foot would be easing off the accelerator, then my clients would have an advantage, and they’d thank me in the long run with repeat business and referrals.
My timing looks prophetic now–hardly anyone was talking about a slowdown then (when there was still time to take meaningful action in a strong market) and now everyone is–but it wasn’t the result of any economics genius. I only looked at the same basic market data that everyone else sees, stuff like inventory, time on market, interest rates, attendance at open houses, etc., and called it like I saw it. I guess a lot of my competitors just didn’t want to see it.
I believe new internet tools and other market forces are shifting the industry so that more and more brokers will have to earn their keep not as a gateway to listings, but as a trusted advisers. Guides through the jungle if you will. That is an important job, and one that I take very seriously. As the real estate industry evolves, so too will the real estate professional. A more realistic approach to market conditions, combined with a more honesty in sales (that is not an oxymoron), will make for a more efficient and sophisticated real estate market that is long overdue for an overhaul. If we do this right, our clients will love us for it–and when your clients love you, you’re always in a strong position.
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