The housing market has really changed and it’s not an easy time to work in real estate. I know people in all areas of the profession who are struggling and wondering how to make things work. So, I wanted to share a point of view to hopefully provide some encouragement. This message is sort of a combination of market trends and mood. Hope this helps.
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01/18/23 WCR Market Update at Cameron Park (details TBD)
01/19/23 Important market update at SAR on Zoom (details TBD)
1/23/23 Residential RoundUP (sign up here (free))
THE BIG TRUTH
The reality is that we are in the midst of change and there is pain ahead of us. But the market will realize it. Bottom line. And we can’t control what the market does, but we can control our response to the market.
IDEAS FOR SUCCESS IN A NEW MARKET
And now some encouragement. Or maybe it’s unsolicited advice. You decide.
– Work harder than ever.
– Tighten your finances (personal and professional).
– Run to the challenge of a new market.
– Expect fewer transactions on your desktop as fewer transactions occur.
– Plan to earn less money (and be grateful if you do more).
– Agree that not everything is perfect.
– Strategize how you need to diversify your business.
– Focus on building relationships and serving your network. If your network is small, it’s time to increase its size.
– Make a plan and work on it. Be consistent in everything you do.
– Plant seeds today that may not germinate for a few years.
– Expect more NOs before you get to YES.
– Being obsessed with understanding who the buyers and sellers are today. Whenever you hear of a sale, ask the following question: Why did the seller sell? Why did the buyer buy? This gives clues to who is playing the game right now.
– Know the stats better than anyone.
– Take your mental health seriously.
– Stop the 24/7 housing market doomscrolling (seriously).
– Find things outside of work that give you life and do those things.
– If you don’t have a hobby, it’s time to find or revive one.
WRITE A “DEAR DOWNTURN” LETTER
I know, that sounds corny. I heard this idea from someone (Tom Ferry?). I wrote myself a letter called “Dear Downturn”. In my letter, I lay out a plan for how I will succeed in a down market. If it can work for you, go for it. Be as practical as possible about what you will do to position yourself for success. My letter includes things like writing a weekly post, eating healthy, getting back to my goal weight, being a daily resource on social media, talking somewhere once a week, riding a few longboards, reducing my spin time to X number days … Here is the beginning of my letter:
First of all, I’m not happy you’re here, but I was expecting you. And I’m ready to take you on. This is how I will conquer you.
I just did this podcast. Check it out if you want. I think it goes well with this post because it is about market trends without sensationalism.
CHOOSING HAPPINESS IN A FALLING MARKET:
It’s easy to feel good about life when business is booming, but when the going gets tough or the phone stops ringing, that’s when we really find out what we’re made of. Here are the sobering questions I ask myself. Will I only be happy in a bull market? Or is it possible to have joy and contentment during a down cycle? I have to think it’s possible, but it won’t happen by accident either. It’s time to get intentional.
MARKET CYCLES AND CONCERNS
Often when the market declines, it’s a good five or six years of decline. It may seem daunting, but it takes time for a cycle to adjust. The verdict has not yet been given on the duration of the market correction, so we are not locked into a timetable. Of course, this looks like a game hosted by the Fed right now, so we’ll see what they do. I bring this up because if I’m lucky enough to live thirty more years, and we have two more down cycles in those decades, it’s possible that prices will go down for more than a decade of my life. This is an important point of view. Am I going to be full of worry when the market is “bad” and only full of joy when it is “good”? By the way, if this ends up being a typical cycle, remember the market does not dive for the entire period. There may be portions of steep and slower decline. It is not a single speed for the whole cycle.
WINNING IN A FALLING MARKET
People buy and sell real estate in all types of markets. In a bear market, especially at the beginning, this is when we see the greatest exodus of buyers because prices and uncertainty are too high. Now, about 40% of the market has gone lately in Sacramento, which also means 60% of the market has happened. My advice? Focus on being part of what is happening rather than focusing on what is missing. Also, some people who bought in 2008 and 2009 ended up winning big after the market bounced back. Technically, prices went down for another three to four years, but these buyers ended up being big winners when the market rallied. I mention this because it’s a good reminder that timing a bottom isn’t easy to do, nor is it necessary in all cases. I think sometimes people focus so much on geeky price metrics without giving enough weight to their lifestyle. Where do you want to live? Who do you want to spend your life with? What does your lifestyle require? Look, buy or don’t buy, but think about prices and your lifestyle when making your decision. No pressure from me.
1) YOU DON’T NEED TO BE ULTRA-POSITIVE:
If you are tempted to say only positive things about the housing market, ask yourself why. Some real estate professionals think they need to stay positive, so it can be hard to know what to say when there’s no longer a bright honeymoon market. Now is the time to be realistic with what is happening. It’s a season for buyers, so it’s time to let go of a seller-driven narrative that focuses heavily on rising prices. It’s time to focus on lifestyle-changing buyers and sellers. What do buyers need to hear right now? What do sellers need to hear? Focus on that. If you’re the expert, let people know exactly what’s out there. Tell the story of the market and help people find ways to participate. Get rid of clichés and don’t promise everything will be fine (it’s not a promise you can keep).
2) ACCEPT THE STATISTICS, BUT DON’T EXPECT NEGATIVITY:
It’s difficult. Some agent friends have even told me that it’s hard to see some of my stats right now. My goal is always objectivity, but sometimes I feel like I’m swimming in a pool of negativity since the stats show falling prices and falling volumes. But that’s where we are. If our market is going to decline for the foreseeable future, it’s time to embrace this new season and not worry about it. It’s like that. I’m not trying to be flippant about the struggle, but either we can be defined by worry or we can find a way to embrace this next season of life and business. My advice is to know the stats extremely well so you can clearly articulate what the market is doing, but don’t let statistics affect your mood. There has to be a way to embrace a downtrend without becoming the trend or being sucked into a negative spiral.
3) FOLLOW & DO NOT FOLLOW:
Choose carefully who you follow right now. Listen to objectivity and cultivate objectivity in your life. That’s what matters most. On that note, unsubscribe from people spouting sensationalism. You can stop listening to or following people if it’s too much for your sanity. And to be blatant, if my content seems too much to you right now, take a break from my weekly post, hide from me on social media, or unsubscribe. Take care of yourself (but please don’t live in denial).
Hope this was helpful. Just a few things in my head. Lots of love,
MARKET STATISTICS: I will have lots of market stats this week on my social media so watch TwitterInstagram, LinkedIn and Facebook.
Thanks to be here.
Questions: What stands out to you higher? What did I miss? Any advice for real estate professionals right now? I would like to hear your point of view.
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