After a historic run, the real estate market pendulum is showing signs of turning.
Many of the latest real estate headlines show signs of a slow down. Executives at large brokerages are making moves that indicate that they believe leaner times are ahead such as selling off their company's stock, reducing staff, eliminating perks, and similar cost-cutting measures.
Experts on every side have an opinion on what is going to happen to the housing market. Some predict an outright crash while others predict flat or moderate income in prices.
There both have valid arguments. With inflation at a 40-year high and the constant printing of money, how can prices go down? With housing affordability at a 32-year low, how can prices continue to climb? The explanations for their predictions go on and on.
So, which side is right?
No one knows.
Should you be concerned?
Yes, but it mostly depends on the strength of your current business.
Answer this question honestly - did your income increase because you improved your skills and built a better business or were you simply riding the recent real estate wave?
If you were mostly just taking orders and riding the wave then you have some work to do.
Frankly, I welcome this current market as we are heading back to normal. If you tried to represent a buyer earlier in the year then you know exactly what I am talking about.
Keep in mind, the number of REALTORS® has ballooned with more licensed agents in America than ever -1.57 million- which is 13% more than in 2006 when the housing bubble was at its peak. There are more agents today than listings which means somebody is missing out - a lot of somebodies are missing out. Interestingly, the vast majority of agents are newer with more than 80% having never seen sustained interest rates above 5%.
Don’t be surprised to see many agents and companies exiting. There have been a lot of recent entrants into the market with agents and new brokerages who got in with the idea of quickly getting rich. Most have only known a seller’s market, and their world is changing.
As the pendulum continues to swing, one thing I’m personally looking forward to is watching a lot fewer agents posting brag videos of themselves all over social media doing the “happy dance” because their listing sold in twenty minutes at 100% above the asking price with twenty-seven offers. They’ll find their world is becoming a very different place.
So, what do we need to do to survive this real estate market shift?
That is a topic for another blog post. Stay tuned!
Marc Rasmussen
Broker/Owner of Corcoran Dwellings