Advice for Real Estate Agents in a Shifting Market

I don't know about you, but the last few months have been very emotionally activating for me as a real estate agent in her 18th year in the business. The layoffs. Mortgage lenders switching companies left and right. Real estate industry economists breathlessly reassuring us that everything is going to be fine. I'm sure I'm not the only agent who lived through the 2008 Housing Crash who is processing some emotions in therapy lately!

By far the worst part of entering this new territory is talking to real estate agent friends and colleagues who've never experienced a shifting market or a downturn. "It's a good thing," they say. "There's too many real estate agents and this will get the bad ones out of the business."

Oh, sweet summer child.

Good people will be forced out of the business

Flashback to the summer of 2007. Before Lehman but after Bear Stearns. Talking to my work bff and mentor who'd been in real estate 10 years longer than I. We were CACKLING. We couldn't wait till for all of the crappy agents to get out when the market was dropping. Four years later home prices in our county had lost 31% of their value. We had the highest rate of foreclosure in the state. Many of our friends, fellow agents, and clients had lost their homes entirely. And my work bff? He left real estate forever and got a job.

The truth is, in a shifting market, the agents who survive aren't always just the good ones. They're the ones with a pension. The ones with a spouse with a regular income. Plenty of the people who remain do it through grit, determination, and hard work- sure. But make no mistake, some hardworking agents won't make it.

Advice: Be humble, work hard, and help your friends. As Jay Thompson (formerly of Zillow) said in a recent Inman Article, "Stop Rejoicing Over Industry Layoffs." As the market shifts and transactions change your real estate friends and colleagues will be a huge part of your support network. For many of us in the last downturn the advice and support of our fellow real estate agents (even our direct competitors) made the difference in whether we made it or not. Pull together.

No one knows what's happening

"The problem is, we're always preparing for the last real estate down market," said my first managing broker. He's been in the business since 1978, before I was even born, so he's seen a few. "But each one comes at us differently." In 2007, we were watching interest rates, because that's what messed things up in the 80's. In 2022, we're watching interest rates sure, but we're reassuring ourselves and everyone that "People have equity! They didn't get bad loans!"

Real estate industry economists are generally rosy and relentlessly optimistic in their predictions and assessments. Many news articles pump out quotes from the economists for various real estate companies and NAR. These industry economists who work directly for the industry were famously off base and overly rosy during the housing crash in 2008. For this reason I take their perspectives with a grain of salt and tune in more closely to economists outside the more optimistic real estate agent industry echo chamber. Exceptions would be the economists for Redfin and Zillow, who never seem to mind sharing bad news.

In addition to the devastating impact of (necessary) rate increases on housing affordability, the unsettling war drums in Europe, and the climate crisis becoming undeniable in every single region of the country- Berkshire Hathaway said in their annual meeting that they are hoarding cash so that they're “in a position to operate if the economy stops.” Excuse me, what? I do not understand how anyone who digs around in the pressures the housing market and economy in general are facing right now could claim to know what will happen next. We are in uncharted waters.

Advice: Keep up on what's happening and find sources outside the bubble of the real estate industry. It's important to be informed, but we also need to be prepared. Make sure you're on top of your expenses. Expenses should be supporting client attraction and client experience. Stay current on your taxes. Make plans for gaps in earnings as things shift around.

Agents, your office is going to change

Owners and managers know that when the market shifts, agents quite often make a big move for a fresh start somewhere else. The coming and going we're seeing with the lenders right now will move to agents soon enough. Many companies are already starting to see it. In the same way that agents need to remain strong, informed, and appear confident for their clients, owners and managers need to remain strong and positive for their agents.

This is not the time to be a big fish in a small pond, you need colleagues and leaders around you who will challenge you to grow and adapt. While I'm all for real talk and feeling your feelings, pay attention to how much time you spend complaining and commiserating with your agent colleagues. Especially in a challenging market-a great community of agents around you will uplift you, and you should find an authentic way to uplift your colleagues as well.

Advice: As an agent, I'm looking at my values and what support I need from my brokerage and my colleagues around me. Your brokerage should be strong in the areas you are weak and be able to help support your business growing and strengthening. That looks different for everyone.

Chaos is a ladder

Two Game of Thrones quotes in one LinkedIn article? I know. This is what comes of not having an editor. That said, Peter Baelish aka Lord Littlefinger understood one very important thing: Chaos is a ladder. The instability of a shifting market can negatively impact a person's business. It can also create incredible opportunities for those who are paying attention and are stable enough to take a risk when an opportunity presents itself.

Advice: Stay calm, keep your business financially stable, and be ready to take advantage of opportunities.

What got you here won't get you there

I've heard experienced agents say, "Now these new agents are going to have to learn to work!" That's dismissive and untrue. Agents who joined the industry in the last 7 years or so have ABSOLUTELY been working hard. But the work is going to change. Think of it as having spent the last 6 or 7 years on leg day. We're really going to need to focus on strengthening your upper body. Many agents have very little experience in a market where buyers have choices and time to think. Many agents haven't yet had the opportunity to negotiate inspections or concessions for their buyers. Agents will need skill and patience to explain these changing conditions to sellers.

Advice: Take a ruthless assessment of your skills and gaps in your knowledge. Don't be shy about seeking out advice from agents who've been in the business longer than you. If you're looking to switch brokerages, take care to find a place that has training and support in the areas you are weak.

In Conclusion

If you joined the real estate industry after the last downturn you have everything it takes to succeed in the shifting market. Staying humble, strengthening your community of agents, and aligning with a supportive company will make all the difference.

Marguerite Martin is a different kind of Tacoma real estate agent.?Check out the?Tacoma Neighborhood Guide?to find answers to questions you have about neighborhoods in Tacoma and Pierce County. When the time is right to start looking, Marguerite can connect you with a local real estate agent who specializes in the neighborhoods you love most.?Click here to contact Marguerite.