How to React To a Tough Real Estate Market

Agents have a choice to make at the end of 2023: adapt or be left behind.

In case you haven't noticed, the Real Estate Market is difficult right now, check out the number of homes that are expected to be sold in 2023 and how it compares to other years:

We're expected to sell about 4.3 Million homes this year. When was the last time we were closest to that number? 2009. That was NOT a great year for Real Estate. The country was reeling from the effects of the 2008 failure of Lehman Brothers and all of the fallout of the financial system nearly collapsing. 2023 is going to see a similar number of homes sold. Wow. That's where the similarities end though. We're not facing some huge economic meltdown, we're just seeing interest rates spike to the highest level in over 2 decades in an effort to cool down inflation.

Inventory is down (we're still at half the level we were before COVID) and the summer of 2023 saw several markets hit record high prices and deliver the lowest home affordability in a long time. All this is going on at once and I've never seen anything like it nor could have predicted it.

But here's the punchline for you as a Real Estate Agent: all of that doesn't really matter.

Ok, I don't mean the current state of the market doesn't matter, because it certainly does, but it shouldn't take over your mind because there is absolutely zero you can to do change where the market is. You have zero control over what the Fed does, what interest rates do, whether the economy goes into recession or not, etc.

You know what you do have control over? How you react to this market.

Let me put it in plain numbers. Back in 2021, we sold over 6 Million homes in the US. That roughly means that 1 out of every 9 adults in the US was party to a Real Estate Transaction that year. In 2023 if these numbers hold, it will be roughly 1 in 12 adults that buy or sell a home this year. That's it. That's the math. If before, you could get away with talking to 9 random people to find a buyer or seller, now in 2023 you need to talk to 12.

That's not a small difference, but its not an insurmountable one.

This is how you should react to this market: you need to find a way to talk to more people and find the most motivated buyers and sellers because those are the only ones that will be transacting right now. We need to make peace with the fact that in a market that went from 6+ Million homes sold in 2021 to 4+ Million in 2023 it's going to take more leads, more calls and more appointments to get the same number of deals as before.

This is how I tell Real Estate Agents that ask me how they should react to this market: focus on having as many Real Estate related conversations on a daily basis. That's it. If you can find 10 people a day to have a Real Estate conversation with, you're business is going to be fine.

Here are my top ideas that every agent should be implementing ASAP:

1) Your database. Most agents don't market effectively to their database, check out my FREE video "3 Steps to Database Domination" to learn how. Making sure you're prospecting your own Sphere of Influence (SOI) can help your chances of finding the most motivated buyers and sellers for you to help.

2) Social Media. You need to dig deep and offer value to your audience. Make them an offer. Pick one: new construction incentives, assumable loans, off-market properties, distressed properties, etc. Make sure to inform your audience about the great opportunities available to buy and sell right now. Post about it, go live, share stories. In between your personal posts, help keep your audience informed. If you find and offer or angle that people resonate with, run it as a paid ad. Agents that navigate social media effectively will weather this storm. You can generate conversations every day by interacting with social. The fastest way by far is through ads, but its not the only way.

3) Prospect. This is perhaps the most cost-effective way to generate new Real Estate conversations every single day. Whether its Circle Prospecting , Absentee Owners, Downsizers or even the more common Expired, Withdrawn/Cancelled or FSBO listings, there is nearly a limitless amount of people you can reach out to every day to help them reach their Real Estate goals. Just make it a goal to talk to 10 people willing to engage with you on Real Estate. That's it.

If you focus on having Real Estate focused conversations on a daily basis and block out all the noise, you're going to beat the odds.

All you need to do is go from 9 to 12. That's it. For some Agents, that shift will take them out of the business. For others, if you make peace with it and adapt, you won't just survive the shifting market, you can thrive!