Recently, there has been a lot of discussion about the uncertainty surrounding the real estate market. Oftentimes, the best way to figure out what's actually going on in the market is to talk to other professionals in the field to develop a consensus rather than rely on every piece of news and publication you see. Doing so also gives you the benefit to learn how others are adapting and thriving in a changing market.
This is why we invited Marketing Club members Mary Anglin and Troy Schlicker to share their expertise, experiences and what they are seeing in the market right now. Below is a summary of the discussion. Make sure to watch the video for all of the details!
Discussing How the Market Is Changing in Different Markets
Mary has been in real estate for eight years and lives and works just east of Los Angeles in the San Gabriel Valley. It seems to her that the market changed overnight, especially for agents who weren’t paying attention. The average time a house is on the market has increased, the number of offers has decreased, and a lot of listings are dropping their prices.
With these market changes, Mary believes it is important that agents constantly educate themselves on what is going on in their area so that they can clearly communicate this to their clients. Being able to interpret that information for clients will help them make informed decisions.
Troy has also seen a shift in his local market. He has been a real estate agent and broker for 8 years as well and is based out of Austin, Texas. He has his own boutique brokerage and was in the mortgage space prior to getting his real estate license.
He has seen the market begin to level out more similarly to what it was pre-pandemic. Although it is still a strong seller’s market, both buyers and sellers are having to readjust their expectations. He does see it as fast paced, but not at the level it has been for the past 18 months.
The Importance of Giving Clients Context
As the market slows, there is a lot of talk of recession. Troy notes the importance of putting it into a more historical perspective. When it comes to things like pricing and interest rates, you have to be able to put them in long term context to see what might be ahead for the future. For example, a 5% interest rate is not bad historically, which is how many people see it today.
He also emphasized the importance of understanding what is happening in your local real estate market and what the objective is of your client to best serve them. It may not make sense for some people to buy right now, but for others, it could be the perfect time!
You should analyze both the market conditions and the client’s personal situation in order to be their trusted advisor. Troy said, “Just because it's the right mathematical or financial decision doesn't mean that it's the right decision for that person if it's going to cause them a lot of additional stress and anxiety.”
Advice for Helping Clients During a Shifting Market
Setting clear expectations when you first begin working with a client will also help them have the best possible outcome for their specific situation. Mary noted that a recession can scare people into having unrealistic expectations because they think the market is going to crash. She said, “We need to get our thinking and understanding in line with what's normal. I don't see the market as crashing, but I do see it as calming down.”
The best way to set expectations with your clients is to educate them. Being honest and communicating clearly will bridge the gaps between any unrealistic expectations they may have and reality.
So there's two crucial things that we need in order to communicate this shifty market.
The first is market knowledge. You have to understand what's going on not only in your market, but in these surrounding areas or in the markets that a lot of these potential buyers are coming from.
You also need to understand your client's objections. This is crucial in setting those expectations and making sure that they understand exactly what could happen in their current situation and in this current market.
Interested in more tips and resources for surviving and thriving during a market shift? Check out the Marketing Club for $1.