If you believe that – and if you are willing to put the recipe to the test – 2016 may just turn out to be your best year yet in real estate.
“While we are still in the midst of recovery from the downturn, there is definite strengthening in the market,” observes Sherry Chris, president and CEO of Better Homes and Gardens Real Estate. “We think opportunities in our industry will abound next year as a variety of economic factors – low unemployment, rising rental costs, continued low interest rates, and more – open the door for REALTORS® and pave the way to growth.”
There are some mitigating factors.
“Inventory is still tight in many areas and absorption rates are on the low side,” notes Nelson Zide, president and CEO of ERA Key Realty in Framingham, Mass. “It may be a while before more sellers are ready to make the moves that will ease the crunch.”
Fast-changing technology and generational differences are tossing some traditional industry practices to the curb – even as it drives the revival of others.
“The search for a home is everywhere today,” notes OB Jacobi, president of Windermere Real Estate in Seattle, Wash. “It has never been more crucial to innovate and maximize the power of technology to empower and educate consumers in new and impactful ways.”
And legislative changes – such as TRID, the TILA-RESPA Integrated Disclosure rule that took effect last October to make mortgages more transparent for consumers – can mean increased paperwork and closing issues.
“Ultimately, anything that helps consumers make better mortgage decisions is a boon to our industry,” says Rei Mesa, president and CEO of Berkshire Hathaway HomeServices Florida Realty. “I believe TRID will be sorted out quickly, but it may cause some issues in the short-term for those who were ill-prepared.”
But there appears to be more cause for confidence than for concern. For one thing, as Zide pointed out, 2016 is an election year – a time traditionally favorable to real estate, with little rock-the-boat legislation likely to come down the pike. “Next year,” he says, “offers all the right components for agents to dig down and focus on this message to substantially grow their business.”
For another, says Candace Adams, president and CEO of Berkshire Hathaway HomeServices New England Properties, “Renewed confidence among first-time buyers offers reason for optimism.”
For Helen Hanna Casey, president and CEO of Howard Hanna Real Estate, headquartered in Pennsylvania, there is opportunity in understanding what today’s consumers want – and delivering it in viable ways.
“Millennials, for example, who’ve historically shied away from homeownership, present unprecedented opportunity,” she says. “Studies show that student debt is often the only debt they have, and with their good jobs and good credit, they can often qualify for a mortgage. As rental prices soar, and as millennials marry and start to have families, the prospect of buying a home of their own becomes appealing and economically sensible. It’s clearly time to reach out and build the relationships that will guide this group into the marketplace.”
We are seeing a movement toward community, Adams notes. “Millennials – and many right-sizing retirees as well – want to work, shop, eat and play in the same neighborhood where they live. Understanding what drives these consumers – and other demographic groups – and developing innovative ways to reach them and assist them in attaining their goals – can be a key opportunity in 2016.”
With an influx of first-time and right-sizing buyers, the need for inventory is critical. What can the REALTOR® do?
“Remember the investors who bought up all those rental properties during the last downturn?” asks Chris. “In many cases, prices have risen enough for them to realize the profit they sought. Motivating these investors to sell will bring properties back into the market.”
There is additional opportunity in demographics.
“With Latinas, for one,” Chris explains. “Statistics point out that by 2020, more than 50 percent of homebuyers in America will be Latino. Since women are the decision-makers in most Latino households, it is incumbent on us to reach out to them – and to LGBT buyers, many of whom have the resources and the desire to own a home.”
And the time is right in other areas.
“We are looking for increased sales in second homes, retirement homes, and high-end properties as investment portfolios increase in value and consumers have the resources for the homes they may have delayed purchasing,” says Mesa. “And for brokers, a stronger economy opens new prospects for mergers and acquisitions as well as organic growth.”
2016 also offers opportunity to bring bright young people into this business, observes Adams.
“Brokers who network can actively recruit from among a large pool of upward-looking candidates,” she says, “including those who didn’t find the jobs they sought after college, or those who began in other careers, but are now looking for something more challenging and with unlimited earning potential.”
All in all, as Michael Feroli, chief U.S. economist at JPMorgan Chase, recently commented to the New York Times, “2016 may be as close to a feel-good time as any we’ve seen in the past several years.”
This is all good news for the industry. But if success, as Unser defined it, is the meeting of opportunity with preparation, how and where do brokers and REALTORS® prepare to meet the expanding opportunity?
Sometimes, everything old is new again, reflected Zide, and so one good place for agents to begin is by working their database – to extremes.
“Times change,” he says, “and we are reaching out to a new breed of consumer. But we can’t overemphasize the value to your business that comes from your own sphere of influence. References and referrals from the people who know and trust you – the very cornerstone of the client relationships you have built – remain your most effective introduction to the people you want to meet.”
Jacobi shares that view. “A career in real estate is, and will continue to be, a lifetime commitment to make and maintain strong connections,” he says. “This is still a personal business, nourished and supported by the REALTOR®’s dedication to individualized assistance, good communication skills, and maintaining lifetime relationships.”
Brokers and agents should collaborate in the effort, suggests Craig Cheatham, president and CEO of The Realty Alliance, a national network of real estate firms.
“In the coming year, brokerages can work with their salesforce to design the kind of roles and structures that leverage individual strengths and make sense for the business enterprise,” he says. “These efforts should explore involvement in more aspects of the transaction cycle and be geared toward interacting with potential buyers at a much earlier point.”
The idea resonates with David Boehmig, president and co-founder of Atlanta Fine Homes Sotheby’s International Realty.
“As agents and brokers become more sophisticated in their messaging and approach to consumers,” says Boehmig, “early contact and a strong depth of knowledge about local markets and pricing trends will be accretive to business results.”
Technology, to the extent and in the ways we use it, from transaction management to social media to 3-D virtual home tours, is critical in today’s world. In fact, some might say, mobile tools, Apple watches, and GPS apps, for starters, have already replaced yesterday’s pen and paper.
Or have they?
“We live in an incredibly fragmented environment,” notes Joe Rand, managing partner with Better Homes and Gardens Rand Realty in New York’s Hudson Valley. “Our worlds are cluttered with texts, emails, and social media marketing messages, seemingly 24/7. If you are marketing via social media, you had better be creative enough to make it count. Don’t just post. Create a group that actually fosters discussion.”
And while you’re at it, adds Rand, don’t get lost among the 20 electronic birthday messages your client will receive today. “Buy a card. Sign it. Stamp it, and send it via U.S. mail. It may not totally stun the recipient but, believe me, it will make you stand out from the crowd.”
REALTORS® should be alert to client life changes, he advised – a marriage, or the birth of a baby that may signal a need to buy or sell.
“You may read about it on Facebook,” says Rand, “but acknowledging the event up close and personal is another way to differentiate yourself.”
Providing the human element, of course, in no way diminishes the value of the multiple devices and social media tools most REALTORS® use every day.
“I’m looking at my Apple watch as we speak,” Casey remarks. “But in this competitive world, you need to be the local authority, know what consumers want, be their advocate, and deliver information as the consumer prefers – be it by text, email, snail mail, or face-to-face.”
Bringing It Together
In our overscheduled lives, it just may be that 2016 will be a year of reprieve and reward.
“With the real estate market continuing to rebound, and no major regulatory issues on the horizon, we are in a good cyclical position,” notes Mesa. “It’s a good time to be a buyer, it’s a good time to be a seller, and it’s a very good time to be a REALTOR®.”
Some problems that have plagued brokers, such as the scuffle for control of data, may be headed for resolution with the recently announced partnership between the National Association of REALTORS® (NAR) and Project Upstream – a coalition of brokerages, networks and national franchises coming together to facilitate the development of a comprehensive and rules-compliant data management program.
And challenge, as Chris observes, can be turned into opportunity.
“The market downturn several years ago put a number of homeowners into foreclosure,” she notes. “But with jobs more plentiful and a stronger economy, many of them are ready and able to re-enter the market.”
Taken together, it appears that 2016 may be the year of the stand-out REALTOR® – the broker or agent who is best equipped and most motivated to merge preparation with opportunity.
“For all our dependence on devices,” Cheatham says, “I believe the overall trend in 2016 is for the public to ‘come home’ to real estate practitioners as the best source for accurate and complete information – and for the best analysis of the mountains of data out there.”
Barbara Pronin is RISMedia’s contributing editor.