You’ve seen all the headlines and likely heard the whispers. The housing market is shifting away from its pandemic-induced hotstreak, leaving many real estate professionals pondering what their next moves will be as they try to weather the implications.
Gino Blefari, CEO of HomeServices of America, had a few ideas as he addressed hundreds of brokers at RISMedia’s 34th Annual CEO & Leadership Exchange held at the iconic Mayflower Hotel in Washington, D.C., in early September.
“You’ve got to be all in and play full out because casualness will create casualties in a shifting market,” said Blefari. Keeping attendees on the edge of their seats during his keynote address, Blefari delved into the current state of real estate amid the uncertain economic situation unfolding nationwide.
“Here’s the reality. We’re in a recession,” he said. “I learned a long time ago the hard way that the facts don’t cease to exist just because you ignore them, but in all this, keep in mind that where there is chaos, there is opportunity.”
“Chaotic” certainly seems appropriate, considering how things have unfolded this year.
No one could have expected inflation to hit a four-decade high, prompting the Federal Reserve’s aggressive approach to interest rate hikes to reel it back in. At the same time, mortgage rates have surged beyond what economists and analysts predicted in 2021, adding to the consumer strain that translates into cooling market activity.
“If anybody entered the real estate business during COVID, they had to learn a brand-new script that they haven’t used before in those two years,” Blefari said, emphasizing the shift away from the hot seller’s market that took place in 2020 and 2021.
That has been evident as home sales have decelerated in recent months, and industry forecasters are predicting further declines heading into 2023.
“We’ve gone from almost 6.8 million sales to 4.8 million,” Blefari said. “That’s a big decrease, but most of the decrease is going to come to the agents that weren’t doing much business, not the highly skilled agents.”
And while shifting market conditions may seem ominous when juxtaposed with the highs that have been seen within the past two years, Blefari offered a glass-half-full perspective to attendees.
“There are almost no mortgage defaults thanks to homeowners’ equity and continuing lack of inventory keeping the market moving,” he said, indicating that inventory is slightly over three months’ worth of supply.
That’s still low, but it’s an improvement from the two-month supply that the market saw during the pandemic.
Even mortgage rates, which skyrocketed this year, are still “good” compared to some historic numbers, according to Blefari.
“They seem high from 2.5%, but they are still very good interest rates,” he said.
To thrive in the new normal that the housing market is moving toward, Blefari urged attendees to “focus on the fundamentals.” This includes reengaging with past clients.
He also emphasized that the shifting market will likely have its share of agents drop out of the business—admittedly, an opportunity for agents looking to stick around.
He indicated that savvy agents could benefit from “farming agents” leaving the industry, a technique he has personally used in his career.
“I remember the market got really bad in 1991, and what I started to do was farm the agents that were going out of the business,” Blefari said, detailing how he’d meet with agents exiting the business and negotiate so that they’d refer him to their past clients.
“That is worth 20 more deals to just one single person,” he continued. “That’s what I have some of my top people doing right now.”
With the audience hanging on his every word, Blefari recommended a series of steps agents and brokers can take to keep their businesses moving forward, including refreshing their online presence and “getting back to basics.”
“You’ve got to remember your ‘why,'” he said. “When times get tough, you want to remember your ‘why.’ It will carry you even when it’s difficult, because there will be some hard times, but if you can know your ‘why,’ that will help.”
Blefari highlighted the following steps he’d recommend for those agents looking to thrive in the shifting market:
- Have a strong work ethic
- Use technology to improve your efficiency and provide a better experience for your client
- Be a good listener
- Approach each customer with empathy, understanding and respect
- Be knowledgeable about the process
- Delegate when possible
- Market yourself and your listings in a modern way
- Respond to inquiries quickly
- Know your local market
- Have a growth mindset to maintain relevancy and confidence in your business
- Continue learning
In a nutshell: Blefari thinks agents need to be proactive and committed if they’re going to survive and thrive in the new market.
“As the old axiom goes, there are three kinds of people: those who make things happen, those who watch things happen, and those who say ‘what the hell just happened?'” said Blefari. “But I think there is a fourth person, and that’s the person who anticipates what’s coming and takes action before it does.”
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