Agents are changing their strategies to better suit the needs of the current housing market, from continuing education to increased advertising spend and fine-tuning their businesses.
The housing market in cities and metropolitan areas across the country looks very different than it did just a year ago, and agents and brokers have had to adapt.
“If anyone thinks they’re going to sell real estate in ’23 like they did in ’20, ’21, or early ’22, they’re going to be disappointed,” RE/MAX president Nick Bailey said.
Adapting Strategies in a Changing Housing Market
The nationwide median for days on market was 70 days as of December 18, 2022, up from 49 days the previous year. According to Altos Research data, the share of homes with price decreases increased from 26% a year ago to 41% this year, while the Altos Research Market Action Index score fell from a 90-day average of 54.86 to 40.09.
Furthermore, mortgage rates are currently hovering around 6.3%, compared to 3.28% a year ago, and Redfin reports that the bidding war rate on offers written by its agents is 44.6%, a 22.7 percentage point decrease from the previous year. It’s a difficult housing market, and experts don’t expect much improvement in the first half of 2023.
“The uniqueness of the COVID market and what it took to be successful in that market, those skills probably won’t mean as much going forward,” said Ken Johnson, a real estate professor at Florida Atlantic University and a former agent. “We are entering a period when it is extremely difficult to sell property.”
“We’re going back to all of these things that we kind of took for granted. We’re going back to 60, 120, and 180-day marketing cycles. If I’m going to take a listing forward, I need to be good at marketing my property through the MLS and to other brokers,” Johnson added. “We will see more heavily negotiated sales agreements, whereas previously everything was sold as is for extremely high cash prices with no contingencies. Agents on both sides of the transaction will develop or brush up on those skills, which haven’t been used in a few years.”
Alternatively, as Keller Williams’ Marc King stated in June, “right now, we are leaving a speed-based market and entering a skill-based market.”
Strategies for Succeeding in a Changing Housing Market
This has meant spending more time as an educational resource for his clients for Bryce Schuenke, a top-producing Re/MAX agent in the Minneapolis-Saint Paul metro area and member of The Minnesota Real Estate Team.
“During this time, it will be critical to maintain your prospecting — making phone calls to current and past clients, checking in to see how they are doing, asking any questions they have about the market or inflation, and simply calming any fears they may have,” Schuenke said.
Schuenke also stated that setting realistic expectations with sellers is now more important than ever.
“In the last couple of years, I think people got used to the idea that a home would sell in a day or two, or maybe within a few hours, but that isn’t the case anymore. So it’s critical to let clients know what to expect before entering the market and to emphasize that marketing is now crucial,” he said.
Tracy Do, a local Coldwell Banker agent and leader of the Tracy Do Team, is also ramping up her marketing efforts in the Pasadena metro area.
“With prices leveling off and demand decreasing, we are watching our overall operating budget while increasing our advertising dollars,” Do explained. “We’re doing a lot of social media advertising, as well as Google ads, and increasing the budgets for those campaigns — and also making sure our print campaigns are effective.”
Alison Elder, a top-producing Berkshire Hathaway Homeservices Drysdale Properties agent in Lake Tahoe, is working on more targeted campaigns.
“We’re spending a lot of time digging into our database and designing and launching relevant advertising as we work to better touch our sphere,” Elder explained.
Elder said she is using the “down time” afforded by the slower market conditions to organize her business in addition to refining her digital marketing campaigns.
“It’s really a good time for any agent to look at their local market and set reasonable goals,” Elder says. “We’re working on better integrating with Berkshire (she moved her operation to BHHS earlier this month), developing our advertising budget, and evaluating all of the programmes we’ve launched and what we’re paying for. Is there any money being squandered? We plan to run a profitable business while spending 20% less than we did last year.”
Adapting to a Changing Market through Education and Planning
Many top agents are working on furthering their real estate education through coaching and continuing education courses, in addition to retooling their business plans.
“I don’t think you can have enough education in any profession, even if you’ve been doing it for a long time,” Schuenke said. “It is critical to constantly figure out and learn new things in order to stay ahead of the game. Personally, I try to attend as many classes as possible. I have a master’s degree from before I started in real estate, so education has always been an important part of how I started and how I continue to run my business. Take a class that is relevant to today’s market whenever you can.”
While agents are aware that they will almost certainly never see a housing market like 2021 or early 2022 again, they are grateful that the market shift has given them a chance to catch their breath.
“I checked in with everyone on my team about the market forecast for 2023, and after the last couple of years where the work has been so intense, everyone is kind of happy to have a little downtime,” Do said. “If the downtime lasts too long, that will be another story, but for the time being, no one is concerned.”
Scott Michaels, who works in the formerly white-hot city of Austin, Texas, feels similarly.
“I’ve never experienced anything like what we did from the middle of 2020 through March of 2022 and I wasn’t alone. “Realtors all over said the same thing,” the Compass agent explained. “You did everything you could to stay healthy and sane.”
Michaels claims that the slowing housing market has given him more time to focus on aspects of his business that were neglected during the peak of the pandemic housing market.
“Farming in your area, staying in touch with past clients, the slowdown has allowed us to refocus on those things that are critical to keeping our business thriving in the future,” Michaels explained.
