In our new 12-part coaching video series, we’ll be covering how to deal with a shifting real estate market. When applied, the techniques we discuss will allow your business to thrive during a shift—or in any market, for that matter. For our first episode, we’ll be defining what a shift is.
To put it bluntly, “shift happens.” Real estate has always been cyclical, and what goes up must come down. Fortunately, what is down will also come back up. These shifts occur when supply and demand move out of balance, and there are a few driving forces that cause this.
Buyer demand is driven by affordability and perception—how many people can afford a home and how many think it’s a good time to buy. What else causes economic shifts? Currency exchange rates, political climates, interest rates, inflation, population, jobs, household income, and much more.
There are three types of markets in real estate:
- Buyer’s market—more than seven months’ worth of home supply
- Balanced market—Between five and seven months’ worth of home supply
- Seller’s market—less than five months’ worth of home supply
A shift becomes a time of great opportunity for people who are willing to do what others won’t. There’s no escaping the certainty—there’s only dealing with it. In a shift, the effort that got you to where you are isn’t going to keep you there.
If you came from an era of average effort, you’ll have noticed that you don’t receive more than what you put in. This average effort may have simply meant that you got to keep your job, but in an era of extra effort, working at an average level could cost you everything.
In real estate, there’s the law of equilibrium. It states that the available income in the market determines the number of agents in it. As the number of transactions increase, so does the number of agents. Conversely, when there are fewer transactions, there are fewer agents. Those who take advantage of this will earn better rewards. History repeats itself, but in order to profit from it, you must remember it.
If you’re working three steps forward but the market drives you four back, you’re out of the game. Three steps forward and three steps back means you’ve simply survived. But if you’re three steps ahead and the market only goes back two, you’ve absorbed the hit, you’re still in the game, and you’re doing more than just surviving.
If you can shift your thinking, you can shift your tactics. Research shows there are specific tactics that must be used in order to conquer a market shift, and we’ll be covering the first tactic in the next episode of the series. In the meantime, visit our website and sign up for our newsletter to learn more great tactics, tips, and strategies. Until then, stay tuned!