Good morning. Kids are off to school and it’s time to get to work!
I woke up this morning to the following articles in The Wall Street Journal: “Global Car Makers Reduce Output in China” – car sales are slowing and plants are operating below capacity, “Investors Brace for Further Tumult” – stock traders are still trying to get their heads wrapped around last week’s selloff and many are skeptical of its return, “It Isn’t Time to Dive Into Oil Yet” – even with oil dipping below $40, a 30% drop since June, investors still believe it could dip further.
Every year summer comes to an end, kids get back to school, holidays come into view, and the housing market slows. Regardless of how strong the global economy and the local market, home sales slow this time of year. This translate to fewer sales opportunities for Realtors, title companies, lenders, and others who support our industry.
In other words, a downward market shift is upon us. For how long and to what degree? I will leave that to the experts. These downward shifts provide unbelievable opportunity. An opportunity to grow market share by evaluating your business more closely; expenses, income, lead generation and conversion rates. Those that continue without change will follow the market trend (at best!) or likely be out of real estate within 4-6 months. If you think that following the market trend is sufficient, consider this simple math. Let’s assume the housing market dips 30% over the next 4 – 6 months. That means you will also see a 30% dip in home sales. Can you afford a 30% dip in sales?
The market shift I’m talking about is already here. The question is how quickly you and I can respond to it. Following are some recommendation I would employ today:
1) Brace for the worst, plan for the best. Stay positive. You are about to make decisions that will position you for a strong 4th quarter.
2) Make a list of your sources of business and then evaluate them in order of effectiveness. Any sources of business that are not producing results should be cut, immediately. The only exception I would consider are long-term projects. The key here is to be honest about the legitimacy of their long-term nature. If you’re skeptical, cut it.
3) Refocus effort and efficiencies on the business sources that produce results. Get more from them. It’s highly likely you can do this without spending additional money.
4) If you have a team it’s time to re-evaluate the performance of every team member. You need team members that do more than pull their weight. They need to contribute to the greater good. As job losses will continue to mount over the coming months you will have an opportunity to expand your search of rock solid talent. Top Producers will see Realtors with great potential struggling. They should evaluate these individuals and if they can provide immediate results, find a way to make them a part of their team.
5) Connect with your sphere of influence and stay in touch. Though it’s true many Realtors will give up when times get hard, there are others who will be coming after your base of clients. If you don’t want to lose them you need to make sure your past clients know that you are their Realtor.
6) Partner with exceptional service providers. A deal busting out during great economic times is hard enough. Deals busting out in downward market shifts can seem unbearable. Limit your opportunity to failure by partnering with the best. Narrow your list of lenders. Are they ready for TRID changes, do they treat your clients with respect, have great communication skills, and are the smart enough and creative enough to pull off the most complicate loan scenarios? If so make these lenders your partners. The same rule applies to your title partner, your home warranty provider, and more. Do not get trapped into making decisions based on who throws the best parties, has the best handouts, or serves the most lunches. As with the previous points made, this decision on who to partner with must be performance based.
The market concerns me but only to the degree that it’s completely out of my control. I find comfort in knowing that I am employing the very same principles I recommend to you. They are well documented and proven.