Will the tide go out on Real Estate?

By
Real Estate Agent with HomeSmart SA541769000

How will the economic downturn caused by the Corona Virus pandemic affect real estate? Well, in the absence of a crystal ball I can only predict that there will be a slowdown. How deep will the market slide? It is probably too early to tell.

Real estate for the last few years has been easy. Property values have risen steadily, construction resumed big time in many areas of the country, and interest rates have fallen to all-time lows. All the while, lending practices for many types of loan programs became more liberal. Collectively all these factors made selling homes easy.

As a result, many new agents entered the business. Many of them had little business or technical background, just a desire to make some of the easy money that real estate offered. It wasn’t just resale. Many started flipping homes, building spec homes or leveraging multiple investments. I am reminded of the saying, “A rising tide floats all boats.”.

Lately, I have been seeing a lot of posts on social media from agents that were not involved in real estate when the last downturn in 2008 took place. Many are getting nervous. They are wondering what they should do to prepare for the upcoming changes.

Newer agents are going to adjust to a changing market. Just as we did in 2008, they will need to learn new skills, develop new relationships and adapt to changing conditions.

Also, I predict technology will change the home selling process. The way we show homes, execute contracts and move homes from listing to closing will require more skills than just a handshake and a smile.

We are already beginning to see contract wording and addendum being put in place to protect buyers and sellers from the unexpected. We will likely see more changes to real estate contracts. Addendum and clauses will be written to address changes to lending, appraisal and even the disclosure process.

We will adjust. Just as we always have in the past. We just need to make sure the boat stays afloat even if the tide goes out.

 

ship aground

 

Joe Domino is a Realtor® serving the Phoenix/Scottsdale area. Need more information? Or to Search for your next home, visit www.Scottsdale-AZHomes.com

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Bananatude
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Rainmaker
3,341,640
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Joe this is my 3rd downturn and in all fairness this has not turned down for me yet... still getting calls still have listings and still have things in Escrow....Endre

Apr 16, 2020 10:29 PM #2
Rainmaker
186,703
Realtyna Inc
Realtyna - Newark, DE
Realtyna- MLS RETS Integration software & services

The thing about the tide is it always comes back. Nice blog Joseph Domino 480-390-6011.

Apr 17, 2020 02:45 AM #3
Rainmaker
5,332,527
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Joseph Domino 480-390-6011 this reminds me of a quote from Warren Buffett.... " when the tide goes out, those who are swimming naked are fully exposed"...

through every downturn, there is an exit from those who are not holding their own.... they are living on whatever floats their way.... 

 

Apr 17, 2020 04:17 AM #4
Rainmaker
1,559,093
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

I do believe there are some agents who won't continue, just as there are some small businesses that won't return. But in general, real estate will continue and those who adapt will do great.

Enjoy your day.

Apr 17, 2020 06:07 AM #5
Ambassador
2,977,311
Anna Banana Kruchten Arizona's Top Banana!
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Hi Joe - I've been through many 'downturns' since 1987!  Some folks learn from them, others don't.  One thing I know for sure is change will happen! Agents would be well advised to adjust, shift and find new ways to be at their best, smartest and wisest - in any market. AND.......have enough $$$ cash to last through a downturn, invest in solid investments for the long term and stop buying all the 'shiny' objects people keep wanting to sell agents. I know it's not easy to 'get this' when one is brand new in the business and most go from one commission to another.  Those that are open to learning.....good for them!

Apr 17, 2020 09:26 AM #6
Ambassador
2,977,311
Anna Banana Kruchten Arizona's Top Banana!
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

                                                         

                                                    Featured in BananaTude

 

Apr 17, 2020 09:28 AM #7
Rainmaker
1,306,134
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Hey Joseph Domino 480-390-6011, you hit the nail on the head with "I predict technology will change the home selling process. The way we show homes, execute contracts and move homes from listing to closing will require more skills than just a handshake and a smile." Don't be surprised to finally see bankers relent to electronically-signed loan docs and virtual closings.

Apr 18, 2020 04:16 AM #8
Ambassador
2,012,883
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

I concur with Joe. You did hit the nail on the head. Glad Anna featured this in Bananatude. D 

Apr 18, 2020 09:00 AM #9
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