Overcoming 2023's Rocky Real Estate Market In The New Year
Rising Mortgage Rates, High Home Prices, And Poor Housing Inventory Have Realtors Hopeful For Change In 2024.
“It was brutal, it was Game of Thrones."
Jordan Glynn, a Los Angeles and Minneapolis-based real estate agent, laughs as he recalls the struggles the last year has brought upon the market.
“We just had a lot of things happening," he explains, emphasizing the headline of rising concerns that have made life incredibly difficult for those needing movement between buyers and sellers.
“We have the interest rates, the inflation, and the cost of housing, which has gotten so high," notes Glynn. "For a $400,000 home, you would need to make $115,000 a year, and that’s just really not a lot of people in America.”
2023 Was Tough For Property Business
Looking out over Los Angeles County, it's hard not to find similarities between the rocky, uneven, mountainous terrain and the ups and downs of the 2023 real estate industry.
It’s an eerily breathtaking day in Southern California; the brisk beams of gold cascading over the Hollywood hills, the blue sky shining like a tropical sea over acres of palm trees and dry earth at a time when the rest of the country is buried under feet of cold slush, the kind that wets your ankles and soaks your socks and infests itself into every corner of your soul.
But the pristine weather can’t provide the pacifying balm and necessary reassurance so many realtors need in this new year.
We saw rising mortgage rates (weekly averages hitting 7.79% for 30-year fixed and 7.03% for 15-year fixed in October 2023, according to Freddie Mac), which caused unprecedented stalls in supply and demand.
Nearly 40% of homes in the country sold above list price in June 2023, with that percentage only dropping marginally to 28.8% in November, according to Redfin.
With many being priced out of the heavily competitive market, fewer homes were sold overall (June 2023 saw a 15% drop year over year, with little recovery by November, continuing to show a 6% drop).
Meanwhile, housing supply hit a particularly low point in July 2023, showing a 15.9% drop in the number of homes on the market.
The punchline?
Fewer homes were available, fewer homes sold, all while list prices continued to climb.
Stating it was rough out there feels like a tremendous understatement for one of the most difficult fiscal and financial periods in recent memory.
And no one knows that better than residential real estate agents.
“The market has just…it’s gotten hard,” admits Glynn. “I lost most of my buyers.”
But if there’s one thing realtors know how to do best, it’s how to keep swinging in uncertain times.
Glynn has an infectious optimism for the new year and a positive outlook that things will turn in the right direction. And as a realtor across some of the most competitive markets in the country, he is retrospective about what those in the industry should double down on to make it through another 365 days of unpredictability.
So, What Should Agents Do To Take Full Advantage Of The Housing Market In 2024?
Glynn notes it’s all about being prepared and taking charge of the opportunities you do have.
Be Ready (And Plan Ahead) For Market Changes
He explains a mindset of believing the market would stay consistent caught him off-guard and left him unprepared to wade through the more difficult and uncertain times 2023 brought.
“I was just kind of living my life, like…clients are always going to come, we’re always going to sell houses, everything’s going to be alright.”
And without rainy day funds or backup plans, Glynn was forced to pivot.
His advice for others?
“Plan accordingly and save for when markets change because markets always go up and down.”
And this recommendation doesn't just apply to realtors.
Bumps in the market can also lead to a dangerous waiting game for prospective buyers, further impacting an already unstable atmosphere.
Even with mortgage rates showing early signs of stabilization (with Freddie Mac reporting U.S. weekly averages hitting 6.66% for 30-year fixed and 5.87% for 15-year fixed, as of January 11th, 2024), there’s a hesitant optimism in the air as to whether this positive forward momentum will stay.
Your best bet?
As a real estate agent, be willing to answer your buyers' tough questions, and be prepared to help them move quickly to avoid stalls...like missing out on that dream property. Get second opinions on lenders, be ready to negotiate list price, and if you're representing a seller? Make sure to act fast to jumpstart a faltering listing.
Consider Being A Referral Agent While Expanding Your Network
Being the sole realtor on a property isn’t the only way to walk away with a win.
Glynn advises agents to consider becoming referrals as well as ensuring they’re licensed in alternate states.
He explains that by being a referral agent, you’re still going to walk away with a piece of that commission when a sale is finalized. Therefore, consider gaining expertise on popular relocation destinations and staying knowledgeable about the growing trends in and out of nearby areas.
Another must to consider?
Widening your net. Meet more people. Get more connections. Secure more clients.
“You really have to expand your network to be successful,” Glynn notes. “It’s just like working your rolodex.”
And while the nostalgic rotating card decks of contact information may have ultimately dropped in popularity, getting the most from people you know certainly hasn’t.
Get Comfortable Making Connections In The Wild
With clients pressing pause on home searches and a serious shortage of good inventory, Glynn was temporarily forced to transition back into hospitality to pay the bills. However, it’s not something you’ll hear him complaining about.
“I can make some really good cocktails,” he laughs.
And while heading back behind the bar top might not have been in his initial plans for 2023, Glynn’s appreciation for the role is grounded in more than just an affinity for good spirits.
“I also think that’s a great opportunity,” he emphasizes. “That’s where I started when I went into real estate, and then I met a lot of clients at the bar tap.”
Doubling down, Glynn reiterates that “everything you do in real estate is about meeting people.”
And he’s not wrong.
In an industry where who you know and who you meet drive your bottom line, stepping into a position where you serve an ever-evolving turnstile of clientele happy to make small talk can’t possibly hurt.
Add in the fact that in 2022, realtors with two years or less experience only had a median gross income of $9,600, a side hustle can keep realtors employed through turbulent times in the market while also allowing them to pocket hundreds (if not thousands) of potential leads.
“I can’t think of a better way to meet someone than just chatting them up at the bar.”
Not sure of how to transition your time pouring drinks into legitimate clients?
Don’t stress, and let the conversation unfold organically. Glynn explains it’s when the golden question of “And what else do you do?” pops up that always opens up the opportunity to detail his realty day job.
From there, the next steps are quick.
“My aunt is going to buy a house – we love you – do you have your card?” Glynn reminiscences enthusiastically.
Multiply that by dozens of clients a night, and you’ll fill enough black books to take you through any shaky year in the market.
Market Yourself…Hard
As a real estate agent, social media is your friend (make that, best friend), but to make it through a year of unpredictability, you’ll have to do more than just post to your feed and keep that Instagram grid pretty.
Make sure you join city-specific and local realty groups on Facebook and take every opportunity to demonstrate your expertise by answering questions on sites such as Quora and Reddit, leaving positive comments on local business accounts for increased visibility in your community, and utilizing a variety of hashtags on Instagram to reach new and targeted demographics.
Link any and all publications you interview with to your social platforms, and make sure to tease each new article to drum up increased attention.
If you’re feeling unsure about the increased attention on you – don’t.
Glynn insists you need to stay on the top of people’s minds to snag deals, advocating for spending on increased advertising across Google, Instagram, and even TikTok.
“If you have the budget for that – this is the time I would say that you want to put a lot into marketing yourself.”
Early 2024 Estimates On The Real Estate Market
While the new year has just gotten started, good news is already on the horizon.
The National Association of Realtors predicts existing home sales should see improvements in 2024. More specifically, they project these sales will rise 13.5%, while new home sales could continue to rise another 19% by the end of 2024.
Hot cities to watch?
Austin-Round Rock-Georgetown, Texas, takes the top spot (surprising no one). With flocks of A-list celebrities fleeing the high costs of Southern California, Texas has welcomed them with open arms, lower list prices, and steaming plates of BBQ and green chili queso.
Throw in larger homes for less, Tesla’s new headquarters, and the Lone Star state’s quirky “Keep Austin Weird” slogan, and the hype makes sense.
Dallas-Fort Worth-Arlington, Texas; Dayton-Kettering, Ohio; Durham-Chapel Hill, North Carolina; and Harrisburg-Carlisle, Pennsylvania, round out the top five.
Even better news for 2024?
Inflation has already gone down, and we’re choosing to remain optimistic for the remainder of the fiscal year.
But to take Glynn’s recommendations, real estate agents should continue to be prepared for the ups and downs that the market can bring at any time.
Consider Data-Driven Approaches To Build Lucrative Client Lists
With so much unknown, it’s no wonder why so many realtors are turning to the data – namely, lead generation and CRM software – to build customized lists of potential clients and better service their existing buyers and sellers.
The National Association of Realtors surveyed recent respondents regarding their most used tech tools over the past 12 months that have produced quality leads, and 36% named customer relationship management systems (CRMs), preceded only by social media.
CRMs and lead generation software, such as PropertyRadar, allow agents to effortlessly discover properties and potential clients to target, allowing offers to be personalized by thorough public records data – making sure that they're able to reach out with the best, most compelling opportunities.
Looking to connect with multiple clients at once? PropertyRadar’s integrations empower agents to connect via phone, email, or direct mail. Thousands of realtors, investors, and small businesses are already leveraging this breakthrough tech to secure hyperlocal leads in their communities.
And with the market looking up in 2024, it’s time to tap every resource available to make sure you’re prepared and can make the very most of this fresh start.
You can get started now with a free PropertyRadar trial and tap into over 150 million properties nationwide.
