"Those of us who make it through the next few years will need a high pain tolerance, a high skill level, and a high savings account balance."
Those of us who have lived through tough markets before are more than willing to share insights for surviving and thriving.
Education and honesty are the keys. Sadly? Those two items are hard paths for many agents to admit they must pursue.
2007-2011 were my best years of my 22 year full time career. I look forward to the culling of the herd again.
My mother has been in high end real estate around Seattle for over 25 years, routinely sells 2m+ houses and has been through both of the major downturn after the dotcom and the financial crisis. Her take is for stabilizing prices with slowing sales in her market and, for what it’s worth, I tend to agree. There are 200 some licensed agents in her area and yet she has around 60 % of the listings at any given time. There are two valuable take aways from this and a caveat to follow.
One, people return to good established agents, time after time, and especially in the high end. There will likely be a large drop on the price of starter homes because these were the most over bid by the young buying population that correctly thought the time was now or never but upper and middle markets won’t budge because the buyers wont have to, the owners are less likely to lose their jobs in the coming white collar washout of junior workers, and they’re sitting on sub 3% mortgages only a fool would leave when inflation is as high as it is. Remember, houses do well in inflationary times. All the more so if you borrow $1 million plus dollars at 2.5%.
Second, if you want to crush it, be ready to grind for a long time. Sorry to say it, but if you got in during the last few years with hope of a grand income, you should probably get a different job. The old folks won’t be giving it up. And here is her caveat to new agents: there was already a movement underway to reduce commissions before all this happened. Expect that trend to continue if housing prices stabilize at these rates. 3% made sense a decade ago. Unless prices really drop it makes no sense for people to continue paying the commissions we historically have. There is also a lot of good economic research showing that agents work harder and get higher asking prices on their own homes vs. when they work for others and it just makes sense. They make money on selling. Why hang in there for another two weeks to a month for another hundred thousand to the seller on a million dollar sale when there is a $30,000 dollar paycheck waiting? I wouldn’t and most of them don’t either. When houses were selling themselves and bidders were competitive, this wasn’t an issue. It’s going to come back with a vengeance now, as will the smart people questioning the value of paying this kind of rate. My mother said she’ll retire when that finally goes down. I’d think heavily about that if I was a young up and comer.
She’s right. 30 year broker. It’s been hard few years but exciting with the free $, now it’s just gonna get hard.
Each market is unique, migration patterns & local industry and jobs will protect some areas more than others.
Low rates will keep people in homes that might be considered underwater. If moving down in price 100k means your payment is virtually the same, the value is realized even if there’s no “equity”.
Great info, thanks again for insights
Inspectors will get a bounce from a moderating market as purchase contracts with inspection contingencies will come back
I remember seeing so many TikToks from RE brokers/agents talking about how people HAVE TO BUY immediately or they'll run out of time. Honestly, I think 50% of the FOMO experienced in the last few years is because of social media. Guess we'll see the flipside now. Thanks for sharing, subb'd to Kira.
7 years in the business. I’ve always strived to save my commission income and invest in rental assets. I have multiple streams of income and a working spouse thankfully. I think the Fed will pivot in the next 12 months and rates will drop a bit or something big like the bond market will break. Otherwise the housing market is going to reprice down 25-30%. You’re correct lots of lenders and agents will find something else to do.
My experience with RE agents is that too many are spoiled, lazy and ethically challenged. I’ve never encountered such an opaque industry before where information is so hidden. Sorry for the honest, hard-working ones who get hurt in the coming downturn, but I hope the arrogant, sleazy ones get their comeuppance.
R.E is sucks in Miami. Overpriced in a market where salaries are among the lowest in the country. I sold my home in 2020 and I never felt better, it was a money pit, the utilities, the maintenance and taxes through the roof. R.E. is a liability not an asset it's the new American nightmare unfolding...
Fewer realtors? I'm trying to see the downside of this.
Did you see what gain of function research they are doing in Boston?
In Orange county NY residential transactions peaked with a dollar volume just over a billion dollars in 2006. By 2009 that handle had decreased over 70%. Multifamily, and condo deal flow was even worse as lenders went lights out on these markets with draconian lending standards.
A lot of agents dropped out and offices scaled back on advertising budgets and became very stingy on commission splits with agents. I expect this to repeat and I also think a lot of the "100%" commission broker business models to bring down the hammer and claw into the commission pie once again.
I'm in the business but I no longer am a principle broker and did not keep track of the transactions during the latest period.