The US real estate market experienced a rapid downturn in 2022 with high house prices, high inflation and volatile interest rates. Many buyers forgo making an unaffordable purchase, and potential sellers prefer to stay where they are rather than giving up their low monthly mortgage payments.
For real estate agents, the market downturn isn’t just a concern — it could be the reason they’re changing careers.
“I would hate to be a rookie agent just getting started, and it’s really hard to get started now,” says Mauricio Umansky, founder and CEO of The Agency, a California-based international boutique real estate brokerage.
But the news for agents isn’t all bad — Umansky and the Agency’s Chief Strategy Officer, David Walker, say the shift in the housing market presents agents with an opportunity to stand out from the crowd. As they prepare for the premiere of “Buying Beverly Hills,” a Netflix reality show that follows Umansky and agency agents as they negotiate luxury real estate in the Los Angeles area that Set to debut this fall, Umansky and Walker share their tips for agents, expectations for what happens next in the housing market, and how consumers can complete a successful real estate transaction.
Advice for buyers and sellers
With the housing market on a downtrend from its June peak, home sellers should brace themselves for a different market than what has happened over the past two years. Umansky says home values aren’t falling, but with higher interest rates to contend with, buyers are waiting for asking prices to fall from their dizzying levels that reflect the activity of the past two years.
“There is pressure on a salesperson to make a sale,” Umansky says. “When that finally happens and you start to see prices go down – and you will – you’ll start to see trading volume go up again.”
With monthly costs to consider, many buyers are now in a better position to be selective about their choice of home, keeping a maximum price in mind and no longer having to compete for a seller’s favor. . “This seller now realizes that he has to put the house on the market at the value of the house. … Now we are going back to a normal type of market,” says Umansky.
Adapting to a new buyer and seller mindset
The cooling market may make estate agents jittery, with fewer transactions and an end to the glut of eager buyers, but Umansky points out that agents should be aware of the relief some buyers may be feeling.
“For the past two years, buyers have been extremely frustrated because they haven’t been able to find their dream home, to buy their dream home. They would find something, they would be in a bidding war with 26 people,” Umansky says. “And now a buyer can go to market, find their dream home, bid on it, negotiate on it, do proper due diligence on it. (Before) buyers had to make deals that they didn’t even do no due diligence.”
At the same time, however, sellers have been able to set ambitious prices over the past two years and, in many cases, see their sale price exceed expectations. As interest rates continue to rise and more buyers pull back, a listing agent’s job is to prepare the seller for a different market. The task at hand is not for those who are not interested in the job.
“It’s the kind of market where if you’re selling with someone who does real estate part-time, who does one transaction a year, now is not the time for that. Sellers are going to struggle in this market, buyers are going to have challenges in this market, and having a professional is really important,” says Walker.
Prepare for future success
The nature of most realtor income is commission-based, and fewer transactions can mean smaller paychecks. Finding real estate and a willing owner naturally takes more work, with fewer willing sellers. In August, 590,549 newly listed homes came on the market nationwide, according to Redfin, down 19.1% from August 2021.
While any contraction can seem scary, Umansky says it’s an opportunity for agents to prove their knowledge of the market and become a trusted real estate expert. “Be extremely competent and be creative. Right now you actually have the opportunity to be creative and become a real estate finder again,” he says.
Of course, that doesn’t mean agents won’t have to tighten their belts to get through the toughest times. Walker explains that he’s emphasizing to people at the Agency that this requires a change of perspective from the past two years: “Your business might be down 20%, but if the market is down 40 %, you win, you win market share.”
Share the effort
However, the key to gaining market share that will last until the next real estate boom is communicating with customers, even when the news isn’t good.
“The other advice I give to agents is don’t be scared – when things slow down and they don’t get visits to their properties, they tend not to call their sellers, they tend to disappear , they tend to avoid the call. It’s, again, a time to stand out and become a real service-oriented person,” says Umansky. “Call the customer. Say, ‘Look, here’s all the publicity we’ve done, here’s what we’ve done, here’s where the house is, here’s what it looks like on the shelf compared to its competitors.” Have real conversations and enjoy it, because the person who reaches out and talks to their customer will keep the ad and eventually sell the ad.The person who does nothing will lose the listing.
Walker points out that agents and sellers should talk about housing market news to help allay fears when possible, but also set realistic expectations about time on market, true market value and research. of new accommodation.
“Now is the time to have meaningful conversations with your clients or potential clients. Because locally, at certain price points, the challenges facing the real estate market are very different,” says Walker.
Rookies will naturally have it the hardest
Getting started in any career field when things are slowing down isn’t exciting for anyone, but that doesn’t mean it’s impossible to start in real estate now. “It’s the mentality of, ‘I’m going to work twice as hard even if the market is tough,'” Walker says.
Where rookies can benefit the most is by connecting with other seasoned agents. Real estate teams are increasingly popular, made up of experienced agents and new to the field, working together to provide full service to clients, while offering new agents coaching and access they might not see. be not otherwise. “Right now the team world is very important,” Umansky says.
The juxtaposition between seasoned and newbie agents will be something to capture on “Buying Beverly Hills,” Umansky says. Among the agents tracked by the show are two of the daughters Umansky shares with his wife, “Real Housewives of Beverly Hills” star Kyle Richards – Farrah Brittany and Alexia Umansky.
“You’re going to see a variety of agents, from experienced agents to rookie agents, and see how some of the recruits survive or don’t survive,” Umansky said of the show.
