Change can be stressful. That’s obvious. I don’t know about you, but I’ve picked up on a slightly stressed vibe when talking with the real estate community lately. We had such an aggressive market for the last couple of years, but now that things are slowing down, it can feel a bit stressful for some. For what it’s worth, I wanted to share a few thoughts for anyone who is feeling edgy right now about the market.
7 tips to NOT stress out when the real estate market changes
- It’s normal for markets to change: This is what we tell our clients, and this is what we need to tell ourselves. Real estate markets are constantly morphing, so we should expect change and plan for it too.
- Sellers will eventually catch up to the market: Right now sellers have been lagging behind the trend, meaning they’ve been wanting to price their properties higher than the market will bear. Sellers will eventually catch up to the market though, which will help put sellers and buyers on the same page. Kevin Cooper and Tom Lichtenberg reminded me of this point last week.
- Find some optimism: There are always two sides to stats. Sellers might look at a softening trend as a threat, but on the positive side buyers have more opportunity to afford the market and actually get into contract. I’m not saying to turn a blind eye to stats or perpetuate real estate spin, but simply keep things in perspective.
- Think about your marketing strategy: When you consider how the market is moving, who are your clients going to be next year? Now is the time to work hard and diversify your clientele if needed. Also, when a market changes, sometimes that means employing different strategies instead of doing the same thing that worked last year.
- Keep connecting with people: Business is about people. When we start to stress about market trends, the focus is removed from the most important thing. People. Yes, watch trends carefully, but be sure to let them serve and guide you instead of stress you out.
- Try to keep your emotions grounded: The plight of any self-employed person or sales professional is that our emotions are often contingent on how business is going. If things are booming, we feel great, but if things are slower, we feel down. The key is to find a way to stay grounded and put your confidence in something bigger than work. I’d love to hear what you do. I’ve yet to meet someone who does not struggle with this to a certain extent.
- Know the context of your stats: Lastly, when a market changes we can often look at stats with tunnel vision rather than the broader picture. For instance, on one hand it’s taking 40% longer to sell a house in Sacramento compared to last year, but four years ago it was taking twice as long than it is now. Additionally, inventory more than doubled in the past 18 months, but it’s actually at a fairly normal level right now.
Three graphs to provide context for the current market:
I hope this was helpful.
Questions: Which is your favorite point? Any other points you’d add?
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Ryan Lundquist: King of the lists!
#6 is my favorite. When all I did was lender appraisals and work slowed down I would mope about for awhile, get outside for a long hike with the dogs then start make a list of home maintenance items I had been putting off. But now that I am taking a serious stab at non-lender appraisal work I turn to the never ending list of marketing tasks. “Working ON my business rather than working IN my business”. Oh, and I still take the dogs for a long hike… they really like it when business is slow….(grin)
Great comment, Mike. That made me laugh. Thanks. That’s the best of both worlds. A diversified business plan and taking your dogs for hikes. 🙂 You know, this is probably the most difficult thing any self-employed or salesperson has to deal with. I won’t pretend to have that down perfectly either.
Interesting post, Ryan. Recently we took a little trip to Bodega Bay. Beautiful weather but lots of signs saying: We want our hospital! I asked about this around town . Turns out the only local hospital closed down. They don’t even have a rural clinic. No doctor in town (maybe a vet). The nearest hospital is 45 minutes down 101 (in light traffic, double that in heavy) in Santa Rosa. All you have there for immediate critical care is an EMT with perhaps only a few weeks of training. Of course you can always elect to call a helicopter, but you have to pay for it — $12,000. If someone in Bodega is sick or injured, people have to make some tough decisions
Bodega has some nice houses with ocean views, yet what can they be worth with no expert medical care anywhere near?
You always have interesting stories and points to bring into the mix. They still have WebMD and YouTube though, right? (kidding) That could be an issue for some. I don’t really know the market there, so it’s hard to say what is normal. That’s really too bad though. I wonder why the clinic shut down in the first place. I would personally rather live closer than 45+ minutes away to the nearest hospital, but that’s just me.
You are wise to want to live closer to a hospital than 45 minutes( plus waiting 15 minutes for an ambulance).. As you probably know, doctors talk about something called ‘the golden hour’; that’s a window for critical care after which survival rates drop precipitously. Does this affect house value?
It would for me.
It’s hard to say Ricardo. People who live in rural areas, for example, know they are further away, and they are okay with that. People who are not okay simply won’t live there. It’s hard to say if it will have an impact in Bodega Bay. I guess locals will have to watch the market and see if there is any impact on prices. That will be the key to watch over time.