It’s hard to believe that it’s been more than twelve years since the bubble burst on the real estate and mortgage market back in 2006-7, leading us into some dark times and a Great Recession. Anyone who was working as a Realtor, mortgage lender, or in the business remembers it well.
Even at our most confident, we know that an economic slowdown is coming again soon. No matter how you crunch the data, it points to a correction after eleven quarters of economic growth and a new milestone of homeowner equity.
But what goes up, must come down. The waves come in, and the waves go out.
I truly believe that the real estate market is strong and the next downturn will have more to do with the broader economy (and our non-mortgage debt) than the housing sector. However, the coming recession could get pretty ugly and last a lot longer than a year or two. The wolf is almost at the door.
Seasoned real estate and mortgage veterans will have a lot of perspective and experience to fall back on. But there are a lot of semi-newbies – or those who just never truly absorbed the lessons from the last crash – who still could use some guidance.
The cycles of real estate are inevitable and nothing to be feared…
IF you prepare and position your business strategically
BEFORE we’re in the midst of it.
For that reason, I wanted to present to you these 10 lessons I learned from the last real estate crash:
It may feel like all is lost, but golden opportunities will emerge – if you pay attention and take advantage of them. For instance, short sales, selling bank-owned properties, cash-out refinances, investor purchases, etc. will all be more prevalent in any down economy.
Just focus on adding as much value as possible, and your business will always thrive.
2.People still have needs
Sure, the luxury home market may not be popping, and the refinance boom may be on hold, but that doesn’t mean there isn’t plenty of business out there. In fact, people always have needs when it comes to buying, selling, and getting home loans, even in a down market. During the last crash, the agents who were thinking clearly and rationally (and that wasn’t a lot of us, including me!) got on board with short sales early, or aligned themselves with banks and sold REOs. Lenders focused on hard money or financing for investors, etc.
When the next downturn comes, can you start including property management to take advantage of the rental market? A lease-to-own program? Work with first-time buyers? Cater to investors? Sell land? Develop a project, yourself?
People always have needs, so just position yourself accordingly when the market swings.
3.“Brand always wins.”
The great marketing icon, Gary Vaynerchuk, urges entrepreneurs to establish their brand. That’s what will separate you from the pack and invigorate your business, far more than the company you work for or any product or service you offer.
Since Realtors and mortgage lenders are essentially lone wolves, they should be working diligently to build their brand. That’s even more important when there’s a market downturn, so start building a strong brand TODAY to prepare.
Contact me if you'd like to chat about how we can build your rock-solid and unforgettable brand!
4.There will be less competition
During the halcyon days of 2003-2006, just about everyone and their mother got a real estate license or started peddling home loans. Literally – their mother, too.
But once the housing market fell off a cliff, it wasn’t as fun, easy, or lucrative anymore, and there was a stampede for the exits.
You’ll see the same thing once it’s “grind time” again. So, while you’re going through those down periods and feel hopeless or like giving up, remember that every day that you stay in business, you just outlasted an agent or two who did not!
5.The universe rewards energy
I truly believe that the universe rewards energy, and that’s especially true for marketing, prospecting, and sales. More than ever, selling real estate or mortgage loans will be a contact sport, so you need to get back to basics and do A LOT more of what works.
You may have to go through a few (hundred) more “no’s” before you can get to your “yes!” so prioritize your prospecting and become a machine!
6.Refocus on relationships
More than ever, it will be important to invest in people. Go to every networking event, call your database from A to Z, knock on doors, get back to open houses, reengage your referral partners, and connect with as many human beings as possible. Make sure you’re offering value and listen.
You never know what good might come of it, so focusing on genuine relationships is the best way to stay in business.
7.People ALWAYS need someplace to live!
The real estate and mortgage markets will never actually “go away” because people always need a place to live (and access to “cheap money”).
In fact, the biggest threat to your career isn’t the next downturn, but Artificial Intelligence and automation, the big firms like Zillow, Redfin, Google, etc. getting into real estate, and the big banks squeezing out the smaller lenders.
8.Keep showing up to work
Back in 2006/2007, I was working for a real estate shop in Sacramento, California, and doing pretty well. In fact, I had just written a $30,000 check to buy into a small mortgage company – only weeks before the crash! Needless to say, it all fell apart.
The bad news kept coming as deals fell apart, buyers backed out, lenders went bankrupt, and it was nearly impossible to close a loan. Each day it felt like you were walking into the office only to get punched in the gut (or someplace lower!).
Everyone was worried about paying their next bill. Everyone’s fight or flight kicked in. No one was sleeping through the night. The anxiety was palpable.
It was so exhausting to get my ass kicked at work every day that soon, I didn’t want to show up at all. And then, I didn’t even want to get out of bed. Why bother? Many of us walked around like zombies, half checked-out, for years!
But a funny thing happened. Those agents and lenders who showed up to work found a way through. By putting their anxieties and defeatism aside and treating it as a job, they closed a deal here and there and muddled on.
It wasn’t always pretty – there were bankruptcies, foreclosures, divorces, and an unprecedented amount of financial stress not felt since the Great Depression. But the only way through it is to take it head-on, and just showing up every day is half the battle!
9.“Be the most positive person you know.”
I think it was the famous Zig Ziglar who used to say that. I’m no warm and fuzzy self-help guru, but that sh*t makes a huge difference - not only on your mental health but on the success of your business. We make a choice whether to be positive or negative, so why not choose to be super positive? That’s one thing you can control, no matter what.
10.Shout it to the rooftops!
When people who work in sales are in such a slump that they couldn’t sell ice cream on a summer day, their natural inclination is to clam up, become less communicative, and grow increasingly isolated. Or, even worse, there are a lot of professionals who still put on a good show and pretend that everything is normal for their own ego’s sake.
When the market turns, you should do the exact opposite. Talk honestly to everyone you know. Become the best information source available to them. Be authentic. Take every challenge, setback, defeat, question, issue, and, yes, victory that you experience and turn them into stories to share with others. Be real. Offer compassion as well as tangible solutions.
Be the person who leads them through the hard times…not someone who shies away from them!