Industry Decoded: Jack Miller
Illustration by Lanette Behiry/Real Estate News

Industry Decoded: How to talk about the market this holiday season 

T3 Sixty CEO Jack Miller says there's no reason to shy away from conversations about the housing market, as long as you arm yourself with knowledge first.

December 10, 2022
6 minutes

Thinking big about residential real estate success requires a big-picture perspective. Industry Decoded features industry experts who can enrich your understanding of issues affecting the industry as a whole.

As friends and family gather this season, it's perfectly natural for conversations to center around the important news of people's lives: new babies, empty nesting, new jobs or retirement. These types of life changes often lead to changes in housing. As a real estate professional, it's likely that over the next few weeks of end-of-year gatherings, you will find yourself talking about the housing market. 

Most people only know what the media tells them about the market, and a lot of that lately is focused on doom and gloom. Rather than lurk by the holiday buffet and hope no one asks any questions, I would encourage you to do your homework and arm yourself with the knowledge necessary to counter the myths, and to provide perspective to your friends and family. 

This is the perfect time to study your local housing market updates, talk to your mortgage partners, pull MLS statistics and look at insights from housing industry economists. Some of my personal favorites are Lisa Sturtevant of Bright MLS, Ivy Zelman of Zelman and Associates, Ellliot Eisenberg of Laughs and Graphs, and of course our own Dr. Paul Bishop at T3 Sixty. You will find many articles covering this kind of economic news in the By the Numbers section of this very website.

When talk turns to real estate, you want others to regard you as the expert in the room. In addition to local market knowledge, these broader messages should help guide your conversations: 

Today vs. the Great Recession

You'll likely hear people compare the current change in the market to the housing crisis of 2008. Even with rising interest rates, today's housing market is much stronger, and homeowners are in a much better position financially. In 2008, there were so many houses for sale — many of them short sales and foreclosures — that prices dropped dramatically. After buyers and sellers adjust to the current interest rate conditions and pricing that works with these interest rates, it is unlikely we will see continued large drops in prices. 

Advantages for buyers

The current state of the market means more options and less competition for potential buyers. Most buyers will be able to take their time looking for houses. They'll be able to search for houses that truly fit their needs in neighborhoods where they really want to live. Another bonus: There's a good chance they won't have to endure the stressful bidding wars of the past few years. 

Looking beyond mortgage rates

People may still be overly focused on interest rates, but that is only one part of homebuying. The goal of homebuying is the house, neighborhood and lifestyle; loans come and go, and the loan is just the tool to get there.

Demand is still out there

The prices of six months or a year ago are paper gains that homeowners may need to grieve, but like any paper gain, you only get the gain if you sell. For sellers, the outlook is good to get a fair price for their home once prices finish settling to what buyers can afford with the higher interest rates — which are still reasonable from a historical perspective. Demographics are driving the demand for housing, and while people may have less to spend than they did a year ago, there is still tremendous demand for homes. 

A slowdown can be good for business

When talking to others in the industry, it's important to remember that nearly everyone was working at a frenzied pace over the past several years; many of your peers got worn out with so much business. It's perfectly OK to view this slowdown as a bit of a breather. This is a great time to evaluate staffing and systems or lean into training. Anyone who has been in business for a while knows that companies are built during downturns and recessions. Companies that are well managed will become leaders when the market recovers.

Agents will need to change their approach

If you're a broker, note that about two-thirds of all active agents have never worked in a down market, and they're going to look to you for guidance. A year ago, they were working at managing multiple offers. Today, they need to work to find  buyers and sellers. They must be in touch with their networks. If they don't have networks, they have to build them, whether that's through one-on-one outreach or door knocking or social media. Agents who learn to thrive in a tight market will find they're unstoppable when interest rates begin to drop. 

Communication with sellers is key

Agents will need to work on setting new pricing expectations with sellers, including presenting active market comparables vs. sales from six months ago. They will also need to learn (or re-learn) how to effectively share market performance feedback, such as showing and inquiry activity, in order to secure price reductions when necessary. These are seller education skills that brokers and agents used frequently in the Great Recession, and it's time to dust off those playbooks and run them again.

Chances are, you won't need to go looking for ways to turn conversations toward real estate this holiday season; it will naturally happen. And, when it does, you should be prepared to chime in with the facts and historical context that help others understand what's really going on with the housing market and how it applies to them.  

Jack Miller has held leadership roles in the real estate industry for over two decades and is currently CEO and president of T3 Sixty, one of real estate's leading management consultancies. (T3 Sixty founder Stefan Swanepoel also founded Real Estate News.) Jack also contributes to the Swanepoel Trends Report, writing about brokerage industry trends, technology in real estate and emerging business models. The views expressed in this column are solely those of the author.

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