Is Now The Time To Be A Real Estate Agent? Active Agents Say Yes!
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It’s no secret that the real estate market is shifting in 2023. The pandemic-era housing market boom saw buyers pulling out all the stops to purchase their new home before prices (and mortgage interest rates) went any higher. And now that property values and interest rates have gotten so high that many buyers have been effectively priced out of the market, sales are naturally slowing.
Consider the US housing market stats of today compared to just two years ago:
In May 2021 the average American home sat on the market just 14 days before going under contract. As of May 2023, the average days on market was up to 31.
In May 2021, the average listing sold for 2.2% above asking price. By May 2023, buyers on average were paying exactly asking price.
629,259 homes were sold in May 2021. Only 497,553 were sold in May 2023.
These metrics all indicate a slower market with less demand and fewer sales.
What the Changing Market Means for Real Estate Agents in 2023
It’s clear to see how the market changes affect buyers and sellers: listings are sitting longer and buyers have more negotiating power than they did two years ago.
But we need to dig a little deeper to see how these changes are affecting real estate agents. Let’s start with the good news for agents.
Positive Changes for Agents in Today’s Market
The slower market is presenting several opportunities for agents in 2023. Here are some of the noteworthy benefits of slowing market conditions.
The fair-weather agents will exit the market. We all know agents who got their real estate license at the peak of the pandemic market, looking for a quick buck. Those agents won’t have the drive or persistence to stick around as it gets harder to land listings. This is good news for serious agents, regardless of how long you’ve been in the business. Experienced pros are sick to death of dealing with those amateur agents. And new agents will have better examples to follow of how professional agents should conduct business.
Your buyers may be more satisfied with your service. During the hot seller’s market of the pandemic, many buyers were forced to offer more than asking, include escalation clauses, and waive contingencies. This left many buyers feeling unsatisfied with their agents (through no fault of the agent, of course). Now that you have a chance to negotiate more aggressively on your buyer’s behalf, they can walk away feeling like they got a better deal. And this can improve their perception of you as their agent, whether you’re a seasoned agent or brand new.
You get a little breathing room. One of the great things about a career as a real estate agent is that you can decide how much to work and when. But since your income is tied to your sales, most agents found it difficult to take a break during the seller’s market years. If you’re an experienced agent, now might be the time to actually schedule a vacation. You’ve earned it!
You have a chance to strategize. In the go-go-go market of the last few years, many agents were simply rushing from one client to the next with little time for strategizing to maximize workflow efficiencies. Now that things are slowing down, you can take a beat to reevaluate business strategies like marketing, branding, and operations. And for new agents, you have a chance to think about how you want to run your business; this can give you a better foundation than the last group of new agents, which took a baptism-by-fire approach just to keep up.
Potentially Challenging Changes for Agents in Today’s Market
Changing market conditions can also bring new challenges. Here are a couple of potential hurdles for today’s agents:
There are fewer clients to go around. Perhaps the most obvious result of the slowing market is that there are fewer buyers and sellers in the marketplace. At the same time, the number of REALTORS is at a historical high, with over 1.5 million registered REALTORS in the US. This means we have more agents competing for a share of a shrinking pie. So you may need to up your game to earn your share. If you’re a new agent, you’ll need to be strategic about establishing yourself as a professional to compete with the reputable agents in your market.
You may go longer between commission checks. It may take a little longer to close a deal, which means a little extra time until payday. Now might be the time to revisit your financial plan to make sure you’re building in cash reserves for slower months than you’ve been used to. And for new agents, you’ll need a game plan for covering living expenses while building your business.
If you’re concerned about these challenges, keep reading! We’re going to give you tips and tricks to help you overcome these temporary drawbacks later in this article.
Candid Opinions on the Changing Market from Active Real Estate Agents
Hundreds of active real estate agents recently participated in a nationwide survey, designed to uncover honest thoughts and feelings about the state of the real estate market in 2023.
And, despite slowing housing market conditions, the results of the survey were overwhelmingly positive! Here are the highlights.
1. Real Estate Agents in the Field Are Still Confident in the Industry
Experienced agents understand that real estate markets are cyclical. Those who have been in the industry for 20+ years have seen everything from the extreme low of the housing market collapse in 2008 to the extreme high of the pandemic-era market. This may be why 97% of agents and brokers surveyed report that they can still create opportunities to make money in a declining market.
The ability to make money is a key factor in why agents choose to enter and stay in real estate. Despite the instability of today’s market, 65% of seasoned agents continue to stay in the field despite market instability because of the earning opportunities. In fact, the earning potential of this career is the number one reason seasoned agents continue to pursue real estate!
As a real estate icon with over 30+ years of experience and founder of OJO Labs, Chris Heller confirms that “there is opportunity every time the market changes. Seize it.”
Active agents express confidence in the current state of the market, as well as the immediate future of the market:
58% of respondents feel positive about the current real estate market.
58% also report that the current market is getting better.
And 83% say they feel confident the market will improve in the next 6 months.
2. Successful Agents Are Finding New Ways to Stand Out
Some agents are already feeling the effects of increased competition while others are simply preparing for it.
Of those surveyed, 55% reported facing greater competition this year. Furthermore, 4 in 10 agents have noticed that they have fewer homes available to show and/or list in 2023.
So, what are agents doing to stand out in this competitive market? The survey provided some interesting insights into skills agents can hone to gain a competitive advantage:
Networking
A whopping 92% of agents report that network building is a crucial skill for surviving a down market. Having a strong network allows you to pull leads from a pool of people who already know, like, and trust you. This gives you an instant edge over every other agent in your market.
Digital Marketing
Over half of those surveyed ranked digital marketing as a top skill needed by real estate professionals in 2023. Given the number of buyers who conduct home searches online and the number of sellers who use a search engine to find a local real estate agent, it makes sense that digital marketing is considered such a necessary skill.
Social media, in particular, is seen as an essential digital marketing skill, with 47% of those surveyed agreeing that social media is a top skill for agents in 2023. Interestingly, seasoned agents with over five years of experience were 11% more likely to see the value in social media than new agents with less than five years under their belts.
Communication
Communication is critical for earning the trust of your prospective clients and facilitating smooth transactions. For this reason, half of the agents surveyed recommended that today’s agents focus on improving their communication skills.
Time Management
Between showings, prospecting, inspections, and closings, real estate agents manage a wide range of tasks every single day. This is why 45% of respondents agree that time management is an essential skill in 2023.
Customer Service
Real estate is a service business. And today’s buyers and sellers have high expectations for the level of service they receive from their real estate agents. To stand out in a competitive market, 44% of respondents say that agents should focus on providing exceptional client services.
3. Job Satisfaction Remains High
On the whole, job satisfaction for real estate agents remains incredibly high, despite the slowing housing market.
An impressive 88% of agents surveyed reported being satisfied (or very satisfied) with their careers in real estate.
There are several factors that make a career in real estate so satisfying, including:
Flexibility. You choose how much you’ll work and when.
Autonomy. You essentially get to be your own boss.
Unlimited income potential. According to the Bureau of Labor Statistics, the average American agent earns $65,850 per year, and agents in the 90th percentile earn $113,320. In high-value markets like California, agents in the 90th percentile are earning $147,710!
Ease of entry. You don’t need a college degree to get a real estate license; you simply need to complete your state-required real estate course(s).
5 Steps You Can Take To Start (or Grow) a Successful Real Estate Career in 2023
Whether you are just now thinking about starting your real estate journey or are hoping to build your new business, AceableAgent has five actionable steps you can take to find success.
1. Build Your Skills
As we saw in the last section, experienced agents are building strategic skill sets to remain competitive. Online training classes can help you quickly hone your skills so that you can better serve your clients and grow your business.
2. Focus on Slow-Market Buyers and Sellers
While many homeowners are happy to remain in their current homes with the low interest rates they locked in years ago, downsizers who have enough equity to pay cash for a new place may be interested in selling the family home to purchase a smaller place.
You could also find success with other slow-market groups like:
Expired listings,
Investors, and
Relocations from more expensive markets.
But don’t try to spread yourself too thin. Take another piece of advice from Chris Heller:
Instead of [...] pursuing numerous lead sources, focus on mastering just one channel at a time. By doing so, you can develop a deep understanding of the best practices and nuances specific to that lead source, resulting in higher conversion rates and more efficient use of your time and resources.
3. Increase Your Exposure to Gain Market Share
When sales slow, the knee-jerk response is to cut back on expenses. And, in many cases, agents immediately slash their marketing budget to save money. This means that the agents who continue with their marketing plan hold a great share of the total advertising exposure in that market. And those who are willing to increase their advertising budget enjoy an even bigger market share boost!
4. Incentivize Buyers and Sellers to Choose You
Of the seasoned agents surveyed, 49% continued selling homes in previous downward markets by offering incentives to buyers. These incentives could be closing cost assistance, moving credits, or lease-break fee coverage.
The same could be done with sellers, perhaps including an expanded digital marketing package at no additional charge, or offering to cover the cost of a pre-inspection so that the sellers can address any potential issues with the property before listing.
5. Consider Expanding Your Services
If you’re struggling to find enough buyers and sellers to maintain your income through real estate transactions alone, try expanding into other real estate services. You could, for example, enter the rental market, serving as a property manager and/or leasing agent. With so many types of jobs in the real estate industry, you can pivot to meet opportunities afforded by changing market conditions.
Ready to Launch Your Real Estate Career?
With a last bit of advice, Chris Heller says, “It's a common misconception that you should only enter the real estate market when it's booming. With the ever-changing nature of the real estate industry, there is always a need for talented, dedicated agents. Regardless of the current market conditions, a career in real estate offers ample opportunities for personal and professional growth.”
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