{"id":3422,"date":"2022-08-19T14:02:36","date_gmt":"2022-08-19T14:02:36","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/08\/19\/new-agents-prepare-to-weather-the-market-shift\/"},"modified":"2025-03-13T02:46:19","modified_gmt":"2025-03-13T02:46:19","slug":"new-agents-prepare-to-weather-the-market-shift","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/08\/19\/new-agents-prepare-to-weather-the-market-shift\/","title":{"rendered":"New agents prepare to weather the market shift"},"content":{"rendered":"\n

Stacy Pulliam transitioned from her career as a hair stylist and salon owner to the real estate industry at the onset of the COVID-19 pandemic. As industries shut down and the housing market ground to halt, she said there was definitely some trepidation.<\/p>\n\n\n\n

\u201cIt was scary at first, but I\u2019ve been an entrepreneur since I was in my late 20s. If you let yourself worry too much, you won\u2019t accomplish anything, so I had to look for ways to reinvent what I had started doing in real estate,\u201d Pulliam said.<\/p>\n\n\n\n

While Pulliam\u2019s home state of Georgia had COVID precautions in place, it was not completely shut down and she said that, soon after the initial shutdown, business began ramping up.<\/p>\n\n\n\n

\u201cI am near a major medical district as well as a military facility, so there were still people moving in and out, especially in the medical field,\u201d the Augusta-based eXp Realty<\/strong> agent said. \u201cWe still had medical residents coming in and additional staff to help with the pandemic and they all needed places to live. It was definitely booming, not for a good reason, but it meant a lot of business in real estate.\u201d<\/p>\n\n\n\n

The slow transition to a buyer’s market<\/h4>\n\n\n\n

Two years later, however, the real estate landscape looks a bit different. In Pulliam\u2019s market, the median home price has risen 46% in the past two years to $219,450, according to Redfin<\/strong><\/a>. In addition, mortgage rates are no longer in the high-2% to low-3% range, with the 30-year fixed-rate mortgage averaging 5.13% for the week ending August 19<\/a>. These factors have greatly decreased housing affordability<\/a> for many, hampering homebuyers\u2019 purchasing power and resulting in less buyer demand compared to the frenetic market conditions of fall 2020 through winter of 2022.<\/p>\n\n\n\n

\u201cIt is slowly transitioning over into a buyer\u2019s market,\u201d Pulliam said of Augusta\u2019s housing market. \u201cWe are having houses that sit on the market for longer, so sellers are not getting those 30 offers on the first day anymore, which is giving buyers more to choose from and more negotiating power.\u201d<\/p>\n\n\n\n

Honing a new set of skills<\/h4>\n\n\n\n

For Pulliam, the shift in market conditions has meant that she has to start honing and developing a different set of skills if she hopes to replicate the success of her first few years in the industry.<\/p>\n\n\n\n

And Pulliam is not alone in facing this challenge<\/a>. In 2021, the National Association of Realtors<\/strong> gained 100,876 new members<\/a> \u2014 a 6.92% increase from a year prior. In addition, according to NAR\u2019s 2022 Member Profile, 7% of members have two years of experience in the industry and 18% have one year or less of experience, meaning that roughly a quarter of agents in the industry have only ever operated in the COVID housing market.<\/p>\n\n\n\n

In RealTrends\u2019<\/strong> third-quarter BrokerPulse<\/strong> <\/strong>survey<\/a>, which surveys over 19,000 real estate brokerage leaders from across the country, the majority of respondents noted that between 25% to 75% of their agents have never been through a down market.<\/p>\n\n\n\n

One Berkshire Hathaway HomeServices<\/strong> broker, who guessed that about 50% of his agents have never seen a market like today, noted that he is challenged with keeping agents motivated. \u201cSo many were facing burnout from such a busy and challenging market starting in June 2020 through March 2022, only to have the market turn so fast.\u201d<\/p>\n\n\n\n

Doubling down on education<\/h4>\n\n\n\n

To help their newer agents navigate this shift, many brokers are doubling down on agent education.<\/p>\n\n\n\n

\u201cFor the individual real estate agent, the market really doesn\u2019t matter,\u201d Marc King, the president of Keller Williams<\/strong> told RealTrends in June<\/a>. \u201cIt comes back to the education, the training and what you are doing to increase your skill base. Right now, we are leaving a speed-based market and entering into a skill-based market, so coaching and training are massively important right now. <\/p>\n\n\n\n

\u201cThey need to be knowledgeable about creative financing, and I am wondering how many agents in the industry right now are aware of the different financing options and how higher interest rates impact what types of financing buyers may want to use,\u201d King said. \u201cBut agents in the industry today haven\u2019t had to use these products so they don\u2019t know about them.\u201d<\/p>\n\n\n\n

Having just started her career in real estate in January 2022, Jenelle Werner is one of the many agents investing her time and money in her education as she looks to set herself up for long-term success in her new career path.<\/p>\n\n\n\n

\u201cI give a lot of credit to my mentor,\u201d Werner, who is a member of the RE\/MAX Advantage Plus<\/strong>-based Minnesota Real Estate Team<\/strong><\/a>, said. \u201cThis truly is a job that is learning by doing it, so a lot of it is not being afraid to ask questions. I also do a lot of reading about the industry and I take part in all of the trainings my brokerage offers.\u201d<\/p>\n\n\n\n

Ken H. Johnson, a real estate professor at Florida Atlantic University <\/strong>and a former agent added: \u201cEducation and mentorship never hurt, but they pale in comparison to hands-on experience. So, if you can get that by working with your broker or an experienced teammate on a deal and learn how to list a home and learn how to negotiate, that will be huge.\u201d<\/p>\n\n\n\n

In addition to making more time for continuing education opportunities, Manhattan-based Compass<\/strong> agent Brian McDonough, who transitioned into the real estate industry in May 2021 after spending a decade in the fashion industry, has also started working with a real estate coach.<\/p>\n\n\n\n

\u201cCompass gave us access to coaching for the past six months and that ignited a fire for me where I just decided to hire my own real estate coach because there is a lot going on \u2014 times are changing in real estate,\u201d McDonough said. \u201cIn the past, [agents] would cut their teeth in rentals and then do a lot of open houses where you could network with clients over food and drink. I entered into the industry at a very different time, and I feel like now it requires you to have a lot more resources and technology behind you.\u201d<\/p>\n\n\n\n

While McDonough acknowledges that his coaching sessions<\/a> are on the more expensive side, he feels the investment is worth it, even as the market becomes more uncertain.<\/p>\n\n\n\n

\u201cI definitely think about money more,\u201d he said. \u201cSome of the lead-generation sources are also pretty expensive, but then once you think about what it could lead to in a year or two, $150 or $200 a month, in the long run could result in so much more. Sometimes you have to spend a little money to make more money.”<\/p>\n\n\n\n

Fewer agents investing big money in lead generation<\/h4>\n\n\n\n

As the market pivots and leads are not coming in fast and furious, agents new and old are having to spend more time on lead generation<\/a>, something many new agents find challenging even in the best of real estate markets.<\/p>\n\n\n\n

While some agents get their start in the industry using paid lead generation sources like McDonough, not all new agents see the value of these sources like he does. As sales volumes decrease, some new agents are reevaluating their budgets. For Trystan Foglia, who started her career in January 2022 as a member of the eXp Realty-based Kameli Team<\/strong>, this has meant cutting back on some of her lead-generation spending.<\/p>\n\n\n\n

\u201cAt first we were throwing a lot of money into lead-generation sites and other things that would do marketing for us. We are definitely trying to cut back on spending with that because we\u2019d get buyers from these sites and we do all this work for them to back out at the last minute because they didn\u2019t realize what the market was doing or what interest rates looked like,\u201d Foglia said.<\/p>\n\n\n\n

Instead, Foglia said that she and the rest of her teammates have started doing more marketing themselves. The team has active Facebook<\/strong>, Instagram<\/strong> and TikTok<\/strong> pages, where they post videos and other informative content on a regular basis, and they also volunteer at and run events with two local animal rescues.<\/p>\n\n\n\n

\u201cWe are going out more into towns in our metro area and walking around to shops and handing out business cards, and just trying to be more involved,\u201d she said. \u201cBy cutting back some of the smaller spending, we are saving money that will allow us to host events or do something important if we want.\u201d<\/p>\n\n\n\n

Johnson says he always encourages agents to work on their lead generation, especially their listing leads, as he notes that over the long term, many of the most successful agents generate most of their sales volume from listings<\/a>.<\/p>\n\n\n\n

Listings are key<\/h4>\n\n\n\n

\u201cHolding the listing is key,\u201d Johnson said. \u201cWhile I believe we are going back to marketing spans of 60 to 120 days, there is quite a bit of research that shows that, on average, listing agents make significantly more total commissions in a year than buyers\u2019 agents.\u201d<\/p>\n\n\n\n

But as the market turns, Johnson notes that agents who hope to be successful listing agents will have to find ways to market the properties and get it in front of as many brokers as possible<\/a>, by knowing how to effectively market through the MLS.<\/p>\n\n\n\n

\u201cResearch shows that agents who market to other brokers sell more properties because there are a whole bunch of other brokers and only one you and those brokers have access to all of their own clients who they can then get the listing in front of,\u201d he said.<\/p>\n\n\n\n

Agents will survive; won’t be easy<\/h4>\n\n\n\n

While Johnson doesn\u2019t doubt that many new agents will survive the market shift, he noted that the going won\u2019t be easy.<\/p>\n\n\n\n

\u201cIt is going to be tough for the newbies,\u201d he said. \u201cThey are going to have to shift gears, develop sales and marketing techniques and learn how to negotiate as the market softens. It will be difficult for them to survive, but those that do will earn a very good living.\u201d<\/p>\n\n\n\n

Up in Minnesota, Werner knows that she has her work cut out for her if she hopes to succeed in her new career, but she is still optimistic about her future in the industry.<\/p>\n\n\n\n

\u201cI am not as busy as I would like to be, but the way I look at it, is that I am growing my business right now,\u201d Werner said. \u201cI am sending letters, contacting people I haven\u2019t spoken to in a long time and that is building business for my future. This may not be the super-strong year that I wanted it to be, but I am hopefully laying the groundwork so that next year I am twice as busy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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