It Will Be Okay. Let’s Go! – The Moriuchi Group

It Will Be Okay. Let’s Go!

There really should be a word for that feeling a 40+ year old person gets when they realize they are not the same age as the 20 or 30 somethings that they encounter. I find it so funny when my inner dialogue is marching along as if he is still twenty five or thirty, only to have something spill out of my mouth that clearly ages me in a younger audience. It’s certainly humbling to see the slightly ‘embarrassed for me’ looks on those less wizen faces. There is a great bit by Nate Bargatze where he pinpoints this phenomenon in such a fun way, which again returns me to my point, that there really should be a word!  

As I am slowly becoming the old guy (hey, not yet!) I have been perspective-taking of late. We head into a very different real estate market, one likely to be a make-it-or-break-it time for many newer agents in this field. I got my real estate license when I was about 25 years old and made the leap to full time Realtor a couple of years later. (It’s my opinion that full time is really necessary to have a real estate career/ business, but this is a topic for another day). Today my team includes agents from all different life stages, with agents in their 20s up to their 60s. Real Estate is like that, as it is a viable option for retirees from other careers, working parents and young people starting out. Most are drawn to the business by a desire to be of service, make a robust living and enjoy the freedom that comes with working for themselves.  As the principal agent of a team of fifteen plus agents, what I find especially interesting is that the ages of those on the team do not necessarily match their level of experience. Many of those I coach and mentor have only experienced a good market – and helping them adapt to the uniquely challenging market that we are now in is a daily endeavor.

As a Realtor it is not unusual to get anxious every January that you will never help another client buy or sell a home. It’s important to acknowledge that there is a seasonality to when people buy and sell homes, but this year is different. This year the pundits at MSN, CNN and Fox debate ad nauseam on how bad the economy will be because the Federal Reserve is fighting inflation. With bated breath we wonder, will it be a hard landing or a soft landing? 

If you are listening to all this “noise” you are being whipsawed back and forth between good news and bad news. As a real estate advisor this is exhausting, and in-it-of itself will have an impact on you consciously or subconsciously. What I know from my years in the business is that the first step to making sure you have a great year ahead is to block out the noise. My most consistent advice is to consciously choose to focus on what you can control – your routine, your daily actions and your mindset. 

You cannot control the macroeconomy. You cannot control the news outlets. You cannot control how other people feel about the news they consume.

All you can control is yourself. 

I sold real estate and grew my business during the Great Recession of 2008 – caused by the implosion of the housing bubble which triggered a global financial crisis. I was often scared and full of doubts, I am only human, but it created a professional resilience that I am grateful for.

To agents out there reading this, I am not discounting how you might feel right now. You may be anxious, nervous or scared. You might be exploring an additional income stream or other careers outside of real estate. Maybe even looking for that W-2 employment with steady income.

I know this fear and anxiousness. I remember how I felt and what others shared with me in 2008. Trust me when I say, there were sleepless nights. I entertained thoughts of going back to school to become a lawyer, I even took the LSATs. 

When I bought my first place in Moorestown, NJ on February 26, 2007, the  average 30 year interest rate in 2007 was 6.34%. To purchase this 1300 sq foot property in Moorestown I used a 1st mortgage of 80% at a 5.75% interest rate and a 2nd mortgage with a higher interest rate that ballooned after 15 years for the other 15%. In total my debt was at 95% loan-to-value for the property.  Talk about timing. This was either at the top of the market in Moorestown or maybe the penultimate point in the market. 

From that point forward it seemed like the wheels came off of the real estate bus.

Later that year a fellow Realtor in our boutique brokerage in Moorestown came back from a closing that did not happen because the company making the loan folded at the table – which by the way, was the same company that gave me my original loan. 

Can you imagine how this felt, as the Buyer, and as their Realtor? Probably a bit like the stock market falling out in the late 1920s – VERY unstable.

The Southern New Jersey market tumbled down from there with lower home values, fewer buyers and fewer sellers, until about 2010 when it bottomed and bounced along the bottom for a few years. 

During this time the fear was palpable. No one knew where the bottom was going to be and the news was very grim. Tens of thousands of realtors left our regional MLS. People were losing their jobs in all industries – finance, construction, manufacturing, and transportation to name a few. The unemployment rate peaked at 10% in 2009 from its 5% level in December 2007.

It felt as if our very way of life with Capitalism and free markets seemed in jeopardy.

With this as the backdrop the only thing I could control were my actions on a day-to-day basis and mindset. I focused on taking actions and letting go of results, and from where I sit today (the-almost-but-not-yet-old-guy) I can attest that it worked.

Yes, interest rates are higher now then they were BUT they are not above levels seen before.

Yes, unemployment long-term might increase, but it is still well below 5% or even the 10% level of 2009 at today’s 3.40%.

Agents that are still with me here, I encourage you to keep the following in mind:

  1. People will always need a place to live – we all need shelter. (99.8% of our US population has shelter and a percentage of the group will either rent or buy a place.)
  2. There will always be a percentage of our population who will rent or buy a place, regardless of the interest rate or the economy. People die, get divorced, have babies. People relocate for job opportunities or lack of a job. All these people and others should use a Realtor and your mindset needs to be “that should be you”. 
  3. People do have jobs today so they have cash flow to spend on housing.
  4. Short term shocks delay decisions and people adjust. Interest rates spiked quickly, but are still manageable for the average buyer. People are getting used to the new rates and adjusting their budgets and budget allocations. Buyers are out there. 
  5. People can refinance in the future to lower their interest rate. Use an adjustable rate or fixed rate depending on your client’s risk tolerance, cash flow and when they think rates will come down. Collaborate with an expert mortgage professional to guide your clients throughout this process. 
  6. Inventory will remain tight so prices will remain stable or increase. As the Federal Reserve increases rates many would-be Sellers will stay in their homes due to the widening spread between their existing mortgage rate and the present day mortgage rate. This will further constrain supply and keep values stable especially in areas where land is limited for development (i.e., Moorestown and Haddonfield, NJ and the surrounding local towns). The lack of land availability will limit the increase of supply through new construction in these areas. Intensity will exist in the resale of existing homes.
  7. Some of your fellow Realtors will get out of the business. This will decrease the number of Realtors servicing people that need to rent, buy or sell a property. You will have less future competition. Can you persevere and gain market share?
  8. Action silences noise. Stop thinking about all this noise. Turn off that TV. Stop scrolling. Stop waiting. Just do it. Get into action. If you are doing it, do a little more. Make one more call or send one more text before you go home. Create a CMA a day and share it. Have ten (10) conversations a day. Overcome that inertia and build momentum. This is the mentality you need to have to flourish in this type of market. You need to do a little more.
  9. Get back to connecting with people you know and knowing your market better than anyone else. What is the number of homes for sale today? What closed this week in your market? What’s the average sale price? What does a home need to get top dollar today? How many homes are pending? What’s the average days on market versus median days on market? What is the difference between what a home lists for versus what it sells for? These are a few of the statistics you should know in the area you serve. Remember, you are a professional providing expert advice and guidance to people with one of their biggest financial investments. Be the go to expert and know your market!

So what you are feeling or thinking is normal. Wrestle with it, but I promise it will be okay if you silence the doubt through action. Now… let’s go! What is that one action you are going to take right now to move your real estate career forward?

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