Another year in the real estate game, down! If you’ve made it this far, you’ve already overcome the likes of limited inventory, elevated borrowing costs, record high mortgage rates and well… we don’t need to rehash the past. 😅
What’s important is you got through it.
Now your sights are set on strategizing for a successful 2023 and the good news is — you’re not flying blind.
While yesterday’s challenges may look very different from today’s, any agent who’s been around a while can tell you, each market brings its own opportunities.
We reached out to the experts to recap the latest real estate trends impacting your business in 2023 and share practical tips to help you win no matter what lies ahead.
1. Mortgage rates are trending (slightly) down
Let’s start with the elephant in the room: interest rates.
The National Association of REALTORS® identified a 20-year mortgage rate high, peaking last fall in its Economic and Real Estate Outlook report for 2023.
Despite 2022’s record-breaking figures, rates are predicted to decrease in 2023 as each quarter elapses, ultimately hovering between 5% and 6.2%.
Homeowners who would have been inclined to list their homes in hopes of upgrading or downgrading are holding off on their decision to sell — at least, for now.
Briggs Elwell, Co-founder & CEO of RLTY Capital, explains, “Once rates stabilize buyers will accept reality and re-enter the market.”
He predicts that when buyers begin contemplating their loan options, we could see more refinancing. “The biggest opportunity right now is buyers getting the dip with the intent of refinancing down the road.”
Now may be a good time to reach out and discuss refinancing as an option with the folks in your database and sphere of influence. The right financing plan could give buyers the confidence they need to take their next step.
2. Buyers have their power back
The ball is no longer exclusively in the sellers’ court.
Though finite inventory and increased interest rates will continue to challenge buyers in 2023, there is now some room to breathe.
“The trend of multiple offers may continue however the caveat will be that people will not pay above ask in a frenzy. Buyers should be able to negotiate a little again mid to late year,” says Rena Kliot, Broker & Founder of Pulse International Realty.
“Since I feel that we will still see multiple offers on properties but more of a cap on pricing, the terms offered will carry even more weight and agents need to address every aspect of the offer, not just focus on price negotiations. Deals are multi-tiered and this coming year more than ever, attention to detail will be the way to lead a client to success.”
Fine-tuning your skills to include buyer-centric practices is essential for a healthy book of business in the new year.
As Marcia Gehrt, Director of Training/Recruiting with the Minnesota-based Enclave Team, will tell you, “History has shown that great agents grow their business during these tough markets as that's when sellers and buyers see the value of a professional, experienced agent.”
Your position as an industry expert enables buyers to benefit from your years of negotiation experience, not to mention your relationships with lenders and local vendors.
Since buyers aren’t out of the water quite yet, your professional expertise and connections as an agent matters even more. It could even mean the difference between a satisfying home buying experience or (dun dun dun) buyer’s remorse.
3. WFH relocation is an ever-present reality
Work from home (WFH) has revolutionized the term “work-life balance” and reset the creature comfort requirements for a variety of homeowners and first-time buyers.
What might’ve sufficed as a WFH-friendly residence before the remote work boom has come under increased scrutiny as buyers re-evaluate their needs.
With 70 million full-time workers reporting that their job duties can just as easily be performed remotely and five in 10 already working a hybrid schedule, this is one trend that won’t be going away anytime soon.
CEO and Founder of LBC Mortgage Alex Shekhtman notes, “The continuation of remote work will also impact commercial and residential real estate trends in 2023, with agents needing to adjust their strategies in order to remain competitive.”
“To stay ahead of these changes, agents should think about upscaling their sales funnel by harnessing creative marketing tactics such as using video content and other innovative solutions that provide potential buyers with a window into a space before they need to buy or rent it.”
Real estate agents who use digital solutions to help prospects find their dream environment to both live and work in will be positioned one step ahead as we move into the new year.
From live video walkthroughs to maintaining an active and appealing online presence, landing the right home for buyers will require an updated bag of tricks.
4. Off-market opportunities may become more common
With inventory expected to remain stagnant for most of 2023, real estate professionals may want to devote more attention to spotting the possibilities in their own backyards.
“There are still many overpriced properties on the market and these sellers are not being realistic in price, so off-market is in very high demand now,” Josh explains.
FSBOs, rental properties, and homes with unkempt landscaping and signs of disrepair may signal opportunities worth pursuing this year.
Take time to discover what’s available in your area and get ahead of this trend with the right off-market strategies.
5. Amazing agents won’t need an amazing market
Every business has its patterns and real estate is no exception. The only thing you can control is your reaction to those shifts.
“The market doesn’t need to be amazing for you to be an amazing agent. In fact, people need you more when there is uncertainty,” says Taylor Hack, Team Leader & REALTOR® at HACK&Co at RE/MAX River City.
Taylor believes “connection over transaction” is the key behavior for successful agents in 2023.
“The recent real estate market has been very transactional where client relationships are short and intense. In that high activity environment, every real estate agent is playing further down the sales funnel to where people are taking action right now. The agents that continue in this reactive position are going to be outplayed by agents that are proactively connecting to people engaging real estate long before they take action.”
With the market in its coolest state since pre-2020, now is the time to redirect your focus.
Remember, your real estate pipeline is a living, breathing entity. Now that you’ve got a minute to pause, consider reevaluating your lead management workflows to deliver on the needs of prospects in the current market and invest in making the right connections at the right moment.
Given the ubiquity of lightning-speed deals in the last three years, the additional legwork of getting to know buyers early in their home buying journey may feel tedious at first. But with the right lead management platform and automations, it doesn't have to take hours to nurture your database.
Set aside time to update your CRM with the right automations and you’ll make it easy to stay in touch with your sphere, reach out to buyers at just the right moment, or even connect with prospects viewing your website listings in real time.
Bonus tip: The right technology is no longer a trend
Client relationships and the dogged hunt for customer satisfaction have replaced speedy above-asking deals. Seasoned real estate professionals are dusting off their tried-and-true tactics to get back to basics with relationship building and continue producing results.
“We’re focusing very intently on making sure our agents have the skills necessary to navigate difficult conversations with their clients, and also helping them understand that they may need to work harder and do more lead follow-up just to sell the same number of homes that they sold the year before,” says Michael Smith, CEO & Broker-In-Charge at South Carolina based Bluefield, LLC.
Though none of us has a crystal ball, agents can prepare themselves for the seasons ahead through relevant knowledge and well-structured systems that make a genuine impact with prospects and clients.
“We believe that agents can use a slow period in the real estate market to take the time to get their ‘house’ in order,” says RLTY Capital’s Briggs Elwell. Utilizing the power of evolving technologies as a part of your 2023 strategy will raise your chances of meeting the needs of new clients.
Don’t be afraid to research and test new systems while there is space and time to do so. Find what works for your business and set up the right workflows and sequences to best serve your clients, without having to work twice as hard for the same results.
When you’re ready to uplevel your lead management workflows, Follow Up Boss can help. Find out how an open CRM system can help you scale your business, or hear from the hundreds of top producers on how they use Follow Up Boss to close more deals in less time.