As a real estate agent, you want to be a trusted resource for your clients. You want to have the insights and experience they need to help them navigate changes in the market and better understand the ups and downs that naturally arise in the real estate sector.
Real estate agents understand that a market cannot perform well perpetually. A natural rise and fall in prices always occurs. When you start to see signs of a market correction, you want to know how to connect with your clients and prepare them so they can make the best real estate decisions for their individual goals. This insight will help you continue to provide clients with outstanding service they can trust.
What is a “real estate market correction”?
A real estate market correction can generally be referenced when the value of homes falls 10–15% below the market average. When the value of homes starts shifting like this, it can cause changes in how buyers and sellers look at the market and how they plan their real estate transactions.
Within the luxury housing market, noting these changes has particular significance. Changes that indicate a market correction are often felt particularly strongly in the luxury housing market. Typically, this sector sees the first signs of value reduction and home values see the most dramatic changes in price. Therefore, buyers and sellers will want to make sure they fully understand these conditions as they evaluate the market.
The luxury real estate market: How to prepare for changes?
Before you speak with clients about an impending market correction, you’ll want to make sure you have adequately prepared yourself for the conversation. Luxury home clients will likely want access to detailed information about the current economic conditions and how it compares to similar past experiences. Here are some key pieces of information you will want to have available:
1.) Current housing market data that explains performance
Many clients will have already seen signs that prices have begun to drop, but they want to know how it will impact them and by how much. You’ll want to come to the conversation prepared with relevant market data specific to their property. Offer them insight, such as how long similar homes have sat on the market in recent days, the call rates for different properties in similar markets, and any substantial price adjustments that other homes in the area have utilized. Providing your clients with this data can help them see how their property fits into the broader market pattern.
2.) Interest rates and stock market data
Clients will also likely want to see data and information related to shifting market conditions and how the real estate market influences, and is influenced by, factors such as interest rates and the stock market. Just like any other buyer, luxury clients know that interest rates will impact the value of the house they can buy, and following interest rate data can help them evaluate the current trends.
Luxury buyers also generally have sizable portfolios of investments on the stock market, and many will look at their investments when evaluating their liquidity and the assets they have available. Therefore, buyers want to know how the stock market trends align with the real estate market.
3.) Past real estate market corrections
Finally, you’ll want to prepare so you can come to the conversation equipped with information about how your area and the luxury real estate market in your region fared during past market corrections. Data about how low prices dropped and signs of the turnaround can help clients evaluate their current position in the correction and how they can benchmark the current situation. For example, you might use data points from the 2008 Great Recession and let clients know how their market is currently performing compared to that time period. These benchmarks can help buyers and sellers feel more confident in their decisions.
How continuing education can help
As you prepare to work with luxury clients, remember the importance of continuing education. These courses can help you not only better analyze housing market conditions, but can also help you learn strategies for working more effectively with your clients. Real estate continuing education gives you the chance to grow as a professional and supercharge your career.
For more information, visit https://www.colibrirealestate.com.
Tina Lapp is head of customer experience and instruction for Colibri Real Estate. With nearly 30 years of professional education experience in the real estate sector, Lapp empowers aspiring and seasoned professionals to thrive in their careers. Lapp was inducted into the RISMedia Newsmakers Hall of Fame in 2022.
