For the past 20 months or so, the real estate market has been in a state of upheaval.
In reality, it's been a state of upheaval for about four solid years now, since the pandemic and subsequent rate cuts unleased the biggest real estate surge since the Oklahoma Land Rush of 1889.
We all know what happened. Two years of record money printing, deficit spending and supply chain issues caused the inflation monster to roar, driving up the cost of living and prompting the Fed to slam on the brakes with the fastest series of interest rates increases in modern history.
I called it the Crash Test Dummy Market.
For nearly two years, transaction volume has been cratering. In the Denver metro area, there were 64,000 closings in 2021... about 51,000 in 2022... and just over 40,000 in 2023... representing a 36% drop in sales (and commission checks).
Agents, lenders, title reps, stagers, inspectors and appraisers have all left the business in big numbers. Many of the survivors are still wandering around like accident victims, trying to figure out what just happened while holding out for the next big market surge.
Like many of my colleagues, I have fallen into the trap of sometimes saying my business has declined by 20%, 30% or more depending on how I'm feeling on any given day.
That's not the way to look at any of it.
The market we have today is the market we're going to have for a while, in my opinion. Rates are elevated and it's my contention they are likely to stay that way until something in the economy seriously breaks or the government dials back its deficit spending.
Hoping for lower rates is not a strategy.
The reality is, if you are an agent, you need to look at the 41,000 transactions inside the marketplace last year and assume that's the new baseline. We're not going back to 50k or 60k transactions unless rates go back to 3%, and that's not going to happen.
So rather than say your business is down by some percent (and feel glum about it), the better way is to be grateful for the market we had and to say that, in the old market, your business was actually UP by some huge amount.
My hope is, for those of you still struggling to come to terms with the new reality, that you saved some money, lived conservatively and didn't buy a bunch of dumb stuff. If you did, then your anxiety level right now is fully justified.
But if you lived within your means, understood it was only going to last for a season, and are prepared to let go of your old paradigms... your transition into the new reality will go much better.
The season we are in calls for evolution, innovation and determination. Nowhere on that list is sadness, remorse or regret. You've got to shift your mindset into moving forward and not looking back, because every moment you spend looking back causes you to fall further and further behind.
