As we predicted in our housing market expectations for 2023, many markets across the U.S. are currently “correcting” to slightly lower home prices than we saw last summer. This type of market correction is to be expected after periods of excessive growth (like we saw during the pandemic).
While correcting markets are a normal part of the economic cycle of real estate, they are giving some would-be real estate agents pause. If you are wondering about starting your real estate career during a market recession, this is the article for you! We'll explain the benefits of launching your career in a slower market and give you three critical tips for getting off on the right foot.
Benefits of Launching Your Real Estate Career During a Market Correction
Here are the advantages of starting your new real estate business while the market is correcting:
You are going to learn the art of lead generation. Agents who joined the industry when everyone was buying and selling found leads in their laps, so they may have skipped lead-gen.
You may have less competition as fair-weather agents exit. Those who were in the industry to make a quick buck might not be willing to put in the work to become a seasoned professional.
A slower market allows you time to strategize your business decisions. Agents who joined the industry barely had time to record their outgoing voicemail greetings, let alone create a business plan for a successful career launch.
You’ll be well-positioned when the market rebounds. Learning to generate leads and earning your first sales when the market is slower will set you up for even greater success when the market inevitably heats back up.
To help you get off to a solid start, here are three tips for starting a successful real estate career during a housing market correction.
Tip 1: Find People Likely to Buy and Sell During the Correction
Certain demographics are more likely to buy and sell during a market correction than during a market boom.
Here are a few market-correction-friendly groups to focus on:
Renters. To sway on-the-fence renters, educate them on the benefits of homeownership and explain how they can refinance if rates drop in the future.
Investors. Investors may be looking to expand their portfolio while there is less buyer competition.
Employee (or military) relocations. Even in a correcting market, people relocate for work or for military reassignments. Try working with corporate relocation departments to get leads on workers or service members who are coming or going.
Life-event sellers. Many homeowners don’t want to give up their low-interest rate mortgages for a new home loan with today’s higher rates. But certain life events, like new babies, marriages, divorces, or deaths may make a sale worthwhile.
Tip 2: Spend Wisely
Slower markets can mean fewer sales. And that can mean fewer commission checks. This makes it even more important to carefully budget your start-up business expenses.
Some quick tips for spending wisely:
Take your real estate courses online, rather than taking the more expensive in-person classes.
Save money on marketing materials by purchasing customizable templates on sites like Etsy.
Build your own real estate website rather than paying an expensive designer.
Use social media for free exposure for your new business.
Track your expenses for potential money-saving tax deductions.
Tip 3: Diversify Your Real Estate Income
Some people are afraid of taking the leap into real estate because of the commission-only pay structure. You know that the income potential is unlimited, but if there are fewer sales in your market during the correction, will you be able to make enough money?
First, you should know that, as long as you keep your pipeline full of leads, you should be able to make a nice living in the industry.
But, we know that some people are more cautious than others and prefer more financial stability. If that sounds like you, consider the ways in which you can diversify your income in real estate:
Start as a property manager. Many companies hire salaried property managers for residential or commercial buildings.
Start as a rental broker or leasing agent. If sales are too slow for your comfort level, shift your focus to renters, who move more often. Plus, some leasing agents are paid hourly with bonuses for signed leases.
Offer tertiary real estate services. Notary services, for example, are often needed for the paperwork in real estate transactions. Or you could offer credit repair services to help your future buyers qualify for a home loan. Or you could expand your network of homeowners (future sellers!) while creating a separate stream of income through property tax appeal services.
Launch Your Real Estate Career Today
Are you ready to join the millions of professionals around the world who enjoy the flexibility and earning potential of a career in real estate? Start your new career today by enrolling in your online real estate course to earn your license.