The housing market has changed dramatically since COVID-19 killed real estate back in 2020. We’re seeing skyrocketing home values, intense buyer competition, and mass relocations from urban areas to suburbs and from high cost-of-living states to more affordable states.
A recent survey of active real estate agents found that it’s not just buyer and seller behaviors that are different in 2022; agent’s job descriptions are actually changing as a direct result of the intense market growth. 9 in 10 real estate agents surveyed agree that their job is different now than it was before the pandemic.
If you want your real estate business to maintain a competitive edge (or you’re an aspiring real estate agent who wants to start strong), you need to adapt quickly to changing market conditions.
1. Embracing PropTech
Technological developments are the most obvious change for most real estate agents since the pandemic. ProTech (short for property technology) has made it easier for real estate agents to publish virtual tours online, conduct remote showings, and work without a physical office space. These changes have helped agents serve more clients in less time, increasing their efficiency.
Buyers and sellers alike are increasingly expecting digital service from their real estate agents.
82% of agents say that buyers expect more digital experiences now than they did before the pandemic, with 74% reporting that buyers are now more willing to make a home purchase based on virtual tours.
And on the seller side, 67% of agents say that sellers are expressing increased interest in virtual staging services, and 64% say that sellers prefer having buyers use Zoom or virtual walkthroughs rather than in-person tours.
Agents who understand buyer and seller preferences and have the resources to meet these demands gain an instant competitive advantage over other local agents.
2. Changing Niches
While the past year and a half has led to more business for real estate agents, with 7 in 10 agents agreeing they have more work now than pre-pandemic, it’s also created some challenges for agents working with specific niches. A whopping 88% of real estate agents say that due to market conditions, they have changed or expanded the types of properties they sell.
For example, agents specializing in working with Veterans may have noticed that fewer sellers are willing to accept offers backed by VA loans. So these agents may be expanding their clients base to other buyers who may be more likely to get an offer accepted.
In fact, 2022 has created some headaches for buyers’ agents in general. 87% of agents report that their buyers must offer more than the asking price to have a chance of securing the home. And 55% of agents report that many of their buyers’ offers are not being accepted in today’s market (typically because they are outbid or are passed over in favor of all-cash offers).
So many buyer agents are working with more sellers. Listings typically require less of an agent’s time and resources, making them more cost-effective than working solely with buyers.
The price point is another common niche that agents chose to expand to meet the changing market in 2022. 69% of agents surveyed report expanding the price points of homes they targeted. Increasing the target price point allows agents to keep up with the inflated home values, while also allowing them to earn the same commission income on fewer transactions. On the other hand, decreasing the target price point opens agents up to the flood of first-time homebuyers that are getting on the property ladder at start-home prices. Either price point strategy can be effective, depending on your personal preferences and your local market.
3. Changing Markets
Rather than changing niches, many agents are finding success in 2022 by changing their markets.
One example of changing markets is making the switch from residential real estate to commercial. And more of our survey sample chose this route for adapting to the current housing market conditions than any other route. 63% of agents surveyed report expanding or moving from residential into commercial real estate as a result of the market change.
But if you’re not interested in changing property types, you can still change markets by changing your geographic area. You can expand into additional zip codes, get licensed in another state (if you live near a state border or spend a portion of each year in a different state), or even become a referral agent, focusing on generating leads and referring them to agents all over the country in exchange for a referral fee.
Half of the agents surveyed say that they expanded their geographical focus since the beginning of the pandemic. Interestingly, agents in the Western U.S. were 26% less likely than average to expand their geographic reach. This makes sense because the low population density means agents don’t have as many clients to gain by expanding their area as agents in the higher-density Eastern Region.
The Power of Adaptability
Changing your real estate practice to meet changing market conditions pays off!
81%of agents agree that PropTech has made their jobs easier. And 95% of those agents who invested in PropTech over the last year say that they would not have been able to stay financially solvent through the pandemic if they hadn’t.
Agents who’ve taken advantage of changing niches and markets are seeing especially good results. Real estate agents who changed or expanded the types of properties they sell were 200% more likely than those who didn’t say that they will work less and make more money than they did last year. They were also 10% more likely to say that they love their job.
Change is the only constant in the real estate industry. Agents who are quick to adapt are better able to ride the waves of the real estate market and build a successful real estate career.