Purchasing real estate is one of the most significant decisions in a person’s life, and as a real estate agent, it’s your job to guide clients through the process with care and confidence. In other words, it’s a big responsibility, but it can be rewarding both personally and financially.
So you’re up for the challenge, but you want to get a sense of what’s ahead in 2020 so that you can make your career decisions strategically?
Here’s an outlook on the job market for you in the years to come.
The housing market
The housing market ebbs and flows just like every other financial market. In 2018, Realtors saw a stall in demand for new housing. By January of 2019 however, buyers were once again lured in by low mortgage rates. Those rates spiked demand once again.
The Federal Reserve announced earlier this year that it would hold the federal funds rate between 2.25 percent and 2.5 percent. They attributed the decision to a strong labor market and robust economic activity. Federal Reserve officials indicated in March that they were keeping those rates and unlikely to raise them again this year.
However, the federal funds rate is just one relatively unpredictable factor impacting mortgage rates. More immediately for Realtors, housing inventories remain low. Again, things change, but currently the market is expected to cool down.
Stay competitive with tech trends
As with most other jobs, agents need to keep abreast with new technologies to stay competitive in a changing market.
As of now, you almost definitely have a smartphone, which will continue to be a vital tool in your job. And new devices keep adding more useful functionalities for Realtors. For example, new versions of the iPad Pro will boast better augmented reality support. AR has incredible potential for staging, and with the iPad Pro’s ultra-thin design and Group FaceTime feature, it’s clear your tablet will play an important role in future work.
Beyond tablet technology, you can also use social media to brand and expand your business, sharing updates and photos of your listings with potential buyers. To that end, Realtors can use their phones to search for listings, keep in touch with clients, speak to new ones and more.
Between 73 percent and 76 percent of Realtors use social media professionally, according to the National Association of Realtors (NAR). Social media is also one of the top three tech tools that provides Realtors with high quality leads, according to NAR’s report, 2018 Real Estate In A Digital Age.
If you’re in real estate, you should have an understanding of how to use a smartphone and other forms of emerging technologies that are transforming the industry. Don’t be deterred by this hurdle though. Even if you’re not familiar with modern tech, take some time to find someone who can train you.
Most careers in real estate won’t instantly take off. For newbies, it’s all about establishing a reputation. This means putting in lots of time networking, making calls, leading showings, helming open houses and more until you make that first sale — and the first paycheck.
Within five years, most agents will have established their place in the local market. Their former customers will refer them to future clients. They might even have repeat buyers and sellers.
As of 2017, the median gross income of Realtors was $39,800, according to NAR. The Bureau of Labor Statistics’ website also provides a lot of useful information, statistics and a good summary on the outlook for this profession.
Of course, a Realtor’s salary grows or decreases around their commission, so your bottom line will ultimately be in your own hands.
Brokerage and M&A landscape
The ongoing exploitation of emerging technologies to restructure the real estate industry is definitely something you want to keep an eye on.
In its 2018 financial filings, the brokerage Redfin stated, “Our long-term goal is to combine brokerage, mortgage, title services and instant offers into one solution.” With heated competition from Zillow and Opendoor, Redfin is racing to become a one-stop shop.
As for M&A activity, the venture-backed brokerage firm Compass recently purchased Alain Pinel Realtors, its third major acquisition of a Bay Area competitor in eight months. It was another significant acquisition that elevated Compass to its current position as one of the nation’s largest residential real estate firms, based on transaction volume.
Concerning other areas of M&A, real-estate investment trusts (REITs) have shown promise in 2019. Experts predict that REIT M&A activity will match or even exceed last year’s level. If you’re involved with REITs, you might remember that REIT M&A deals last year reached their highest monetary mark since 2007, and the outlook remains positive.
A recent Wall Street Journal analysis of annual pay disclosures found that REITs had some of the highest median worker pay among financial, real estate and insurance companies.
Real estate is an ever-changing business, but for some, the ups and downs are part of the allure. Staying on top of the changes with consistent eagerness to learn, evolve and pivot if necessary will position your career for long-term success.