In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic.
Now that the election is over, a mid-career agent plans to shift her efforts to better align with President-elect Joe Biden’s housing plan, which focuses on low- and middle-income Americans becoming homeowners, down-payment credits for first-time buyers and fighting racial discrimination in housing.
Her broker appreciates her getting ahead of the curve, but also advises her to stay focused on homes and neighborhoods in the higher price ranges.
If there’s one thing we can all pretty much agree on, it’s a general sense of relief that the 2020 election is over. Whether we’re talking about foreign exchanges, stocks or housing markets, uncertainty is an enormous challenge, and it’s nice to have some sense of clarity — regardless of one’s political leanings.
With former Vice President Joe Biden as the clear president-elect, and his party retaining one house of Congress, it’s safe to presume that his housing policy will shape our real estate industry for the next four years.
In reviewing his plan, we can see a clear focus on helping more low- and middle-income Americans become homeowners through meaningful down-payment credits for first-time buyers and by eliminating systemic racism with respect to housing.
Obviously, fighting the COVID-19 pandemic and getting the economy back on track will be major priorities for the administration, and successful housing policy will be reliant on those issues. But assuming improvements on both of those fronts take shape, I believe it makes sense to transition my business in a way that aligns with that policy.
While my focus has been on higher-end homes in what would be described as upscale neighborhoods, I see tremendous value and opportunity in these emerging sectors, especially as people get back to work and our sense of normalcy resumes.
Kudos to this agent for her vision and optimism about our nation’s post-COVID economic recovery. The signs would indicate an extraordinary opportunity for more Americans to become homeowners under the new administration, particularly if interest rates remain as historically low as they have been in recent years.
But instead of completely shifting her business focus from one market segment to another, I would advise a more balanced approach. If her focus has been on higher-end homes, and she has enjoyed success, she should keep a flag firmly planted in that sector.
Selling just one luxury home can pay one’s bills for a long time, and I find that these clients typically employ attorneys who can make the agent’s job even easier. No need to completely abandon this sphere altogether.
That being said, the business of middle-class homes is more reliable, predictable and steady. They sell much quicker than luxury homes, and I believe in units over volume. Also, these homeowners tend to be quite agent-loyal — once they experience the American dream of homeownership, they will call that same agent again when it comes time to upgrade.
How to resolve
A wait-and-see approach would seem to make the most sense for this agent. There is no guarantee that the pandemic will be resolved in a meaningful way next year, and the economy may take several years to crank back to life.
If the agent feels confident about the strategy, however, she might consider first observing which housing policies actually get passed and gain traction in her respective market before slowly shifting any of her resources and tactics to an unfamiliar market.
Anthony is the broker-owner of RE/MAX Advance Realty in South Miami and Kendall, where he leads the activities of more than 165 agents. He is also a working agent who consistently sells more than 100 homes a year. For three consecutive years (2018, 2019, and 2020), Anthony has been honored as the “Managing Broker of the Year” by Miami Agent Magazine’s Agents’ Choice Awards. NOTE: Anthony is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.