I’ve heard the word “headwinds” a lot lately. The literal definition, a wind that is blowing toward you and slowing your forward motion, applies when flying or sailing. When contending with headwinds, it often takes more time to reach the final destination, delaying arrival. Or it requires more power to arrive on time.
In an economic sense, headwinds come in the form of events or conditions that slow down the growth of an economy or make growth harder. In today’s real estate landscape, these can be increased mortgage rates, rising inflation or decreased housing starts.
Typically, the term headwinds is negative. But if you’re like me and have been through several real estate cycles, shifting market conditions means just that. They are changing. It doesn’t mean we have to respond in kind.
When faced with a barrage of sensational, fear-inducing interpretations of data, many real estate professionals’ knee-jerk reaction is to make a big change to overcome headwinds. A broker could decide to start paying for leads or close an office, while an agent could invest in a fancy new website.
Instead of significant changes, I recommend making smaller tweaks or adaptations as a more effective way to navigate a shifting market.
Don’t add or subtract. Reallocate
One of the changes we all experienced over the last two years was the shift to working remotely. Ten years ago, agents craved private offices because there was no other way to conduct business effectively. Today, offices aren’t as necessary for agents as they used to be.
Consumers have become accustomed to buying online rather than in person, so we have noticed a drop in walk-in business. As a broker, one of the things I am in the process of tweaking is how I allocate fixed costs like office space and staff.
In today’s new work-from-home and buy-online world, it makes sense to reduce rent expenses and reallocate those dollars so that I can bring on more support staff like personal assistants for agents and transaction coordinators.
Double down on what has worked in the past
A time of prevailing headwinds is not a suitable climate to change your overall business philosophy or strategic approach. Instead, focus on the tactics and the specific activities that have brought you success in the past.
In thinking that headwinds can slow you down, you may need to invest more time in the proven tactics that have historically helped you reach your goals. Incidentally, these are the things that are going to work in any market. What you should change is the amount of focus or effort.
Get ahead of the news cycle, and lead the conversation
Media outlets often focus on attracting eyeballs through sensational headlines and fear-based narratives. Unfortunately, their goal is not necessarily to inform, meaning we need to take on that role in educating our sphere.
Many prospective clients may be scared off by increasing mortgage rates. Get them back in the game by sharing information about interest-only loans.
At the end of the day, we must remember that while we can’t control the market, we can control our activities. Don’t get distracted. Stay focused on building your relationships, serving your clients and taking on a leadership role in your sphere.
The more consistent we are, the more we project stability, which leads to credibility and trust. We simply have to stay the course and adapt to the times. People will always buy and sell houses and need a trusted adviser to guide them.
Gavin Payne is the broker-owner of Better Homes and Gardens Real Estate HAVEN Properties in San Luis Obispo, Morro Bay, Paso Robles and Santa Maria, California. Connect with him on Facebook.