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Over the past two years, there were so many buyers and sellers that real estate agents could almost get by on their good fortune, Keith Pike said.
“The activity was just so hyper that agents didn’t really have a lot of expectations of a brokerage, because the business was just easy to come by, to be honest,” Pike said.
But as the market slowed in recent months, the broker-owner for RE/MAX Elite in Arkansas said that agents have been expecting more from their brokerages — more training, more resources and more development opportunities.
Pike’s comments came Thursday during a Connect Now virtual session with Donnie Pingaro, managing broker for Side in Florida.
The slowdown wasn’t unforeseeable, according to Pike. Industry experts knew that the high-flying home sale numbers of the early COVID-19 pandemic couldn’t last forever. But what did take the industry by surprise, he said, was just how quickly the sales activity fell back to Earth.
“In June and July, the market was screaming,” Pike said. “And just a few months later, it’s at a screeching halt.”
Pingaro said that over the last year or two, there was so much transaction volume that inexperienced real estate agents could make a significant amount of money. That will be harder for them going forward, he argued.
Instead, the top agents in each market may be best positioned to scoop up even more market share due to their experience and knowledge, Pingaro said.
“There are going to be highs and lows,” Pingaro said. “But the demand is still there. Houses will still be sold. And we believe that this time, historically speaking, in more of a downward market as it changes, top agents are going to pull away.”
In the Arkansas markets where Pike works, transaction volume is way down even as home prices have been a bit more stubborn to fall. Previously, in the high-transaction environment, agents were focused on getting leads. These days, a lead is less likely to pay off, he said.
“So agents are having to refocus, instead of on the transaction, on relationships,” Pike said. “If listings are sitting on the market longer, you have a relationship with that seller for a whole lot longer. There’s a lot more hand-holding.”
In light of this, Pike says it’s more important for brokerages to focus on training agents in areas that were not high priorities in the previous market frenzy. Subjects like building client relationships and even foreclosures and short sales may be useful skills for some agents in the months to come, he said.
Brokers and teams should also use this market as a reminder to focus on how their business could be better structured, Pingaro said.
“For many, many years, real estate agents, in general, were not trained or guided to build it as a business,” Pingaro said. “It was transactional. And what we’ve done at Side here from day one is put our chips all in on the top agents.”