What Do Fishing Boats Have To Do With The Real Estate Market?
Today, I want to have just a little bit of transparency. I have been doing a lot of talking with real estate team leaders and brokers across Northern Virginia, DC, Maryland, West Virginia, and even beyond. And the thing that I know to be true is that there is this unspoken topic simmering below the surface about how the first quarter of the year, even the first half of the year in real estate was really bad.
There are some agents that are talking about this honestly and openly. But I think the truth of the matter is that most agents are glossing over it because it is the cool social media thing to do: Everybody talks about how amazing things are and they are just unstoppable... you know the drill!
I'm here to tell you though, if you don't feel the same as the talking heads on social media ... You are not alone.
The first quarter or the first half of 2023 has been very difficult to say the least. There was a quote that I heard today and I wanted to share it with you and give sort of another background metaphor that I think helps us understand where we are at and where we are going. The quote I heard today is “During a downturn, returns are muted. (Returns on our time investment) Your actions today will yield disproportionate returns when the market picks up.” Now, this actually was right in line with something else I had heard recently.
I tell folks I tend to understand the world through metaphors. That is just how my mind works! And so somebody was talking about the real estate market as in a metaphor of fish in a pond and fishing boats looking for them.
So they were saying that the real estate market goes through a four-phase cycle and that 2019-2022, we were in a pond that had 10 fish and 10 fishing boats – this is the first phase of that cycle. There was enough for everybody to eat. Nobody went hungry. It was not a difficult market.
We then slid into what we have now and I think we are just kind of coming out of it. At this point, there are closer to six fish in the pond but still 10 fishing boats, all trying to go after those six fish. Somebody is not going to eat. Somebody is going to go hungry.
The third phase is you end up having still six fish, but having six fishing boats. Some of the fishing boats that had been there decided to pack up and move on to other waters. So you have six fish and six fishing boats. The folks that are able to weather that second phase, the phase that we are kind of coming out of at this point, are going to have the same market share opportunity as what they had even maybe before.
But here is the best part. And this is why I have so much hope and excitement for what is coming. The fourth phase is that there are 10 fish again and still only six fishing boats! More than enough for everybody!
So that is the cycle. It begins with a boom period. Then, it is a little bit of a bust period. You have not enough to go around. Then, you have kind of the flushing out of some of the agents that were not able to make the pivot. And then the last phase is the business comes back and there are just fewer agents to do the business. So, it really is a boom period again.
We are not that far away from that. Keep that in mind. I think a lot of times, we, as humans, tend to think that the status quo, the thing that we are in right now, is forever more. The truth is, this is not accurate. Keep your head up out there!
If there is anything I can do to help you really focus on your business. Start fine tuning and putting in that effort now that is going to yield disproportionate results soon. If there is anything I can do to help, please do not hesitate to reach out. I would love to meet up with you in person for coffee or via Zoom. That works, too! I hope you are well. Thanks so much.