How to Succeed in a Changing Market
Real estate professionals deign to understand the future, because foretelling market moves can lead to riches and avoid ignominious losses. This is the time of year when the experts take out their crystal balls and make predictions about the future of New York City real estate. Unfortunately, the feigned omniscience and artful vagueness of the pundits has the accuracy of a coin flip.
Foretelling the future correctly and consistently is impossible for several reasons. First, there is just too much information available. While there are endless ways to slice and dice data, additional information increases confidence but fails to improve the accuracy of predictions. Second, the New York City real estate market is influenced by myriad variables such as interest rates, fuel prices, events like Sandy and 9/11, and political caprice. Projections and oversimplifications render the prospective models impotent and create inaccurate predictions. Finally, the unpredictability and inherent bias of human behavior further distorts prognostications.
The following ways can help you succeed in a changing market.
Brokers need goals and a plan that defines their activities, key activities and expected results. Those who possess a clear appreciation of their strengths and play to them will always be successful. Brokers must have clear income and deal volume expectations—what they will do next year, how many appointments they will go on and how many calls they will make. They need to know the ratio of calls to meetings, meetings to listings and listings to closings.
Planning creates clarity of purpose. Perhaps the best antidote to uncertainty is sound and steady judgment. Over time, despite the vagaries of the real estate market, the most successful organizations and individuals apply consistent discipline. They understand their exposure and adjust their strategy. An unpredictable future is dissimilar from an unmanageable one, and while uncertainty creates, risk it also generates opportunity.
2009 was a lost year for many brokers. However, the best brokers executed their plan, and while it was a difficult year financially, they continued to communicate with their clients. They chose to communicate and take action while others did not, and for the last several years, these brokers have reaped the rewards. There is no such thing as a downturn or slow time for brokers—just opportunities to differentiate. Look at the holiday season as an opportunity for deepening relationships.
Recognize the variables that matter most to you. The Brooklyn housing market is not overly relevant if you specialize in Soho retail. Narrowing and simplifying your concentration will identify the critical success drivers and improve complex decisions and predictions.
Know your biases and blind spots. Do the activities that will make you successful like canvassing and networking and not merely the ones you enjoy. Whether bullish or bearish, by understanding your orientation, you can balance your viewpoint with disparate ones. Balancing different perspectives produces better decisions.
Make active choices. The ability to intentionally make decisions and choose is a huge differentiator and provides control. Too many brokers let inertia drive them forward. Fight the urge to go with the flow and lead yourself. Economic forecasts are entertainment. Do your own thoughtful analysis. You know your business model, strategy and markets you serve better than anyone else.
Each individual property in New York City is unique. Money can be made in all types of markets. By positioning your property for its highest and best use and executing your plan better than your competition, you can create value in any market.
Although the future is unknown, it can be effectively managed, and these tips can help you do just that.