In an April 24, 2019, article titled "2019's Best Places to Be a Real Estate Agent," WalletHub included some comments of mine in its "Ask the Experts" section. Here's what I said.
Q. Should real estate agents feel threatened by new apps and other online tools offering services to potential homebuyers?
A. Online tools will automate the simplest services provided to homebuyers. Realtors who rely on providing simple services to clients will feel the biggest impact. I liken the situation to the days of the full-service stock brokerage charging a $100 fee to execute stock trades. The internet made personal trading possible and soon discount brokers emerged charging $8 or less per trade. The brokerages that didn't adapt to the new technology disappeared. The brokerages that embraced the technology and found new fee-based services survived and thrived. The big difference is that real estate transactions are much more complex than stock trades so this works in the favor of Realtors. How many homebuyers will have the confidence to execute a home purchase on their own? The rest will require some assistance so there will always be a need for real estate agents. It will be interesting to see what technologies Realtors adopt to provide a higher level of service than they do today.
Q. How can real estate agents protect themselves from the "boom-bust" cycle of the housing market?
A. Realtors can protect their business from boom-bust cycles by learning new skills that generate revenue in the “bust" times. During busts there is always a need for appraisal and litigation support for real estate-related lawsuits. Another defensive strategy is to establish a good reputation for top notch service and high integrity. People still need to buy and sell homes during a bust period. Realtors with the best reputation will always be in demand for transactions even in the bad times.
Q. What tips do you have for a young real estate agent? What does he or she need to do to get ahead in the current market?
A. To get ahead in the current marketplace, young Realtors should do the same thing as experienced successful Realtors. Be dedicated to personal education. Learn as much about different property types, marketing and transaction types as possible. Most importantly, act with the highest level of integrity. A reputation for honesty and fair dealing will open doors to new real estate opportunities. Homebuyers will always want to do business with a Realtor having good integrity.
Q. In evaluating the best cities for real estate agents, what are the top five indicators?
A. Here are the four questions I think a Realtor should ask when evaluating the best city to conduct business:
Would I like living in this city? Will I be able to do the things that I enjoy most in life? If you aren't happy with the city you live in it will negatively impact your business.
Are job opportunities expanding in this city? If jobs are growing then more people will eventually move to the city. That creates more opportunities to succeed in real estate.
Is the population growing in this city? This is closely related to job growth. More people means more need for housing.
Does this city have an abundance of the property type I like marketing? If you don't enjoy what you are selling then it will negatively impact your business.
Q. How likely is it that the Federal Reserve will increase interest rates again in the coming months? How would that affect real estate agents?
A. I think there is a low probability that the Fed will hike the policy rate in the coming months. Slowing global economic growth will likely contribute to slower growth in the US. There are no significant inflationary pressures that would call for a rate hike. The recent decline in long term Treasury yields tells us that bond investors are concerned about future growth prospects. The falling Treasury yields are improving the prospects for Realtors because they are helping to bring down mortgage rates. In the current state of the economy there doesn't seem to be a catalyst that would motivate the Fed to increase the policy rate.