During the financial crisis of the 1930’s, my grandfather’s home building business collapsed for lack of capital. In order to make ends meet, my father, who was only a teenager at the time, had the rash idea of converting their front lawn into a parking lot for the Esquire Theater which had a full-house every weekend and no parking to speak of. For over 3 years, my Dad and his parents survived the depression through this strange, rash, yet viable idea that the desperate times of the day demanded.
Real Estate agents surviving and thriving during this financial crisis and market are finding equally strange, yet creative ways to do business. It may be time for you to consider shedding your conservative approach in this market, and trying something strange or even “rash” in order to remain viable. Let me explain.
Recent reports by the National Association of Realtors and the U.S. Government’s own housing statistics confirm that there are many places in the USA where houses are moving again. Granted, one of the main reasons that some communities in Florida and California are seeing a significant increase in sales is because prices in those areas have dropped by as much as 40%. But just about every state in the USA today has at least one or more communities where housing is not in a crisis, but is actually thriving, and moving.
Business Week recently published an article entitled “The Best and Worst Housing Markets of 2008” where they listed the two top cities at either end of the housing market spectrum, for all 50 states. For example, in Illinois, the “worst” housing market is listed as Northbrook, Illinois with a loss in home values in 2008 of over 18%. The “best” housing market is listed as Homer, Illinois, where prices in 2008 climbed by over 10%.
In California, Business Week calls the worst market Soledad, California, where prices dropped -39% this year. The best market is Palo Alto, where prices climbed over 4% in 2008. But more importantly, the article also lists Medium Home Values for each community. This is where doing something “rash” and “strange” comes in. The average home price in Palo Alto is $1,343,778, while in the “worst” market, the average home value is $227,739.
What am I suggesting? It’s simple- do something rash. If I were a real estate professional practicing in the state of California today, licensed to practice in the entire state of California, I’d be opening an office as fast as I could in Palo Alto!
You say “Well, that’s not so easy. I live in L.A. It’s a long way to Palo Alto. My family lives here, etc.”
Listen, if you are licensed in your state, you can practice all over your state! You can open an “office” in the best real estate city in your state, just by updating your website, running an ad in the local paper, and printing some business cards.
Let’s be honest- doing it the way we did it before isn’t going to work in today’s market. Farming neighborhoods and maintaining your very local presence in a very small area won’t give you enough business.
Instead, I suggest you go to where the business is. In today’s connected marketplace, you don’t have to move there. Just have a presence there. And get in on the income potential of the “best” community in your state. After all, it’s a lot easier than parking cars on your front lawn.
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About The Author: Geoff Thompson is an owner and founding partner of Colibri Real Estate, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.
