What Challenges Are Facing the Real Estate Industry?
The real estate industry witnessed an unprecedented boom during the pandemic, but things are starting to slow down. Mortgage rates soared in 2022 and just began backing down at the end of 2022. Home prices also began falling to somewhat normal levels, but as anyone in the real estate industry can tell you, we’re not quite out of the woods yet, and sure to face some challenges. Here’s a look at the top issues currently unfolding along with some advice on working around them.
1. Too Few Listings
Real estate agents and investors alike may be feeling the pressure to perform now that fewer homes are going up for sale. Sellers know it’s a slow market and with home values down, it just doesn’t feel like prime time to list property. Regardless, there will always be homes for sale even in the worst of times. What you need to do to get ahead of this challenge is up your prospecting game.
Finding off-market properties is essential to cornering the local market. Using a tool like ProspectNow can help you find homeowners who may be interested in selling due to life changes or affordability issues. Contacting them sooner than later will keep you top-of-mind if they decide to list.
On the other side of the equation, if you’re an agent trying to help buyers find affordable homes in this uncertain market, collecting as many listings as possible will help you get more leads. Networking with other agents and sharing the listings you find that others are posting can make you a valuable partner for anyone looking to buy a home right now. Consider curating a list of affordable homes in the area and really catering to what your buyers need right now, whether that’s move-in ready properties or fixer-uppers.
2. High Lead Acquisition Costs
With demand down, finding leads in the real estate industry is getting increasingly more difficult. This means your cost of acquisition is going to go up, which will eat into your profits if you don’t keep your conversion rate high. If you find that your cost of acquisition is increasing, there are a few ways to bring it down:
- Invest more time in organic marketing so you can collect leads without buying them.
- Look at the cost of buying leads from key marketing channels, like Zillow, and consider trying new avenues.
- Focus on nurturing every lead you get to increase your conversion rate, which will bring down the cost on the other end.
Potentially the worst thing you can do right now is pause or scale back your lead acquisition campaigns. After all, those in the real estate industry need all the business they can get right now. However, if you find that your campaigns are bringing you too many leads to effectively nurture them all, that might be a reason to reduce your ad spend. Still, your main goal should be converting more leads overall.
3. Inadequate Conversion Funnels
The boom the real estate industry saw over the last two years created some laziness in many professionals’ workflows. While competition grew throughout the pandemic, the sheer number of opportunities was insane and meant finding and closing deals was simply easier. Now that there are fewer opportunities to be had, the competition is fierce, so everyone has to up their game.
An inadequate conversion funnel can contribute to high acquisition costs and lower conversion rates. Plus, building out your funnel won’t just help these metrics, it can also help you create a stronger, more recognizable brand for yourself. The key to sealing the leaks in your funnel is to get to know your ideal lead right now — and they probably look very different from the people you were serving mid-pandemic.
Think about who your leads are and what their top priorities are right now. Buyers might care most about affordability. Sellers might be working on a tightened timeline before home values dip again. Renters might be looking for somewhere that promises clean, safe housing where they can lock in a good rate for a year or more. Catering to your ideal client’s needs will give you insight into the messaging, offers, articles, and calls-to-action you need to develop to finish your funnel.
4. Failing to Use Technology
Given the recent high volume of opportunities in the real estate industry, many people entered the industry for the first time, perhaps with no background experience or training. Meanwhile, many people who have been in the industry for awhile began to alter their processes and leave some steps out since it was easy enough for them to keep hitting their profit goals thanks to high demand. Now that those circumstances have gone away, it’s important that we find our way back to process optimization, which means leveraging technology.
Advancements have led to the development of some incredible tools in the real estate industry over the past few years and you should be looking to leverage them to help you find, nurture, and convert leads. Sales pipeline software is a great example, providing visibility into all of your open opportunities and where leads stand in the funnel. However, with more effort being poured into prospecting now, it’s important to find smart tools for that, too.
ProspectNow can help you find and qualify leads in the real estate industry quickly, whether you’re looking locally or nationally. By giving you rich insights into property information along with relevant data about the owners, taxes, sales history, and more, you can use ProspectNow to consistently feed new leads into your funnel with less legwork.
5. Forgetting Your Network
With so many challenges facing the real estate industry today, perhaps the most powerful piece of advice you can take to heart is the importance of leveraging your network. Now is a great time to start growing your network, but it’s also smart to start sharing value with your colleagues, as you’ll only be able to get out what you put in.
Real estate agents and investors should continue networking with a variety of community service providers who may have leads for them, including general contractors and real estate investors. Of course, nurturing this network is key to leveraging it, which means staying in touch with the people who send referrals your way and reaching out to everyone else to stay top-of-mind in case they run into someone.
If you’re not already using professional networks, like LinkedIn or your local NextDoor community, these are great tools for growing your network and getting in front of community members who may be interested in buying or selling property in the months to come. Offering them valuable advice and resources can build your reputation and trust, too, making people more likely to turn to you when they need the help of a real estate industry professional.
How ProspectNow Can Help
There’s no shortage of challenges to overcome in the real estate industry, but the good news is that plenty of tools exist that can help you make the most of the current market. Using ProspectNow, you can save time prospecting and find more qualified leads in less time thanks to powerful data modeling and automation. Plus, it’s extremely easy to use, so it won’t take away from your busy work day.
Are you interested in learning more about how ProspectNow is helping the real estate industry stay in motion? See for yourself with a free trial!