New year’s resolutions are funny things, aren’t they?
The promise to be a better, more virtuous version of yourself.
To get everything right, ‘this year will be different, I promise’.
The outlook for the start of 2023 is certainly different from the same time 12 months ago, but not that different to the end of 2022.
We are now used to the fact that we’re operating in a slower market, but in the spirit of having a positive mindset and starting the year with a bang, what can we focus on to drive ourselves into 2023 with a thrust of energy?
There’s an interesting statistic that about 30 per cent of our industry is new to real estate, having started their careers during the boom market.
That means one-third of us don’t necessarily understand how to pivot to operate in a more normal marketplace.
We have moved out of a ‘reactive’ cycle where the work has simply shown up.
We are now in a ‘proactive’ cycle meaning we return to the normality of being a real estate agent. We have to find work.
Finding the work turns up in a variety of ways and based on the current data, we need to create activity at both ends of the sales funnel.
While we know that processing sales has become tougher due to seller price ambitions being tied to 2021 prices, we are also seeing a shortage of new listings coming to market.
We need to create flow around stock in and stock out.
It’s easy to become daunted and feel like a failure when being told by a variety of voices what the most important piece is to focus on, but I’d like to share the three key metrics you need to focus on to keep the wheels in motion and gain momentum in 2023.
With a reactive mindset and a booming marketplace, the need to monitor the pipeline of future sellers was less important.
It has now become of utmost importance to creating a healthy flow of stock coming in.
Pipeline relies on three key components to be effective.
- Volume – do you have enough opportunities to win some and lose some?
- Accuracy – do you fully understand the situation of the potential sellers, their timeframe, ambitions, wants and needs?
- Conversion – are you able to secure the business when it is there to be had?
A great exercise to start the year is to do an audit of your pipeline, including how many future sellers are you working with?
Once you have your starting point, it’s a great focus to continue to grow and nurture.
Days on market
With the market slowing, days on market are increasing.
While some fail to see the issue with this, the best understand that this is one of the critical markers to losing capacity and can be the cause of your business going backwards.
Managing days on market starts at the listing table, setting up the sellers expectations around how frequently you should address pricing and marketing strategy.
However, if you find yourself stockpiling and are unsure of what to do, remember it’s never too late to reinvigorate your campaign.
Change of selling strategy from private treaty to auction and a constant review of listing price are the best strategies to keep the listing moving and create urgency among buyers.
Linked to days on market is your clearance rate – the rate at which you can sell stock.
In a healthy market, most agents will turn over stock at a 70 per cent-plus rate.
Currently we are seeing some agents drop below 50 per cent.
When the days on market become long and agents feel sellers aren’t motivated to meet the market, often they lose energy around the stock, avoid having tough conversations and this leads to the property being withdrawn and often moving on to another agent.
Interestingly, second agents generally turn over stock at an 80 per cent-plus rate.
Keep a keen eye on your clearance rate and days on market to ensure you can continue to trade well through the correcting market.