The real estate market like the stock market fluctuates and has its ups and downs, which are largely based on the economy. As of now the real estate market is in something of a decline in the first few months of 2006, sales of existing homes fell by 6%. And many first time buyers have found that they are simply being priced out of the market as the average cost of a home in the United States now hovers around $230,000.
Even a slight rise in interest rates can affect the housing market as larger numbers of potential homeowners are then unable to purchase a home, because of higher monthly payments. Research shows that around 60% of realtors consider the biggest potential threat to their business over the long term is the possibility of unexpected dips in the economy. In order to successfully protect your real estate business against dips in the market, you must regard real estate as a long term investment rather than merely a short term source of income. Like any successful and profitable business, your real estate business must be able to thrive even in a period of economic depression.
Real estate agents often refer to this concept of ensuring constant positive cash flow as the future income stream, meaning that even in a slow housing market or a recession, you are assured leads and referrals and ultimately profits in your business. Becoming market-proof means that your real estate business can thrive even in slow economic times by concentrating on the long term objective. One way to guarantee a profitable future income stream is to follow up with leads, cultivate referrals, and invest in real estate at every possible opportunity which many realtors tend not to do.
Despite the uncertainty of the industry, real estate traditionally has a reliable rate of return over the long term and real estate investment also offers excellent tax advantages. Flexibility is perhaps one of the most important assets for a successful real estate business. To be able to thrive, a realtor must be able to change as the housing market changes, adapting to new trends both positive and negative. Today, successful realtors must also take advantage of the increased technology available and the ability to conduct business when away from the home or office. A well designed and easy to use website is today a basic requirement for long term success as a realtor. One possible approach to long term success is to consider diversifying into other aspects of the industry, and becoming a specialist in a particular field.
As an example, the multi housing and apartment markets are traditionally more profitable and stable even in troubled economic times. The market for newly built houses is still strong, going against the general trend by increasing in the first part of 2006 and still offers a relatively safe opportunity for long term financial gain. Buyers are being enticed into purchasing a new home with such things as upgraded kitchens, free televisions and other incentives. The housing market for Hispanics and other minorities is another example of an area of specialization many minority groups are becoming more established, getting better jobs and thus are more likely to be able to afford to buy homes. Many realtors realize the long term potential of commercial real estate and concentrate exclusively on that aspect of the business. If you have the ability to relocate or to conduct real estate transactions in other parts of the country, certain areas of the country traditionally have a stronger housing market than others.
Some states that have seen double digit gains in home sales recently include Texas, North Carolina and New Mexico. Networking and marketing go hand in hand and both are a vital part of any real estate business. Marketing can be anything from small but significant personal touches or services purchasing a gift for a buyer to aggressively courting prospective clients. Building a strong client database can help to bring in prospects during those leaner times.
Real estate is nothing if not unpredictable although many real estate professionals would argue that this is one of the things that make it such a challenging and satisfying career.
Certified Real Estate Virtual Assistants support real estate professionals nationwide with all of their marketing, technical, and, administrative needs.