Agents: take advice from someone who’s been there. The 2022 housing market does not compare to 2008

August 2, 2022
 min read

As Chief Real Estate Officer for Homeward, I’ve fielded a lot of questions lately about the state of the 2022 housing market. Specifically, agents express concern about the market cooling. Many of these questions come from agents who have only ever worked in a hot market. More experienced agents are still haunted by the ghost of the 2008 housing crisis. And even real estate agents who were literally children in 2008 have voiced their concerns with me over the cooling market and whether we’re heading into 2008: The Sequel.

Yet when I ask agents around the country about the state of their local market, they all say the same thing: they’re still selling. No, they’re not getting twenty offers on every property anymore, but they still have two or three. No, they’re not massively overbidding, but they still overbid. And they don't get offers on a property within an hour, but it still sells within five days.

Which begs the question: if people are still buying and selling homes at a solid rate, why are we still talking about the market crashing?

Our fearful conversations about the housing market keep scaring us about the housing market

A quick look at the Google results for “housing market,” and it’s clear to see why everyone is panicked. Here’s some of what I found lurking in the search results:

  • “A housing bubble requires 3 elements. The 2022 housing market has hit 2”
  • “The 2022 Housing Market Is Different Than 2008. Will It Still Crash?”
  • “The 2022 Housing Market Crash.”
  • “Rising interest rates are crushing the US housing market”

There are plenty of even-keel takes on what’s happening floating around the internet, but it’s the doom-and-gloom articles that too often dominate the headlines. I get it: clickbait gets page views! But I can’t help but feel that the real crisis amongst real estate professionals is that we keep scaring the pants off ourselves. The market likes a sure thing, and agents like a sure thing, and we’re all a bit jumpy when things start showing the slightest signs of friction.

So let’s cut the clickbait and face the music: the market is definitely cooling. But that doesn’t mean agents need to ration food, bury their life savings in the backyard, and start new careers. The causes of this correction could not be more different than those that triggered the 2008 housing crisis. And those agents who calmly anticipate and prepare for the market shift will find themselves in a terrific position to guide their clients through the challenges to come.

2008: A housing bubble fueled by bad mortgages

Make no mistake: 2008 was rough. I was there. I started flipping houses in the Phoenix area in 2005, right at the height of a massive market incline. Housing prices appreciated so quickly that it was hard not to make money as an investor.

Lenders, borrowers, and even Wall Street were making bets that the incredible price appreciation would last forever. Economists call this practice speculation. Speculation can lead to terrific returns when the market’s hot, but even marginal dips in the market can wipe out entire investments. Out-of-control speculation helped lead to the 1929 stock market crash. It’s just not a sound strategy.

But lenders were approving everyone for mortgages — and I mean everyone. There were three types of mortgages that were popular at the time:

  1. Subprime mortgages. These loans were offered to those who couldn’t qualify for a standard “prime loan.” They carried high interest rates to offset the high risks the lenders were taking on.
  2. Stated-income mortgages. I could walk into a bank, tell them I made $500,000 a year without a lick of proof, and they’d loan me the money for the entire property’s value.
  3. Adjustable-rate mortgages. Borrowers paid less in the initial years of the term and more as time went on. (If that sounds a bit like kicking the can down the road — don’t worry. We’re getting there.)

This mass approval of high-risk mortgages quickly became absurd. I remember being in a general education class when a sponsoring lender came to visit. He was promoting his — I kid you not — “One Day Out of Bankruptcy” loan. The idea here was that there was no one better to lend a fistful of cash to than somebody who just had all of their liabilities cleared. That might sound ludicrous by today’s standards, but at the time, no one had a problem with it. Obtaining financing was simple — too simple, as we’d quickly come to find.

The bottom falls out

Like so many others at the time, I wasn’t prepared when the market crashed in 2008. I found myself owing more money on the properties I held than they were worth. The bill had come due on all those high-risk mortgages that banks had been cutting for years. People started defaulting on mortgages they should never have been approved for in the first place. There were more than 2.3 million foreclosures in 2008 alone.

The collapse of the housing market in Fall 2008 brought Wall Street to its knees as well, resulting in a full-blown recession. Recessions have a funny way of dragging down housing prices as incomes plateau or shrink and fewer people seek to move. 2008 was no exception. Those still barely paying on their high-risk mortgages suddenly found they owed more on their houses than the houses were worth.

2022: Yes, the housing market is cooling — back to normal

Flash forward to 2022, and now the housing market is cooling again. But let me be clear: the current market is nothing like 2008.

The difference is that what happened in 2008 can’t happen again because of safeguards put in place in its aftermath. The high-risk mortgages and speculation that fueled 2008 are history. Lenders operate far more conservatively now, both out of their own interest and because of increased government regulations and oversight. Long gone are the days of blanket mortgage approval. For instance, nowadays, you actually have to prove you make a certain amount of money before lenders let you borrow their money (Go figure).

A recent Fannie Mae report shows just how much has changed since the rock bottom that was 2008. You must maintain a 620 FICO score for a bank to approve you for a conventional loan. The average FICO score of American home buyers currently sits at an impressive 754 as of March 2022. Plus, the total mortgage debt in the United States is less than 43% of current home values.

So I get why agents feel nervous about the current cooldown. It looks similar at first glance: several years of rapid appreciation followed by a sudden market slowdown. But if bad mortgages and speculation aren’t bringing the market down, then what is?

An unsustainably hot market

“The average price of a house in the U.S. jumped from $403.9k to $497.3k between Q4 2020 and Q4 2021.”

To answer that, we need to identify what caused the hot streak that dominated most of the 2010s. I’d argue three things primarily caused our extended seller’s market:

  1. Limited housing supply. When people stopped buying houses during the 2008 crisis, companies stopped building them. Demand outstripped supply for most of the last decade, which drove up housing prices.
  2. Record low interest rates. Interest rates hit a downward trend throughout the 2010s, making mortgages extremely affordable. The average interest rate in 2021 was 2.96%, which is about as close to a net neutral interest rate as you’ll ever see. This all-time low was due largely to the fact that the Fed was worried about the pandemic fueling a recession.
  3. External factors. No one could have predicted that a pandemic would strike in 2020. Even fewer people could have seen that what at first appeared to be a nightmare scenario for agents would actually superheat the market.

It’s hard to overstate just how hot the market was heading into 2022. House prices have historically risen over time, but we’re talking double-digit appreciation. The average price of a house in the U.S. jumped from $403.9k to $497.3k between Q4 2020 and Q4 2021. That’s a difference of more than $90,000 in just 12 months! There is no historical precedent to compare that jump to. It’s simply never happened before.

Welcome to course correction

All of that’s to say that the market has long been overdue for a correction. You can't sustain 20% to 25% appreciation in certain markets like South Florida year-over-year indefinitely. It just doesn't happen. Most bull real estate cycles last six to eight years at the most, and the post-2008 crisis cycle ran for eight to 10 years even before the pandemic hit — and then it got even hotter!

There are a number of factors currently putting the economy through the wringer, but it’s the end result — inflation — that’s having the biggest chilling effect on the market. The Federal Reserve board has increased interest rates to fight inflation. The Fed’s interest rate changes don’t directly impact long-term investments like 30-year mortgages, but they do have a ripple effect that impacts mortgage pricing. Generally speaking, when the Fed raises the interest rate, mortgage rates spike. The latest rise in mortgage rates means homeowners pay a decent amount more on a mortgage now than they would have at this same time last year.

Truthfully, historically low interest rates have spoiled us these last few years. Interest rates were at 2.68% in December 2020 — literally the lowest they’ve ever been. But reaching back to the 1970s, the historical interest rate averages closer to 7.7%. Mid-July 2022’s interest rate for a 30-year fixed-rate mortgage sits around 5.3% — still well below the historical average.

What real estate agents should expect from the 2022 housing market going forward

Single-digit appreciation and a climbing interest rate might freak out homebuyers, but I have to tell you: this is the “real” normal. The last decade outperformed historical trends, and things have started to calm down. Given the economic outlook, you can expect a cooler market to continue for some time. Through the coming year and potentially beyond, agents should expect:

Continued supply issues

This is the chief reason agents shouldn’t fret about a market correction. Demand still outweighs housing inventory and likely will for several years. The rate of new home builds dropped in recent months in response to inflationary pressures, supply chain issues, and increased cancelations. And if higher interest rates discourage some segments of potential buyers from upgrading to a new home, there will be fewer homes on the market, further exacerbating this shortage.

Ultimately, simple economics plays in real estate agents’ favor here. Until the number of homes built outpaces demand, the housing market has an attractively high floor.

Normalized appreciation

Again, double-digit appreciation is simply unsustainable. Even with the market starting to cool, Austin saw 19% year-over-year appreciation this past May. 19%! Markets like Austin that have overperformed in the last two years may chill to the point where they see house prices drop slightly. But this isn’t a “crash” — just a return to sanity.

Most other markets are more likely to see a slowing rate of appreciation — somewhere closer to the 4-5% you’d expect to see on average. An important thing to remember is that looking at short-term trends in the real estate market doesn’t reveal what to expect down the line. The market can be volatile month-to-month, and the current economic situation is only likely to make it more erratic than usual. It’s not worth panicking over pricing stagnation or depreciation in any given month when the long-term trends are still friendly. (If we’re seeing either of those things across the board come 2023, I’ll have to write a new article.)

Decreased competition

Newsflash: 20 bids in a day isn’t “normal” real estate. We’ve been spoiled, and we’re regressing to the means. The sort of competition you’ll see in the next few months is more akin to what you’ll see over the course of your career than the windfall of the last few years.

Your sellers can’t be as picky as the market swings back in favor of buyers. Many would-be buyers will look at the rising mortgage rates and say, “I refinanced last year at 3%, and now the interest rate’s almost 6%. Why would I pay more money over time for that house than I’m paying for the house I’m in?” The buying power is just not what it was a year ago, and it’s going to prevent people from moving.

And remember: prices are still mostly appreciating. People will still pay a premium for a new house in an economic climate where their dollar doesn’t go nearly as far. Higher interest rates mean even fewer people will be able to compete for a house, further reducing the number of offers on a property.

3 things every agent can do to weather uncertain housing markets

There’s no need to fear a sudden market crash, but that doesn’t mean everything’s smooth sailing from here. Inflation’s not slowing, and the external conflicts fueling it show no signs of subsiding anytime soon.

The cooler market will test the skills of every agent out there. Sales are no longer automatic. Commission checks will shrink. Clients will ask more of you at a time that you stand to make less. You can’t just show up with a lockbox key, show a property, and cash a check 30 days later.

That said, agents who understand the current climate will be okay. In fact, most agents who buckle down and prepare themselves for selling in this cooler market will come out the other side better at their jobs. I did back in ‘08 — though I certainly took my lumps as I figured things out along the way.

My advice for agents? Spare yourself the pain of figuring things out the hard way and prepare yourselves for new normal with these three strategies:

1. Scale back your expenses

The glory days of oversized commission checks are over (or, at least, they’re on a temporary hiatus). You’re still going to bring in revenue, but you need to run a lean operation to ride out an uneasy market. I’ve seen too many agents go out of business because they're overwhelmed with expenses when revenue dips.

Make sure your expenses are controlled and that you have your cash reserves in a position where even sudden market shifts can’t sink you. This means making some difficult decisions around cutting overhead or tools you love but don't really need. Also consider shifting your marketing to focus on more cost-effective lead generation methods like social media, email newsletters, or video—with an emphasis on converting to a face-to-face appointment!

2. Expand your offering to improve customer experience

While agents should function as consultants in any market, it’s especially important in a market downturn. Agents looked like heroes in the latest hot streak for just showing up, listing a property, and receiving an offer an hour after it went on the market. 

But it won’t be enough to “just buy or sell” in a market downturn — any ol’ realtor can do that. You need to provide a suite of services to your customer beyond facilitating home sales. The consummate agent in today’s market will:

  • Educate clients on the state of the market
  • Walk clients through the ins and outs of the home purchase/sale process
  • Meet regularly with clients to review strategy and make necessary adjustments
  • Use PropTech tools to improve meet clients in digital spaces and make more competitive offers

The idea of the “agent as a consultant” is at the heart of what we do here at Homeward. Imagine showing up at a prospect's house and being able to show them a menu of services you provide. Do they want to buy a home before they sell the one they’re presently in? Hey, you have a Homeward solution for that. Is the local market still competitive and your prospects need a cash offer to get a seat at the negotiating table? Of course you have a solution for that, too!

3. Learn from those who came before you

If I had to hazard a guess, I’d say 80% of agents out there right now have never been through a substantial market shift. That means 20% of agents did make a living during the 2008 crisis. Since they’re still out there making money, I have to assume they have countless nuggets of wisdom about how to weather a cooler market.

If I were a young agent, I’d come to the table with a willingness to learn and network and engage with any agent who’s been through it before. I’d be picking their brains clean of any tidbit that can help me strengthen my business in the long term. Believe it or not, many agents didn’t just survive during 2008. The ones who dug deep and adapted found a way to thrive.

If thriving sounds good to you, start here:

  • Connect on social media. Facebook groups like the Homeward Agent Network are goldmines for helpful tips and anecdotes. Meanwhile, if you’ve ever been on LinkedIn, you know people love to give advice freely.
  • Find trusted blogs. We’re smack in the middle of a glut of terrific real estate content. (Case in point: You’re reading an article on real estate advice right now.) You know there’s great information out there just waiting to be unturned.
  • Pick up a book. News reports are reactionary. The market dips, and they report on it. Agents or other experts who lived through 2008 have had the time to sum up their experiences and give actionable tips removed from what’s happening right now.

It’s time to earn that commission check

The most critical thing to remember while working in a cooling market is that your clients are anxious, too. They read many of those same news articles and think-pieces that predict nothing but storm clouds for the housing market over the next year. Your customers have their entire lives invested in their homes and the prospect of finding a new one — and they’re depending on you to provide some stability amidst all the uncertainty.

So be honest with them. Tell them the truth about the current climate and temper their expectations — but also provide them with the tips, resources, and support as you guide them to their new home. The wins (and commission checks) are still out there. It’s time to prove you can earn them.

TikTok for real estate agents: waste of time or lead goldmine?

May 13, 2022
 min read

You can’t have a conversation about marketing nowadays without hearing about TikTok. Some real estate agents swear up and down that it’s the next big thing in lead generation. Others say that TikTok can be a black hole for real estate agents who already fill their days with more reliable methods of attracting new clients.

So is it worth honing your TikTok chops to create new sales opportunities, or is the platform simply a digital playground for younger generations to post their viral videos? See what real estate and social media experts have to say about the merits of using the increasingly popular app to drum up real estate leads.

Goldmine: why real estate agents should use TikTok

Those unfamiliar with TikTok may know it only as a platform where people post short, funny videos. While that’s certainly part of the appeal, the platform has a growing user base and a set of unique features that makes it a perfect channel for real estate marketing efforts.

You meet prospects where they gather

The media often dismisses millennials as unreliable consumers—but don’t make the same mistake. Millennials make up the fastest-growing demographic of homebuyers. The National Association of Realtors reports that millennials currently comprise a whopping 43% of those purchasing homes.

The need to target millennials makes TikTok the perfect platform to focus your marketing efforts on. 39% of millennials in the U.S. have TikTok accounts. Since TikTokers spend an average of 52 minutes a day watching videos within the app, that’s nearly an hour millennials could spend viewing your real estate content.

While TikTok’s user base skews young, older generations also enjoy the app’s short-form videos. 31.3% of TikTok users are older than 40. 78.7 million U.S. users on the platform in 2021, giving you ample marketing opportunities spanning several generations.

You build interest without spending a dime—and potentially making one

TikTok provides a free alternative to other pricy marketing avenues. Yard signs, billboards, and Chamber of Commerce memberships all cost money. Even Facebook and Instagram require payment to increase post visibility to your existing followers, let alone new prospects.

The only things you need to create TikTok videos are a decent smartphone and a bit of ingenuity. TikTok doesn’t hide any of its features behind a paywall. The visual filters and music are all included in a normal TikTok account. TikTok also doesn’t limit organic reach to get businesses to pay for ads. Videos become popular based entirely on how many people watch, like, and comment on the content. Businesses who make engaging videos on TikTok stand a better chance of a wider audience viewing their videos.

TikTok’s robust editing features come free for all users. (Source)

Shaun Connell, founder of  Rental Property Calculator, points out that TikTok isn’t just free; it can be monetized. “While TikTok can be utilized to generate organic leads,” he says, “it can also be monetized on its own, providing your agency with a secondary revenue stream.”

Monetization isn’t automatic, with a user requiring at least 10,000 followers and 100,000 video views within the last 30 days to be eligible. Those who grow their following to achieve this standard are rewarded with monetary kickbacks based on how many views each video receives. TikTok only pays out a few cents per thousand views, so monetization won’t justify quitting your day job. However, the prospect of earning any amount of money gives ambitious agents a prize to set their sights on as they develop their TikTok brand.

You can target your audience based on their region and interests

Most real estate transactions are hyper-local to a specific city or neighborhood. Any content you create and distribute online needs to target those who live in this specific geographical location, so you don’t waste time or money. Facebook and Instagram require businesses to shell out cash for audience targeting as part of their paid ads services. TikTok uses an alternative method that’s free and flexible: hashtags.

Hashtags have been around the internet since the inception of Twitter, but they’re especially important on TikTok. That’s because TikTok’s algorithm factors hashtags into its determination as to which videos to show users. Essentially, if you engage with a video that contains certain hashtags, you’re going to see similar videos that contain the same or related hashtags.

TikTok content creators use hashtags as a free means to narrow down the geographical reach of their posts. This feature comes in handy for real estate agents looking to increase interest in a specific locale. “Through TikTok, I can use location-based hashtags to engage with my target audience without spending heavily on marketing campaigns,” says Anthony Minniti, owner of  Minniti Investments. Hashtags ensure that the people using your video are potential leads. You can’t sell a listing in Austin, Texas, to a TikToker in Reykjavík, Iceland, no matter how good you are at your job.

Hashtags aren’t limited to geographical targeting. Content creators use topical hashtags to focus on users who share an interest in their area of expertise. Real estate agents include “#realestate” in their videos to share their content with those surfing the topic on TikTok. Savvy agents combine topical hashtags with geographical hashtags for maximum results. (Think “#houseflip” alongside “#tallahassee.”)

An example of a TikTok video using topical hashtags. (Source)

Waste of time: why TikTok may not work for real estate agents

TikTok’s free features and massive (and young!) user base appeal to real estate agents looking to use any means necessary to drum up leads. However, there are limitations to the platform that must be considered before you adopt a long-term TikTok marketing strategy.

Hard to stand out in a crowded app

New TikTok content creators often struggle to create videos that make an impact with their target audience. TikTokers crave unique content, which puts its content creators under pressure to craft consistently engaging posts. This fight to create videos that make an impact means real estate agents looking to get leads from the app must commit to posting quality videos day in and day out. Busy real estate agents may simply not have enough bandwidth to dedicate that much time to a single marketing platform.

TikTok videos are renowned for their humor, but educational content also fares well on the app—so long as it’s engaging. Ditch the more conventional tone you use on more “professional” pages like Facebook and embrace the more fun-loving side of your personality. “Have some fun with it,” says Amy Kite, owner and real estate agent at The Kite Team. “The trick is: you’re not trying to attract other realtors. You’re trying to reach people in your specific area (or with an interest in that area) who are casual users of TikTok.”

Specialization helps to differentiate your account and stand out from the rest. You don’t need to create content on every real estate topic. In fact, posting videos on real estate topics that aren’t strongly related may have the opposite effect. A TikToker who engages with your videos showcasing listings in a specific neighborhood may not find your “history of real estate in America” series particularly useful.

Consider specializing in certain subjects and video formats to build a dedicated following, including:

  • Tours of historic houses in your neighborhood
  • Property rate increases over time
  • Before-and-after videos highlighting renovated houses

Need to stick to the short stuff

Real estate agents field questions on more than a few complex topics, but TikTok isn’t the place to dive too deeply into the answers. “TikTok users have notoriously short attention spans, making it difficult to deliver a compelling message in such a short format,” explains Chris Grayson, founder of “While there are certainly some benefits to using TikTok, I believe that there are more effective platforms for real estate marketing.”

Evidence supports Grayson’s claim. 50% of TikTokers find videos longer than 60 seconds long “stressful.” TikTok’s format makes it too easy to swipe away from a video that doesn’t immediately appear gripping, and users are looking for maximum enjoyment in the shortest time possible. After all, it’s called short-form video for a reason!

Successful TikTok creators find creative ways to shorten the length of their videos. For instance, they often minimize their voice-overs to keep the content highly visual. Luckily, real estate agents should have no issue with finding visual focal points for their TikTok videos. If you find your video requires a lengthy voice-over, save your long-form content for YouTube, a platform where users expect extended and in-depth videos.

An example of a TikTok video using topical hashtags. (Source)

The verdict: invest in TikTok for real estate before it’s too late

Real estate agents who have invested wholesale in TikTok for real estate advertising already see the value in establishing a presence on the app. Madison Sutton, an agent in New York City, now gains leads exclusively from TikTok after just two years on the platform. Another NYC-based agent, Cash Jordan, has doubled his customers since joining.

No single marketing platform is perfect, but it’s hard to find a better way to engage with young homebuyers than TikTok. An incredible eight new users sign up for TikTok every second, cementing the app’s status as the hottest social platform out there. While TikTok has been available in the U.S. for five years, it’s still early days for the social media platform. Develop your brand and take advantage of TikTok’s enormous popularity to advertise your business before you end up behind the real estate marketing curve.

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