We live in a Chicken Little World, which is why I love Steve Harney’s take on the latest gloom-and-doom housing market numbers: http://kcmblog.com/2010/08/26/everybody-calm-down-armageddon-is-not-upon-us/.

No, the sky is not falling, and yes, anyone who really knows real estate could have predicted these numbers. We know the tax credit pulled forward many buyers, and we know that poor jobs numbers and lagging consumer confidence directly affect housing. Regardless, many brokerages will book better numbers than 2009 at year-end, even though the story would be happier had it ended in June. As Steve and others note, we’ll still see about 5 million sales this year, similar to what we had in 2000, which we thought was a pretty good year. Like much in life, it’s all relative.

What IS different is that we have far too many sales agents and far too much brick and mortar – even after the attrition of the past few years. That absolutely has to change to “right-size” this business. Smart-and-savvy practitioners must skate where the puck is going:

  • Opportunity: Fewer agents don’t necessarily mean less revenue. How about putting the effort we put into recruiting bodies into coaching our fertile raw material to a 20% or 30% increase in units? How would that look from a productivity, profitability and branding standpoint?
  • Opportunity: Home ownership as a percentage of households is declining for various reasons, which means rentals will be stronger. People have to live somewhere. What are the opportunities in developing profitable rental and property management offerings?
  • Opportunity: Many Americans are sitting on cash they’ve been unwilling to invest due to market uncertainties. At some point, they’ll want to put that money to work. Real estate is a great buy now. How many of our associates are truly educated and proficient at working with sophisticated investor buyers, who can represent a long-term, customer-for-life income stream?
  • Opportunity: Years from now when we look back on 2010, we’ll be saying things like, “Gosh, I could have bought this house for X in 2010. Boy, did I miss the boat.” Are we articulating that to buyers when they ask us, “How’s the real estate market?”

I keep reading that recruiting is the only salvation of today’s broker. Yet, in private conversations with brokers, I hear them say that probably 30% of their sales force is truly engaged, committed and effective. Think of the wasted effort and resources spent on the other 70%, and on continuing to spin that revolving door by adding the wrong people to your bus with feverish but not necessarily thoughtful recruiting. Remember the old saying about continuing to do the things we’ve always done and getting the same result?

Success does in fact depend on a GREAT sales force. It does not depend on recruiting for recruiting’s sake. The real key is quality talent selection, arming that talent with market-relevant, consumer-focused skills development and coaching, and enforcing standards and accountability.

So what if you take a temporary step back in market share in that re-tooling process? Building a company with universally strong talent is the ticket to true brand differentiation. It will trump body shops every day of the week in this consumer-driven economy. And you may in fact not step backward, because cleaning house sends a powerful message to those remaining: “You meet our standards, we only have winners here, our leadership is focused on helping you achieve your full potential.”

As someone smarter than I said: “Stop waiting for the storm to pass, and learn to dance in the rain.” Opportunities are everywhere. Those who seize this day will be the market leaders of tomorrow.

Posted by:  Pam O’Connor