By the time the November election arrives, as worn out as we may all be with the politicking, I'll bet you'll still be thankful it was an election year. Why? Because the presidential election will probably be good for your real estate business. Most experts agree that the Federal Reserve will either not increase interest rates this year, or if they do, they will do it before August or wait until after the election. So interest rates should stay close to their current historical lows, which should help keep the market strong in 2004. Although some people may see the potential of back-to-back record years as an altogether good thing, I don't necessarily agree.

The truth is that right now the market may be out of balance because historically low interest rates have bolstered an otherwise mediocre economy. And the danger of a hot market is that sometimes it can create an atmosphere of risk for real estate sales professionals who aren't preparing for the predictable market correction.

Let me explain. Most would agree that today's historically low interest rates are helping to prop up the real estate market in spite of significant unemployment rates and an otherwise flat economy. Buyers, recognizing the opportunity to seize the extra buying power these rates represent, are helping drive real estate sales forward. Unfortunately, there is a very real chance that the real estate market could cool as soon as interest rates go up to more normal levels again.

The risk for real estate sales professionals is that the current hot market may lull real estate agents into a false sense of security. So when the market shifts, like it always does, you may be at risk if you're not prepared. Sometimes it's easy to forget prospecting and marketing when leads are falling into your lap and houses are selling quickly. You may think, "Why lead generate when I already have more leads than I can handle?" In my experience, this type of thinking can cause your lead generation engine to get rusty from lack of use and, when the market shifts, you may have to work even harder to jumpstart your marketing and prospecting. The market probably will shift in late 2004 or early 2005. The question you have to ask yourself is: How can I use current favorable market conditions to lay in store for when the market shifts?

The simple answer: build relationships and stick to the basics of lead-generation no matter what market you're in.

Although you need to pay attention to what Washington is doing, it's more important to keep focused on the activities you can control and that can ensure your success in a down market: Farming your area, networking with other agents, generating leads, and marketing and prospecting. I understand that these activities can feel repetitive and boring and even unnecessary in a hot market, but when you make a connection between consistently repeating certain activities and getting the great success that you want, they will start to feel a lot less boring and maybe even more exciting. It's what I call "connecting the dots" between the activities you do and the results they bring. You need to ensure your future success right now because you can't afford to run a fair-weather business. You must, as the old saying goes, make hay while the sun shines.

Because the presidential election will probably help keep interest rates low this year, you have more time to make hay. So take advantage of this because in 2005 we'll most likely see interest rates go up and overall market sales volumes go down. Remember that long-term successful people don't care if the market shifts up or down. They always act like it is down. This is how they stay ahead of the competition in downshifts and explode past them in upshifts. So you have a choice: to rise and fall with the tides (be reactive) or rise and fall with your own intent (be proactive).

I vote for the latter and hope you will too.

Published: March 17, 2004

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