If you’ve spent your career in real estate, you know what it’s like to be part of a feast or famine industry. Even in a booming market, it can be hard to earn a stable monthly income, outcompete newcomers, and feel financially secure after hours of showings for a one-time commission.
But what happens to realtors when the market crashes? When people stop buying and selling property? What happens when your already unstable income gets even more unreliable?
Surprisingly, though, a market crash can open new doors for real estate agents by driving separation of opportunity. So real estate agents who are prepared to capitalize on key market changes and opportunities can actually thrive.
In this guide, we explore what happens to realtors when the market crashes—and how to ride out or take advantage of tough times. So you can generate stable revenue and thrive no matter the market.
Table of contents:
- What happens to real estate agents when the market crashes?
- Do real estate agents make less money after a crash?
- The upsides of a market crash for real estate agents
- How to survive and thrive in a housing market crash
What happens to real estate agents in a housing market crash?
During a housing market crash, realtors need to be vigilant about constantly updating clients about showings, feedback, price reductions, and new listings. But, it can be hard to stay motivated, interested, and devoted to your clients when you’re insecure about your financial stability and future.
When the time comes, real estate agents have two options: to quit and change careers or adapt and excel.
Let’s take a look at each option and what the implications are for real estate agents.
1. Quit and change careers
If you’re overwhelmed by one market crash, you might want to consider a career pivot.
Unfortunately, instability is the name of the game here as property prices, availability, and mortgage rates rely on the health of the economy—so both are always in flux. But, there are tons of alternative careers you can choose from that require a lot of the same skills and expertise as a realtor’s job, which makes the transition easier.
Some career alternatives you could explore include:
- Outsourced property management
- Home stager
- Foreclosure specialist
- Property inspector
- Property assessor and appraiser
- Marketing manager
2. Adapt and excel
Most seasoned real estate agents have seen a market crash or two, so they know it’s all part of the business. They also know that a market “correction” is an opportunity to develop new skills and differentiate themselves from the competition.
Successful agents will seek out new certifications, work on closing any gaps in their skill set, and create additional revenue streams—without leaving their brokerage.
For example, a great side job for real estate agents is outsourced property management (more on this below). You can hand over your guest communication, property listings, and channel management and make additional revenue without getting bogged down in day-to-day operations.
Managing short-term vacation rentals generates stable income for both you and your clients
Do real estate agents make less money after a crash?
During a real estate market crash, the total value of a property decreases. But realtors make money on transactions, which isn’t the same thing as house prices. Transaction volume is more important than individual transaction value.
Since transaction volume or “inventory” makes up the total value of all the properties and contracts you work with, if you sell fewer properties, the volume goes down.
However, market crashes or “corrections” open up new inventory like expired listings and returns from for-sale-by-owner (FSBO) properties, which help boost your perceived value as an agent and, ultimately, transaction volume.
The upsides of a market crash for real estate agents
In addition to freeing up new inventory for realtors, a market crash can also create new opportunities—like less competition, more buyers, and clients seeking stable income.
Clients will seek stable income
For property owners, selling during a market crash won’t get them the return on investment they want out of their property. So real estate owners feeling the pinch will look to get more out of their assets without selling.
If you can add value to clients by offering an alternative, like running short-term rentals (STRs) from their vacant properties, you’ll be able to differentiate yourself as an agent, while earning additional, stable, passive income for both of you.
Jetstream lets you outsource vacation rental management—like guest communication, listing distribution and optimization, and scheduling cleaning and maintenance. All you have to do is provide the cleaners and property—we handle the rest.
And, with zero upfront costs and our shared success model, there’s no risk involved: we don’t get paid until you do.
Other items of value you can offer clients include:
- Keeping homeowners up to date on local trends
- Being knowledgeable about property rules and regulations
- Providing buyers with interesting neighborhood insights
- Helping property owners monetize their investment
Jetstream helps you add value to your clients by generating long-term passive income in unstable market conditions
Less competition
When there’s a market crash, there are fewer agents who are willing (and able) to take on the challenge. The agents who are only half-committed or don’t know how to market themselves properly probably won’t stay active (see the “quit and change careers” sectionabove).
Let’s examine the chart below, taken from The National Association of Realtors (NAR) Historic Report. The first column shows the year, the second is the total number of local associations and the third is the total number of members (or real estate agents).
You’ll notice that during the housing market and economic crash of 2008, the number of local realtor associations and the total number of members drastically declined, and kept declining over the following years.
NAR shows major declines in real estate memberships and competition after the 2008 market crash
Since the market and marketing channels are less saturated with realtors after a crash, it’s a great time to be out there building your brand. This can give you a leg up when the market takes a turn for the better as you will have already built up a crucial following and brand image.
More people may be willing to buy
Since a real estate crash involves lower housing prices, it can lead to a booming buyer’s market. That means there are more homes for buyers to choose from—and less competition for them.
This makes it easier for buyers to place bids, no matter what the market looks like, which can boost your sales and profits.
It’s also a good idea to target cash buyers during a market downturn or crash because they’re not relying on getting a loan to finance their purchase. This makes it a speedier process that’s more likely to make it through escrow.
Lower housing prices can generate interested cash buyers
How to survive and thrive in a housing market crash
If you love being a real estate agent or a career change is off the table, there are ways you can survive—and even thrive—in a housing market crash. Let’s explore some real estate hacks to give your career a boost during turbulent times.
Create additional revenue streams and add value
While you might not want to start yet another real estate podcast, or have the capital to be a real estate investor—there are still ways to generate multiple income streams for real estate agents.
Creating additional revenue streams can be as simple as coming up with new ways to add value to your clients. One way to do this is by becoming a trusted advisor for your clients.
Ensure your clients avoid foreclosure by helping them rent out a room, their entire property, or multiple properties to bolster both of your incomes. Helping clients keep their homes will make you valuable to them and land you a more predictable monthly income.
To make this easier for both you and your clients, while getting a faster cash-on-cash return on investment, you can offer to manage their property portfolio or property yourself. And, with Jetstream in your corner, you don’t need to learn how to manage vacation rentals. Just put us in touch with your cleaners and we’ll take care of everything.
Managing your client’s STR with Jetstream lets you:
- Generate supplemental income for you and your clients
- Boost client satisfaction and loyalty
- Stay top-of-mind for clients to gain repeat business or referrals
- Grow your property management business and increase the likelihood of clients buying more property for you to manage
Jetstream handles all your vacation rental operations with first-rate technology and guest-facing agents. Wow your clients with Jetstream and their new income stream.
Strong network and relationships
Your connections, network, and relationships in real estate can help give you a leg up in trying times. Even when the market’s great, it’s a good idea to support local businesses such as:
- Cleaning and maintenance companies
- Contractors
- Restaurants
- Cafes
- Movers
- Interior designers
- Dry cleaners
- Local attractions
Leverage these relationships by asking them to refer your business in exchange for referring theirs—and leaving your flier or business card in visible areas of their establishments.
This helps get your name out there while showing clients you’re an active member of the community—and makes you more appealing to both local residents and non-locals. All of which sets you up for higher commissions.
Leveraging existing relationships and supporting your local community boosts your credibility as a real estate agent—and commissions.
Good track record
It makes sense that a realtor with a great track record has sold a lot of homes. But, that’s not all there is to it. Your track record also consists of your ability to foresee and meet client needs. Here are some ways you can go above and beyond and get a pristine track record:
- Providing value through deep market research and knowledge
- Responsiveness and reachability
- Recommending local services
- Handling client paperwork
- Helping homeowners and buyers monetize their assets
For example, if your client is looking for a residential property, you can make a strategic offer based on market research and experience that gets them noticed without breaking the bank.
If your client wants an investment property with the goal of asset appreciation, you should provide them with local market data, show them up-and-coming neighborhoods, and a template business plan.
Or, if you’re attuned to market trends and can persuade potential sellers that they should price at or just ahead of market declines, you can sufficiently grow your reputation and sales.
By proactively anticipating client needs and acting fast to help them through the market crash, you can get glowing reviews and referrals—while expanding your service offering as a realtor.
Learn foreclosures
During a housing market crash, you can count on a lot of property foreclosures. That’s because homeowners who can’t satisfy their mortgage payment need to foreclose on (and sell) the property to make up for missed payments.
Granted, the number of property sales goes down during a recession, but there are still home sales being made—and, as mentioned earlier, there’s the possibility of more people looking to buy during a market crash.
You can work with lenders to get listings on their foreclosed properties, or you can become a foreclosure specialist by taking a course and getting certified—depending on local regulations and requirements. Either way, being a foreclosure resource and consultant for your clients can deepen your relationships with them and get you more business.
Learning foreclosures helps you offer more value to your clients during a market crash—and earn more
Invest in yourself
One of the best things you can do for yourself and your career is to continuously expand and diversify the skills, certifications, and hobbies that contribute to your real estate expertise.
Upskilling or reskilling your marketing, negotiation, communication, and sales skills is a great way to stay on top of your game and the competition.
Or you can test new ways of reaching your audience. For example, by starting a real estate blog or Youtube channel, doing live video tours on Instagram, hosting live Q&A sessions with interested parties, or networking with influencers in your area.
And, if you’re running a vacation rental business to earn more for your clients, you can offer influencers a free stay in your short-term luxury rental in exchange for free publicity and content.
You don’t need to invest in expensive tech to diversify your offering: try filming live home tours from your phone or hosting live property Q&As.
Partner with Jetstream to survive and thrive in a market crash
A real estate market crash adds to the existing stress and insecurity of realtor life. It can make it more difficult to secure a stable monthly revenue, maintain inventory, and stay motivated through showing after showing.
But a market crash can also open new opportunities for real estate agents. Like less competition, more buyers, and more clients seeking stable income. This can help you secure a new revenue stream that won’t be vulnerable to future market crashes.
And, when you outsource short-term rental management to Jetstream, you can easily manage your clients’ properties, generate stable passive income for both of you, and scale at your own pace.
Let Jetstream do the heavy lifting so you can concentrate on providing value to your clients and guests—and earn more in any market.
Frequently asked questions about what happens to real estate agents when the market crashes?
What happens to real estate when the stock market crashes?
When the stock market crashes, for instance, as seen by recent economic recessions caused by the Covid-19 pandemic—the real estate market saw a boom in home values, home buyers, and market value. Real estate investing, house flipping, and first-time buyers increased drastically, as well as the exodus from urban cities like New York, Los Angeles, and Las Vegas, to suburban or rural areas (like Florida) with low monthly payments and better real estate prices.
How has the economy affected the real estate industry?
The current economy has affected the real estate industry by increasing mortgage rates, interest rates, and housing affordability. Although economists believe we’re heading for another market crash, there is more evidence to suggest our market is correcting itself. Instead of having high inventory levels (the number of homes for sale) and plummeting home prices, like in the 2008 market crash, we’re now seeing the inverse. Our current market has all-time low inventory levels and high property values—meaning it’s not about to crash—but correct itself for better lending standards, property values, and adjustable-rate mortgages.
What does a real estate agent do when the market crashes?
During a market slowdown or crash, a real estate agent can either look for a new career or diversify their offering and skills. For example, appealing to new demographics and influencers through social media, offering to manage your clients’ short-term rental properties, or increasing your housing inventory can boost your monthly income even when housing supply or prices drop.
Will housing be cheaper if the market crashes?
When the real estate market crashes, housing tends to be cheaper. That’s because a recession can cause the high housing prices found in a housing bubble to burst, as there’s no longer demand for buying new homes. That means there are fewer mortgage borrowers due to high mortgage interest rates, as well as homebuilders.
