Since the onset of the COVID-19 pandemic, real estate agents and brokerages have been on a wild ride. Home sales and home price appreciation hit record numbers in 2021 and early 2022, only to slam on the brakes as interest rates rose at an unprecedented pace in the second half of the year.
As the industry looks to 2023 and the challenges the new year may pose to agents and brokerages, RealTrends sat down with Glenn Sanford, the newly named eXp Realty CEO and founder of eXp World Holdings, for a discussion on the year that was and what his expectations are for the year to come.
This interview has been edited for brevity and clarity.
Brooklee Han: Before we look at what 2023 might have in store for the real estate industry, what were some of your biggest takeaways from 2022?
Glenn Sanford: I think the biggest lesson is that the market can turn pretty quickly. I think we all knew from 2008-2009 that the Federal Reserve could have a really big impact in a positive way because of all the financial inputs into the market that really helped get us out of 2008 and into 2009. But the reverse is also true. When they withdraw their support, raise interest rates, et cetera, it can impact the housing market pretty quickly. So, the surprise was just how fast the Fed was going to make a change because nobody saw it coming.
BH: Back in late June 2022, at the RealTrends Gathering of Eagles conference, you spoke quite extensively about different strategies brokers and brokerages could employ to successfully navigate the shift in the market. What are some of the strategies you are looking to employ at eXp Realty to adeptly get through the changes in the market?
Sanford: We are in a fortunate position that we don’t have a lot of fixed expenses, so our ability to pivot basically to yet another new normal in terms of real estate transaction count and volume is a lot simpler than a traditional model. But we are going to work on production-based training and coaching — we are really pushing big on that this year. We have also announced internally that we are going to introduce monthly challenges to create more chances for agents to step up their game in different parts of their business.
Then, I am also rewriting How to Master the art of Selling Real Estate this year with the book’s original author, Tom Hopkins. Tom originally published it in the early 1990s, and it was a formative real estate text for tons and tons of people in the industry, including myself. So, we are going to rewrite it to be better suited for 2023 and the modern Realtor, who is more technology focused and has all these tools, like social media, that didn’t exist back in the day.
But our main focus is helping agents to be more productive. We have our new luxury program in place, which has been well received, and we are going to continue to work on international growth. However, we are also cutting back expenses where we can and figuring out where certain things can be done in lower cost jurisdictions.
BH: As we start to take a look at 2023, what are you expecting to see as some of the major trends for the year?
Sanford: We are prepared for something akin to a 25% to 30% overall sales volume reduction in the industry. We still have more agents at eXp this year than we did last year. There has been a little bit of a lull in growth, but that is just because of the attrition in the industry at large.
We think we are in a position to build to weather 2023, and potentially, we might even get some gains this year. We definitely think we will gain market share, but in terms of just volume, we are continuing to do the blocking and tackling of real estate, and that is what our main focus is on this year.
BH: There has been a lot of talk about home price appreciation over the past couple of years. What are you expecting to see, and what are you preparing your agents for this year?
Sanford: I think you are going to see markets, like maybe Seattle and San Francisco, continue to be challenged. Higher dollar markets overall, I think, are going to be challenged the most in terms of price appreciation, and may potentially see some small price declines. These markets just have so many people not able to buy move-up properties, and that demand is what creates upward pressure on home prices.
So, I think you are going to see lower dollar markets continuing to be pretty active. People want to maybe move back home, or somewhere more affordable, and they can work from anywhere now, so some of the more rural areas will continue to see an uptick in valuations.
BH: Inventory was a hot topic in 2022, and from the agents I have spoken with, it seems like this issue is still plaguing many metro areas. How are you helping agents to generate more housing inventory?
Sanford: This time of year, we generally see a lot of sellers take their properties off the market and then put them on in late January or February in anticipation of the spring selling season in March. So, I think a lot of what we are seeing right now is just a temporary reduction in inventory that is more seasonal than anything else — and we just haven’t had a lot of seasonality the past few years, so everyone has to adjust to that again.
But at eXp, we have been working on building a pipeline of listing opportunities from some of the big property aggregators, iBuyers and others looking to offload their properties. Also, training and education are probably our number ones — just training agents to go out and get listings has been a huge focus as well.
BH: Earlier this month, you were named the new CEO of eXp Realty. How do you hope to build the brokerage in this role?
Sanford: When I stepped out of the CEO role at eXp Realty a few years ago, I also stepped back from a visibility standpoint. One of the things we felt I could do by getting back in the seat is that I could be more visible. Just in the first four days back on the job, I have been on five different live streams with different communities [and] really pushing different aspects of the eXp Realty story.
Given that I am a founder, I am uniquely positioned to continue to sell that story in a very unique and interesting way that people appreciate a bit more than someone who was just hired into the role of CEO. So, I am just trying to become a little bit more omnipresent and create more opportunities for agents to learn about eXp — and create a better flow for someone who inquires about eXp so they can find out if this is the right brokerage for them.
BH: Did the rapid shift in the market play a role at all in you stepping back into the CEO seat?
Sanford: For sure. I think that if the market was continuing to be really robust, things would be different. It is hard to understand the impact you are having on an organization when things are going really well.
With this, we were sort of thinking like a basketball team. We are down to the wire, and when it gets to that time, there are certain players who just want the ball and who you want to get the ball to — and I think I am the person that likes to get the ball and likes to take the final shot, and I feel the organization believes that I am the right person to get the ball to.
Overall, it just felt like a good time to be in this role again and help galvanize and grow the company through a softer market.
BH: What are some of your big goals for this year in the role of CEO of eXp Realty?
Sanford: It is really about making sure that agents who are interested in eXp can get involved with eXp easier.
Then, looking more internal, we are really focused on how our teams are working together in a way to create the most agent-centric experience for the agents that are already with us. We want to continue to improve the agent experience and make things more agent-oriented versus company-oriented.
BH: Overall, what can we expect from eXp this year?
Sanford: We would love to be able to support the industry better as a whole. We are doing some things that will hopefully support agents everywhere, and not just at eXp. So, we are going to become more visible as we create more opportunities for agents to up-level their business — no matter where they are.
Obviously education and the book rewrite are part of that, but we have a couple of other things up our sleeves that we will be unveiling in the coming months.
