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Lessons Learned From Previous Housing Market Disruptions

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Sales + Marketing

Lessons Learned From Previous Housing Market Disruptions

For home builders navigating today's housing marketplace, hope is not a strategy, wishing is not an action plan, and success is not an accident


By Bob Schultz September 23, 2022
Learning from past housing market fluctuations
While there are no silver bullets or quick fixes, paying attention to lessons learned from previous housing downturns or corrections can be informative for home builders navigating current conditions. | Image: 130875720 / stock.adobe.com

Earlier this year, builders started to feel the good times of the past decade were over. I agree.

The few that nurture a culture of constantly pursuing excellence regardless of market conditions are prepared. But for many others, this new environment has caught them off guard. 

Successfully navigating through housing recessions of the mid-’70s, 1980s, 1990s, and the first decade of the 2000s, I can guarantee you there are no secrets, silver bullets, or quick fixes to right the ship in a storm. But what was learned during previous housing downturns or corrections can be informative and helpful. 


RELATED


The Danger of Success for Home Builders: Complacency

Anecdotal, in-person “surveys” (read: show of hands) I conduct with builders who attend our Best Home Building Practices Summit conferences and meetings, reveal that only about 10% were in business in the early 1970s, while many of those responsible for sales production today have been in the business for 10 to 15 years—a frame of reference confined mostly to the good times. 

The greatest challenge the newer builders and sales associates face is the consequence of success, which all too often breeds complacency and acceptance of the status quo. But breaking away from the status quo isn’t so easy. 

How to Approach a Home Building Market in Flux

This difference brings to mind the saying, Adversity can reveal greatness. Success can conceal it. Regardless of which of those you relate to, here are some fundamental mindsets to consider as you plot a strategic course for the next several months: 

  • Constantly ask “Doing what we’re doing, the way we are presently doing it, how many sales are we missing and what do we need to do to fix that?” 
  • No market ever goes to zero. Focus on being the best in your market.
  • Practice, drill, and rehearse to be prepared to sell to the prospects that show up … and expect high conversion rates as a result of your efforts. 
  • Don’t worry about things you can’t control:
    • The economy
    • What the competition does
    • What social media and the press puts out
  • Be focused on what you can control:
    • The direction, motivation, expectations, and accomplishments of your team, with high levels of accountability
    • Constant awareness of your position within your marketplace
    • How you present yourself on social and other media 
  • Our industry is subject to cycles, and history often repeats itself. Commit to a strategic process of transformation starting with the belief that to move forward, taking a look at the past can be beneficial:
    • Shorten your learning curve to get the results you want much quicker 
    • Learn from your mistakes, as they teach you valuable lessons
    • Remember: The Market Will Discipline Those Who Don’t Discipline Themselves 

And the Best Strategy for Home Builders Trying to Navigate the Current Market Is ...

It is often debated whether “old school” or “new school” is the best strategy. I believe it’s neither one of those but rather a “grad school” level where we are constantly learning, thinking, and growing from previously difficult market conditions and developing systems and solutions to establish and maintain a culture of high performance and sales success. 

A future article will present a synopsis of case studies showing exactly what is being accomplished in the current market by applying these and other principles.
 

Written By
President and CEO

Bob Schultz is president and CEO of Bob Schultz & The International New Home Sales Specialists. Write him at bob@i-nhss.com.

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