When the recession hit and many real estate agents quit the business, Jason Stockwell’s sales kept going up.
His strategy was basic: Follow the market. He started with traditional deals but quickly shifted to short sales and foreclosures when the industry began to slump.
“I’ve never had a year that I haven’t improved,” said Stockwell, 35, who’s been a Realtor for nine years. “What I’ve done ... is always focus on what’s going on. If I see short sales going on, I go for them. If I see REOs [real estate-owned properties], I try to get them.”
Now the nimble Re/Max Results agent, who was recently named the top-selling Realtor in Minnesota for 2012 by Real Trends, is shifting his strategy again. He’s turning his attention back to traditional sales as the market moves away from distressed properties and regular homeowners are in a position to sell. It’s a key switch being seen by Realtors locally and nationwide, and could ultimately bolster a profession that took a major beating during the recession.
“The percentage of business that is related to distressed [housing] has declined over the last few years,” said Steve Murray, editor of trade publication Real Trends, which tracks and ranks agents nationwide. “We still see a lot of teams and agents who do a lot of units, a lot of that is still distressed and REO property, no question about it. However ... the mix of their more traditional, regular business has come up quite a bit in the last few years.”
Like Stockwell, who sold more than 300 properties worth a total of $41 million last year, most of the state’s top agents have spent the past few years focusing on distressed sales, but are adjusting as the market quickly changes course. “We were probably about 72 percent distressed properties last year, and now we’re about 50-50,” said Kimm Pastrana, ranked fifth in the state by Real Trends. “And we expect that to continue to decline throughout the year.”
Earlier this month, RealtyTrac reported that foreclosure filings in Minnesota during June fell to their lowest level since the end of 2006, suggesting that fewer homeowners are having trouble staying current on their house payments.
It’s a welcome change for agents, many of whom had no choice but to turn to distressed properties during the recession. The economic downturn forced thousands of Realtors out of the industry, and those who remained had to find a way to stand out. Many of them, like Stockwell, began to work with the U.S. Department of Housing and Urban Development (HUD), which sells reclaimed Fannie Mae and Freddie Mac properties and then contracts with agents to handle those transactions. Agents also work directly with banks that deal with distressed properties.
Jeremy Peterson, ranked No. 3 in the state by Real Trends, said he benefited from getting a contract with HUD two years ago. “I do a lot of REO contracts,” Peterson said. “I sell Fannie Mae, I sell government homes, and I basically went above and beyond their expectations. ... The inventory is still there for the core agents that do a good job.”
Stockwell, whose bank clients include Bank of America, said it was tough to become one of the few agents to land a coveted spot working with banks. “It is a true blessing to be lucky and good enough to work with many of these clients, considering they have thousands of agents applying and ready to take your place in a second,” he said.
He also works with MyHomeSource, a Twin Cities organization that buys foreclosed homes, fixes them up and sells them to owner/occupants.
Angela Hummelgard, operations manager for MyHomeSource, said Stockwell stands out for his market knowledge. He got his general contractor license in 2008 just to keep up with real estate trends.
“He can guesstimate, usually within a very small margin, on construction costs and things like that,” Hummelgard said. “I would say he out-hustles everybody else.”
Yet the shift back to traditional sales means easier times for Realtors, even though being part of the broader market is more competitive than being a bank’s preferred agent. A healthier market means there are more regular sellers, and that creates “more opportunity for every Realtor,” Stockwell said.
Matt Schafer, ranked No. 2 for 2012 by Real Trends along with his wife, April, said working with banks takes a very different skill set.
“To earn the traditional listings, you need to market yourself with mailers and use technology to separate yourself from the competition,” he said. “With the banks, it was all about applying and keeping a relationship with that bank by properly handling their properties.”
And an improving market lends much-needed confidence to agents, something that was lost when the housing bubble burst, said Mary Bujold, president of Maxfield Research, a Minneapolis housing research firm.
“I don’t know that people are jumping in to become real estate agents, but the market is starting to turn around,” Bujold said. “Prices are starting to increase. We’ve got people out looking to buy. I think there are a lot of positive signs.”