A booming housing market gives generously, forgives blunders and hides mistakes. A slowing market exposes mismanaged companies, weak leadership and alpha-male executives.
The controversy at Better Mortgage two weeks ago was not just another case of an insensitive and out-of-control CEO.
Instead, it was the tale of a bubble bursting, in this case a 75 percent drop in refi volume. Better responded by firing 900 employees. It was probably a necessary business decision, but not handled well and certainly not part of the original plan for a fast-growing fintech company. Arrogant leadership — untrained in managing cycles — turned the incident into a public fiasco.
Zillow’s sloppy retreat from iBuying is a tamer version of the same story. Market whiplash, slamming a company that once seemed invincible, wiping out $20 billion of shareholder value.
Even the shocking mortgage lender brawl earlier this month in an Atlantic City casino has its roots in the market shift.
Anger is one reaction to shattered expectations. You cannot pick a fight with an unforgiving market. But when egged on and drunk, these days someone might randomly sucker punch an innocent competitor. They are fighting their own fears.
Like the violent drama on airplanes, you can blame whacko passengers, but a pugnacious virus and all of its consequences is the underlying culprit.
Get ready for more tales of woe, as the overheated housing market cools.
Events and trends are stacked up against us right now: the latest COVID scourge, rising interest rates, sky high home prices, spiking inflation, a shaky stock market and an uncertain economic outlook for next year.
This may not lead to some haywire collapse, but the environment is fragile.
Most real estate pros are consummate cheerleaders for everything that is good about investing in a home. Some are also masters of deluding themselves about their own business prospects when the market weakens.
Now is the time to take stock, stay clear headed, be realistic, do not overreact and build a Plan B should things go sideways. Hold onto your liquidity and see where we stand through the beginning of next year.
Revive your 2020 plan for coping with a pandemic and make it a priority to stay connected with new and old customers. Last year, you delivered awe-inspiring essential services. The situation is different this time, but your vigilant presence will be as important.
We are tested and measured by how we handle difficult times.
An endlessly rewarding market puffs up our self importance. A less forgiving one reminds us that the most valuable things in our professional lives are earned, with determination, grit and hard work.
What happens next is our own making.
