Have you heard this trendy acronym? I use the word trendy loosely because unless you work in management, you probably haven’t heard it. VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity. It might be a managerial term but as soon as I heard it, I thought of the real estate market. Turns out I can find a way to relate most things back to real estate.
I find it hard to imagine 2024 being more volatile than 2023. Last year was one for the books on markets acting like wild animals. We got the Fed Meeting Minutes from the day Powell rocked our world. All members seemed down with a lower Fed Funds Rate by the end of 2024, but we didn’t get any more insight into when the first rate cut would be. That is ok, because the market has built in at least 3 rate cuts in my opinion. The minutes indicated that they are aware that inflation is likely already at their target and that they risk our economic health if they remain restrictive too long.
The markets are ready for a better year, everyone is putting their party pants on. The Fed is open to removing its wet blanket and joining the fun. Maybe that points to more harmony and less volatility.
We all want to control everything don’t we? Even when we look at health. I have seen so many posts this week about how everything matters until you get sick, then you realize only one thing matters. It is very true. We make a big deal about all this money stuff over here, but the truth is if you are ill or lose someone you love – money becomes so irrelevant. Almost useless. I went down a bit of rabbit hole in my brain though. Even those posts come from a faulty spot. They want us to focus on exercise, drinking less, eating organic. All good things, all good things. But it’s still in line with this allusion that we can achieve control over our fate. Don’t we all know someone who lived the healthiest life, never smoked, never drank, went to church twice a week, rode 12 miles a day and still got cancer? We have to make our peace with uncertainty. We have to learn to do our best and accept that is all we can do. We cannot control everything. Take care of yourself – please. I’m not arguing that it’s a lost cause. I’m arguing that our obsessive need for control is robbing the joy from life not to mention giving us false assurance that we are in charge.
That was a bit of a tangent…
Dealing with uncertainty has to be a part of your real estate investing strategy. You are not going to know the exact right time to buy. You cannot time the market. You won’t know the bottom of interest rates to snag your refinance perfectly. The best way to deal with uncertainty is knowing how to make the best decision with the information available now. It’s a skill. It can be learned, developed, and practiced.
I have a strategy I use to deal with complex tasks, problems, and projects. I avoid getting domed out at all costs. When something feels overwhelming, I break it down. Here’s an example. I’m currently in a master’s program pursuing a degree in Marriage and Family Therapy. There are so many papers. Ten, twelve-page papers. That feels heavy on top of a busy family life and full-time job. The only way I get through them is to break them down. I map out everything I’ll need to do for the paper, from finding my sources to actually reading my sources to writing the intro to each section of the paper. Then I block out a little time every day for a week in advance to do that one piece of the breakdown. The paper comes together.
I handle presentations the same way. Loans, same way. You can handle this market the same way. If you have a big goal to accomplish in 2024 – map it out month by month. Then look at what needs to happen that month and make a to do list for each week.
Do not get domed out. Repeat it like a mantra.
Avoid it at all costs. Clarity attracts, confusion repels. Problem is you can’t always rely on folks to provide clarity for you. Sometimes you have to actively seek it out. I find that so often we hesitate to ask the question on the tip of our tongue. To the point that it’s actually a disservice. We end up without the information we need to take our next steps. That leaves us to make assumptions which are risky.
If you are speaking with colleagues at the office, and they are talking about something you don’t understand – why not ask them to elaborate? Sure, you risk coming across as naïve. The potential benefit is more knowledge. In my mind more knowledge always wins over perceptions I shouldn’t be bothered with anyway. If you are talking to an advisor and something they said went over your head, why not ask for clarification? It might save you from making a mistake that loses their respect. If you are guiding a client in your own industry and they seem to hesitate, or their expression indicates they aren’t following – why not pause and inquire? It’s an opportunity!
The housing market is not an easy maze to navigate. We shouldn’t make it harder by worrying about our ego when gathering information. Do whatever it takes to eliminate ambiguity for yourself.
Lots of folks seem to be anti-resolution when it comes to the new year. (Personally, I’m all for resolutions.) I have noticed that even the most skeptical seem to be down with at least choosing a word for 2024. In real estate, whether you are a realtor or buyer or seller – being agile will be advantageous this year. You can achieve that by staying informed, keeping a solid pulse on the market, connecting with the right advisors. But, in all honesty, you have to go a step further to really be agile. You have to keep your head in the right mental space. You have to avoid the doomsdayers and lazy fucks who are blaming the market for their apathy. You have to tune out your uncle who had one bad experience with real estate in 1980. You have to deal with whatever trauma you might have with money, to make sure you’re not standing in your own way. If you want to be ready to win this year, I want you to focus on being flexible and ready to adapt your strategy at any time.