As 2022 chugs to close, eXp Commercial is poised to navigate choppy financial waters and shifting markets in 2023, thanks to economist and futurist KC Conway.
As 2022 chugs to close, eXp Commercial is poised to navigate choppy financial waters and shifting markets in 2023, thanks to economist and futurist KC Conway.
This article, "Preparing To Pivot: Build Your Skills Arsenal Now For 2023 Layoffs," was authored by eXp Commercial President James Huang and originally appeared in Forbes Business Council on October 27, 2022.
With predicted layoffs on the horizon in 2023, are you prepared to pivot if your job lands on the chopping block? You can take steps now to make sure you’re ready if you find yourself on the wrong end of a pink slip, so you can turn what seems like a professional crisis into an opportunity to grow.
When change is on the horizon, the ability to pivot gives you options when other people only see closed doors. The time to build your axis to pivot around is now, before you need it, so you can move quickly and seamlessly into a new job, position, entrepreneurship or a new industry if necessary.
I know this from personal experience. Back in 2009, I lost my business in the real estate crash. It was the lowest point in my life, but I recovered and built three companies during that time that are still in operation today. So I’ve been there before: where suddenly my life, business and entire industry changed practically overnight, and I had to pivot quickly to survive. If I had to do it all over again, this is what I would have done pre-crash to protect myself from a jolting job loss.
When my business crashed, I hustled to find ways to bring in revenue fast. I used my forced “free time” to consult, and I even bartered my now-empty office space to entrepreneurs for services I needed.
You’ve heard of the importance of developing multiple streams of income. This is why. You never know when one stream is going to dry up, but you’ve got to keep the water flowing to keep food on your family’s table. Develop your skill sets, talents and hobbies into things that can bring in revenue now. Even if you don’t end up laid off, a side hustle can turn into a successful entrepreneurial venture and free you from the corporate grind.
Keep your LinkedIn profile up to date and continuously add more value in the forms of connections, certifications, volunteer experience, etc. You’d be amazed at the opportunities that will find you via LinkedIn. I still get job offers from my LinkedIn connections, and though I’m very happy with what I’m doing professionally, it’s always good to feel wanted.
Successful small businesses are often built during economic downturns. If you find yourself unemployed, it may give you the accidental drive, time and motivation to strike out on your own.
Find a mentor, read copious books on entrepreneurship and develop the operational and leadership skills you’ll need to build your own business. Some of these skills include learning how to research the market, write a business plan, identify your narrative, calculate costs and more. The better prepared you are to start your own business, the more likely you are to take a leap that can change your life.
There’s no greater asset during a downturn than the people you know. With every person in your network, you gain access to knowledge, wisdom, support, advice and invaluable connections that can turn into opportunities. Keep networking enough, and eventually, you’ll hit the radar of someone who can open doors for you.
I’ve found that volunteering and taking on leadership positions in philanthropic organizations is a powerful way to build not only connections but the necessary leadership and organizational skills to succeed as an entrepreneur. Plus, having all those organizations’ names on your resume builds prestige.
The lucky thing about living in today’s world is technology can help you do almost anything. From starting your own consulting firm to offering courses online, building a social media following, developing a product or building a brick-and-mortar business, there is technology out there that can help.
From Uber and Lyft to Etsy and Udemy, there are so many ways to make a living via technology. Plus, with the internet, you’re not tied to a location anymore, either. You can live in an area with a lower cost of living and work anywhere in the world.
Lots of people have ideas, but the secret sauce is having the guts to pull the trigger. How many times have you said to yourself, “I wish I would have done that 10 years ago?” Entrepreneurs joke about being an overnight success when they spent years honing their skills, building their networks and expanding their knowledge. Your journey starts now. Begin taking action today to build your skill set, network and knowledge, and you’ll be ready for whatever the future brings.
The original article, "eXp Commercial Economist KC Conway Offers Insight and Tips on How to Pivot During Strong Economic Headwinds," was published on LinkedIn on October 27, 2022.
As the U.S. confronts inflation and, increasingly, signs of a recession, eXp Commercial called on economist and futurist KC Conway for his take on what’s ahead. With 2022 Q4 in the headlights, and instability forecasted for 2023 and beyond, Conway delivers a master class on current and coming market conditions. His advice serves as a blueprint for all real estate agents – commercial and residential – on signs to look for and steps to take to navigate strong economic headwinds.
The following are key excerpts from this dynamic Q&A between eXp Commercial President James Huang and KC Conway:
The Federal Reserve is in panic mode on inflation. The inflation metrics are all coming in hotter and indicators for inflation are double the expectation at 8.5%. It would be a lot worse if we hadn't tapped the strategic petroleum reserve to bring gas prices down.
But inflation is not abating, mortgage rates have risen to 7%, throwing cold water on the residential real estate market. On the commercial side, banks are essentially being told by the Federal Reserve to quit lending. So you’re starting to see deals being canceled.
“I think we face a very, very challenging fourth quarter ahead of 2023. We're going to have to dust off some skills that take us back to the 1980’s. How do you finance and get the market moving in a high inflationary market?
“This is only about the fifth time since post-World War II that the global GDP is down to the 2% range. Each of those times have been very serious times not only for the global economy but for us here in the U.S. So the kind word to say is ‘it is not great.’ ”
Residential real estate leads in a recession and commercial real estate follows because they are dependent. And right now “the rooftops” of residential real estate are telling us their problems.
So commercial lags. We're just starting to see all of the commercial property price indices starting to turn downward. In fact, they essentially were about 0% in the latest month. Other takeaways:
There is a term influence density. It’s where you have density of housing in the suburbs where the houses are actually occupied, and you have households that have good jobs. People can work and they’re doing pretty well. It’s in those pockets where you can do quite well in retail.
A shift is taking place from a West Coast-centric model to a supply chain that moved to Chicago and the East, and to a more North-South concentration. The Port of Savannah and other East Coast, Gulf Coast and South Atlantic ports are seeing great expansion of ships and goods.
Long Beach and Los Angeles used to dominate but that’s not the case now. We’re seeing shippers use the Panama Canal and come into Savannah and Charleston. We’ve also seen New York overtake California ports as the busiest container port in North America.
Additionally, those container ships are leaving East Coast ports loaded with grains, agricultural goods, durable goods and manufactured goods. That mitigates shipping costs vs. 60% of ships leaving California ports empty.
The young workforce – the Millennial workforce, the Gen Z – cannot buy housing. They have student loan debt. They don't have the credit. They don't have the cash savings, and they can't afford a 7% mortgage.
We're going to have to see some innovation on the mortgage side to bring them into housing. The supply will add maybe 450,000 to 470,000 new apartments this year, and that'll be a record since the 1980.
But if you look at the top 50 markets, that's a thousand units that does not make a dent in the supply shortage. So rents are going to continue to rise 6-8% and 10-12%, especially in markets like Texas and Florida and other inland markets where the workforce is going.
“They are shut down. They can't sell the homes because of the mortgage rates. They can't build them at the cost and the price point that work. So housing is completely shutting down. Look at the big public builders, especially with a lot of speculation inventory. They're in a lot more trouble.”
The United Arab Emirates, Israel, South Korea continue to look to the U.S. for cash, 401K and other asset investments. They are in a position to buy for cash deals that are falling out of escrow here.
“What's happening is that with our stronger dollar and because we're raising interest rates … our 4% looks very attractive to other parts of the world paying 1% or less. So we're seeing more of that money go into U.S. dollar denomination, and that further drives the demand for U.S. assets with such a strong dollar.’’
Conway on Europe’s woes: Europe is going to be very, very challenged. They're looking. Where can they go to a safe haven? They're going to have a tough winter this year with the energy issues and companies having to idle plants.
“The Fed has put the UK in the same position that we were in in 2008 and Lehman Brothers. They've locked up the capital market side, so we better be careful because Europe is a very important customer and ally for us. The Fed needs to take on a third mandate, which is do not destroy Europe.”
There’s a lot of talk about a soft landing, about whether or not we’re already in a recession. There’s talk about two more quarters before some of these measures start to unwind inflation and housing costs. That’s not going to be the end of it.
“I don't think a soft landing is in the cards, and anybody that keeps talking about it, I think they're being very disingenuous to be honest with you.’’
Steve Forbes in the 1970s invented a phrase called the “Misery Index.” He took unemployment and inflation and put them together and we got to a peak of about 13%. That formula has been modernized. They added the S&P 500 because now almost 60% of American households own stock in some capacity.
“Right now, you end up with a Misery Index of 29 compared to 13 in the 1970’s.”
What the Federal Reserve does in November and December, and depending on whether energy costs go back up after the November midterm elections, and what kind of increase there is in unemployment:
“I think there is more pain ahead. There will be no recovery in 2023. We can get a real shock in mid-2023 and see we’re now 6-8 quarters into negative GDP. We’ll see the damage we've done to the housing industry, which is 40% of our GDP. We’ll see the damage we’ve done to our retail industry and to the consumer.”
“Maybe at that point both political parties in this country will come together and say we’ve got to deal with this. Maybe they put things in place in early ‘24 or late 2023 to give us some hope. But the best case is the second half of 2024, but I honestly think we’re really at the year 2025 or 2026 before we start to see recovery.”
“Those underutilized or vacant retail or restaurants that – if you had a little bit of capital and you could cloak it under a clean energy upgrading for efficiency. You can get all the capital, fix the building, never have to go to a bank and get turned down or wait six months”
This article, "Four Things I Wish I Had Done Before The Last Market Crash," was authored by eXp Commercial President James Huang and originally appeared in Forbes Business Council on July 12, 2022.
The tech stocks are crashing. Consumer confidence is dropping. A recession is coming. And now it’s time for business owners to mentally prepare for the monster that’s on the horizon. Otherwise, you’ll be caught like I was in 2009, when the housing market crashed and my business went under almost overnight.
When that happened, it was like a nuclear bomb went off in my life. It wasn’t just my business on the line, it was my self-worth. I’d seen people in that same scenario who were ultimately unable to handle the humiliation of watching everything they tied their identity to crumble, and they left the industry they had devoted years to building. After going through it myself, I can understand their pain.
I never want another person to go through the emotional devastation I experienced in 2009, so I wanted to share four strategies I wish I had known that could have helped me better prepare for and weather the market crash. Follow these steps to prepare yourself so you can handle whatever the economy throws at you, while keeping what’s really important—your mental health—front and center.
Kenny Rogers said it best: “You gotta know when to hold ‘em and know when to fold ‘em." Knowing when to give up on a losing investment is a powerful skill in any market, but especially so when a recession is looming.
When the crash of 2008 happened, I over-leveraged myself trying to protect a losing asset because I wanted to save face. If I had sold everything and started buying single-family homes, I’d be retired right now. Instead, I went broke trying to save a sinking ship.
Know when to walk away—from an investment, a job, a relationship, whatever it is in life that isn’t working for you. It hurts in the short term, but it will save you a lot of regret in the long term.
Humans are social creatures. As much as we pride ourselves on independence, the truth is, we need people around us—particularly when times are hard.
Start building your network now so that if your business takes a hit, you’ll have people to support you. It’s like in zombie movies where all the humans stick together. As a tribe, we can survive.
Focus on creating relationships with people in all types of industries now so you’ll have an advice and support system later. Your family and friends may not always understand your struggles in business, but other business leaders and entrepreneurs will. Surround yourself with people who are non-judgmental and who lift you up. You’ll need them to lean on, and they’ll need you, too.
Now’s the time to figure out where your business can become leaner should you need to cut costs. That doesn’t mean cutting costs just yet, but preparing a plan just in case.
Understand what your debts and assets are. Look at your expenses to see where you can make cuts. What could you sell off if you had to? Talk to your accountants, and truly gain an understanding of the financial state of your business.
Get your house in order now before the bottom drops out. You don't want to be left in a desperate position, making decisions out of fear.
When disaster strikes, whether it’s a recession, an illness, a divorce, or something else, the best weapon we have is our own mental toughness. When our minds are strong, we can make better decisions that help us survive the storm.
Gratefulness and resourcefulness will take you a long way toward making it through a market crash with your mental health intact. Remember, it’s just money. It’s not your self-worth. There’s always more money to be made, and the most successful people you know have gone through the “lose it all and rebuild” cycle multiple times. You’re in good company.
I cannot stress enough how much sticking to a daily routine will help you avoid a downward mental spiral during a crisis. Keep exercising, eating right and getting enough sleep. Your mind can’t function at its best if you’re tired, nutrient-deficient or inactive.
Recessions happen. Markets crash. There’s not a lot that any of us can do to prevent it. But what we can do is take steps to mitigate the effects in our own businesses, lives and minds. When you are surrounded by the right people, have a plan, and take care to remember what’s really important, you may come out of the next recession stronger and more resilient than ever before.
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
This article, "Building Professional Skills With Volunteering" was authored by eXp Commercial President James Huang and originally appeared in Forbes Business Council on April 6, 2022.
Why do you volunteer? If you’re like most people, you do it because you want to give back to your community and do some good in the world. But volunteering can build more than good karma. It’s a great way to develop skills and connections that can advance your career and help you leave a legacy beyond your professional success, all while helping others. Think of it as doing well by doing good.
I thought I had it all. The commercial brokerage firm I built employed 150 commercial brokers making $2 billion in sales every year. I was riding high. I had made it.
Then 2009 hit, and the Great Recession took it all. I mean all of it. I ended up having to borrow money just to stay afloat. From $2 billion to begging for loans was a big, humbling kick in the face.
My pity party continued until one day when I woke up and thought, “Is money all I’m known for? Is my legacy my 15 minutes of fame for being really successful?”
I knew I needed something more. I didn’t want my identity only tied to my financial success. I wanted something so that if I lost everything again, I’d still have an identity, a legacy beyond just dollars in a bank account.
In 2009, I started volunteering. I was determined to find my purpose and help the world in the process.
Not only did volunteering help me find my own passion and purpose, but it kicked open the doors of professional and personal development as well. I went into the idea of volunteering thinking I’d be doing good for someone else. I never had any idea I’d be the one who got so much from it.
My biggest surprise from volunteering was that I learned so many valuable business skills in the process. Nonprofits are notoriously short on high-quality help, which means there are ample opportunities for building skills all over the management landscape. Here are just some of the valuable skills you’ll learn when you work with a nonprofit.
Leadership Skills: Not everyone has an opportunity to be a leader in their jobs. But in a nonprofit, if you put your heart and soul into the cause and work hard, it’s not that difficult to rise to a position of leadership. You’ll learn what it takes to lead people, including goal-setting, motivation and problem-solving, and you’ll develop the interpersonal abilities that make people naturally want to follow your lead.
How To Run An Organization: You’ll likely have lots of different tasks in different departments, so you’ll get a clearer overall picture of what it takes to run an organization, from menial tasks like ordering supplies to 30,000-foot-level organizational planning.
Influence: In a nonprofit, you no longer have the power to motivate people with a paycheck. So you’ll have to flex your leadership muscles in other ways—like influence and encouragement—to get people to do what’s needed.
Event Planning: Nonprofits run on fundraisers, and that means putting on events. You’ll learn everything from booking caterers and talent to the ins and outs of marketing and registration.
Financial Reporting And Accounting: If you end up working in the bookkeeping department or as a treasurer, you’ll learn budgeting, reporting, bookkeeping and more.
Public Relations: Appealing to the public to support your organization is a huge part of what makes nonprofits tick. You’ll gain experience talking to reporters, giving presentations at public events, working with the media and more.
Fundraising: Fundraising and marketing are close cousins, and you’ll learn a lot about how to get people to open their wallets by working at a nonprofit.
When people in the nonprofit see what you’re doing, business opportunities will follow. Remember, nearly everyone volunteering has a professional career outside the nonprofit, too. Once they see how passionate and productive you are, they’ll likely approach you with opportunities in both business and life.
On the flip side, if you go into an organization and do a bad job, people will notice. Always remember to take your volunteer work as seriously as your day job, because both will have a big impact on your reputation in your community and your industry.
When I started volunteering, I just said yes to every opportunity. I learned a lot, but I burned myself out, too. There’s a better way.
Instead, start where you’re already interested. What I’ve found is that it’s best to volunteer in something where you already have an interest, curiosity or passion. Find something you love, and then find a way to volunteer at an organization that supports it.
Signing up to be a member isn’t enough. You’ve got to get involved, and the more involved you can be, the better. Take on a leadership role if you can, because this is the position that will teach you the most. If you are serious about taking on a leadership role, some organizations will even pay for your training.
When I first started volunteering, I said yes to everything, which turned out to be too much. Because I was overcommitted, I let people down and didn’t do my best work. Make sure you manage your time so you can always deliver your best.
In 2020, I was approached by one of the largest real estate brokerages in the world with the opportunity to launch a commercial real estate division. The opportunity crossed my desk primarily because of the network and leadership abilities I built through volunteering.
Today, after seizing the opportunity and becoming president of eXp Commercial, now one of the fastest-growing commercial real estate brokerages in the country, I’m very happy with where I am professionally, but that’s not my only legacy. Volunteering has helped me gain purpose in my life, and it’s taught me invaluable lessons both in life and in business. Find something you’re passionate about and donate your time, and you’ll build your legacy and skills, too.
eXp Commercial is an eXp World Holdings, Inc. (Nasdaq: EXPI) company.