Is 2023 a year to forget? That’s what we’re supposed to say after a tough year, right? In the case of the mortgage industry, 2023 was not a pretty one. According to the Thomvest U.S. Housing Report, purchase loans were down 22% and refinance loan volume was down 65%. Home affordability was at its lowest point in decades and the real estate industry was shaken up by massive class action lawsuits. Layoffs and job reductions had a personal impact and took a toll on thousands of people within our industry.
In short, most of us had to manage with less in one way or another. Less volume, fewer resources, less capacity and less budget. The rapid pace of change from the highs of 2021 to 2023 happened at breakneck speed, driven by one of the most aggressive monetary tightening cycles in history. Navigating this change has taken a combination of determination and empathy that has tested leadership decisions in new ways.
And yet, in the midst of the fray, some lessons and achievements have emerged and they should not be forgotten. To be successful in 2024 and beyond, we need to hold on to these lessons and build upon them. There are new skills that developed last year that are specific to 2023’s market climate. 2024 could be the perfect year to start to employ these new skills, as we expect to see improvements in mortgage rates and housing supply, but only if we insist 2023 is a year to remember.
One of the first leadership lessons that became apparent in a constrained environment was learning how to adjust strategy to fit the current team and resources. I played enough team sports growing up to know that if the starting roster changes, the play selection typically needs to change as well based on the strengths of the new players. This concept doesn’t always feel that straightforward in business where letting go of familiar processes and certain ways of working can be hard.
Most humans don’t like change, and when dealing with the emotion of missing former coworkers it is easy to look backward rather than at what lies ahead. However, people are also amazingly adaptable and when faced with new challenges can be incredibly creative. By changing strategy to lean into what works with different team members and new client contacts, I have seen some real breakthroughs in solutions and relationships that have led to doing more with less.
Another powerful lesson has been to use constraints to create prioritization focus. When there is a roadblock in the way of something I want to accomplish, my default mode is to run headfirst toward the roadblock and remove it.
However, in a market like 2023, some roadblocks just can’t be removed, at least not quickly. I remember a well-known founder of a top lender saying to me in 2022, “I’m like a kid who made a sandcastle on a beach, and the tide just came in and washed it away. I can sit here and cry about it or I can go make another one.”
He went on to say that this is the time to manage business profitability really well, but to also use the lull in volume to lean more holistically into solving housing affordability.
That’s just what 2023 proved to be. A time to focus on managing finances well and really lean into the foundational pieces that make housing more accessible to everyone. I felt more productive in that area than any year prior and have connected with incredible like-minded people all over the industry who share this mindset.
Speaking of priorities, the last lesson I want to highlight is getting clarity on vision and goals. 2023 was a great year to find out if the things I thought were important during the height of the market are still important now. Strategy might change due to any number of constraints, but a solid mission stands the test of ups and downs.
Having fewer options helped reaffirm our mission at Clear Capital: “to build confidence in real estate decisions to strengthen communities and improve lives.” Regardless of the market conditions, striving to make a positive impact by breaking down barriers to more transparency, accuracy and fairness in property valuation have kept us on track and helped us look forward with optimism.
A recent LinkedIn commenter said I was too optimistic. Perhaps I am. But my optimism is not in the market doing what I want it to do, it is in knowing that I am surrounded by incredible people who successfully navigated 2023, know how to apply the lessons they learned throughout 2024 and who see that constraints can sometimes be a blessing. Here’s looking forward to another year to remember.
Kenon Chen is the EVP of strategy and growth at Clear Capital.
