Trend Spotting: How to Recognize Trends and Act

Do you ever feel behind the eight ball when it comes to figuring out changes in the market? For example, you hear of a sales associate who is killing it in the REO market when you just realized that it was a niche you should pursue? Most of the time, if you're reading about trends in the newspaper, you've already missed your chance to be an early adopter. But, if you know what to look for in the market, you will see the signs for an emerging trend.

Leo Pareja, a team leader with Keller Williams Realty in Reston, Va., is a master of knowing what to look for when spotting new trends in the market.

Pareja got wind of the market shift a couple of years ago before it even occurred and pared down his team from 18 people to 10 people in anticipation of the slow market. He started personally investing in several rental properties well before prices started heading upwards. "I bought as many as I could. The last four years were your best buying opportunity in years," he says.

In the past several years, Pareja has focused on REO and short sale properties, but now shifting his business to the future—traditional sales. How is he able to spot trends and act? Here are his secrets:

1. Watch business trends. "I read a ton—macro and micro economics, indicators, trends. I also mastermind with business owners outside of my industry," says Pareja. In fact, he noticed a trend with some business owners that it was getting hard to find good talent. "That's a good indicator that real estate will get better in the next few years." Pareja reads the Washington Business Journal, and The Wall Street Journal, and he uses the Flipboard newsreader app, which allows him to pick different feeds of news to read. "I get a lot of trends through social media. I read the posts by other professionals."