The COVID-19 coronavirus is continuing to spread—at press time, there were more than 200,000 reported cases in the U.S. According to a new report from Juwai, the biggest Chinese international listing portal, 58 percent of U.S. agents expect to earn “significantly less” this year due to the virus, and 57 percent expect the virus to affect their market for more than three months.
However, the real estate industry has shown that the world keeps turning, as brokers and agents face unprecedented challenges but find ways to adapt and serve homebuyers and sellers across the country as best they can.
How housing markets are faring largely depends on the restrictions in place at the local level, as well as the number of COVID-19 cases being confirmed. Thanks to industry advocacy efforts, including by the National Association of REALTORS®, real estate is being considered an “essential service” in many places, allowing the industry to keep providing services in areas that forced most businesses to shut down to contain the spread.
Market Impact Varies Widely
In New York, currently the epicenter of the virus’ spread in the U.S., the challenges are greater. According to the New York Times, there were more than 40,000 infections in New York City by April 1, and 1,096 virus-related deaths.
“We’re in New York and New Jersey, and all of our offices are no more than an hour from Manhattan, so we’re right in the epicenter of this outbreak,” says Joseph Rand, chief creative officer of Better Homes and Gardens Real Estate Rand Realty. “We’ve been under an ‘Essential Business Only’ order for a while now, so business has definitely trickled.”
For Rand, that means stopping showings, and transactions are experiencing delays due to the closure of government buildings, making it difficult to clear title.
“We’re trying as best we can to facilitate existing deals through inspections, appraisals, walk-throughs and closings,” says Rand. “It’s impacting everyone.”
For Ken Baris, president of Jordan Baris, Inc. REALTORS® Real Living, whose markets also span New Jersey, the challenges are similar.
“There is a noticeable impact from the coronavirus spread,” says Baris. “Many buyers are not comfortable entering houses, which has curtailed a large percentage of showings. Sellers are holding off if possible and delaying listings. Numerous active sellers have temporarily taken their homes off the market.”
In terms of investors, however, Baris says that they’re “very much out there.”
There’s also been a significant shift in the New York City condo market, According to UrbanDigs—a source for real-time market data, insights and commentary on the Manhattan real estate markets— despite an early surge of deals due to low mortgage rates as a buying incentive, signed Manhattan contracts fell by half in recent weeks, compared to the number of contracts signed in the same period of 2019.
Other practitioners have not experienced such drastic changes in their markets. In Arizona, Matt Widdows, CEO and founder of HomeSmart International and HomeSmart Phoenix, real estate has remained relatively stable.
“Fortunately, we have not seen a noticeable impact,” says Widdows. “That being said, we are seeing a lower number of pending sales for April; however, listings are maintaining volume.”
Jennifer Shemwell, president of Phyllis Browning Co. in Texas, has experienced minimal impact so far, as well.
“We did lose a few buyer contracts because of coronavirus job losses or closed businesses, but most of our deals are closing successfully,” says Shemwell. “March was a big closing month and numbers are up compared to the same time last year.”
Gusty Gulas, president of the Gusty Gulas Group at eXp Realty, and based in Birmingham, Ala., has also seen a few contracts fall through due to layoffs, but there have also been multiple-offer scenarios. In Colorado, it’s more of the same, according to Brandon Wells, president of The Group Inc., at least when it comes to residential home sales.
“For the most part, we’ve been very encouraged by how active the Colorado markets have been in the face of these new challenges from ‘stay at home’ orders and social distancing,” says Wells.
The rental segment in Wells’ area, however, shows signs of struggle.
“The Group Inc. has a property management division, and we’ve had many current tenants—who have lost employment or suffered a substantial loss of wages—reach out to our property management company,” says Wells. “They are unable to pay their rent and are asking for varying types of relief, from payment plans to deferrals, as they seek unemployment benefits or new jobs.”
A New Way to Do Business
What steps have brokerages taken to keep their businesses running while keeping consumers and agents safe? Several companies have imposed strict rules.
Either due to guidelines from the CDC or simply to help stop the spread of the virus, most brokerages have taken steps to protect their business and consumers’ and agents’ health by being proactive. According to the Juwai report, over 25 percent of agents are working from home, 24 percent are washing their hands or using sanitizer after being out and around other people, and 18 percent are taking steps to prevent sick individuals from touring listings or meeting with them.
At Jordan Baris, Inc. REALTORS® Real Living, Baris has closed all offices, going 100-percent remote. Additionally, they are no longer doing open houses, and for agents showing property, the owners must turn on any lights and open any doors prior to the appointment so no one has to touch anything when viewing a property.
“We provide instructions to the client before meeting, communicating the distance that we must keep and that we will have the follow-up after the showing in a Zoom meeting,” says Baris. “Clients appreciate this.”
Shemwell’s brokerage has also canceled office tours and weekend open houses, and showings require gloves and wiping down all door handles and surfaces. While some transaction tasks remain the same, such as signing contracts and disclosures remotely, others are less familiar.
“When a house visit is necessary, safe social distancing is in practice. Something new to us has been depositing earnest money through apps,” says Shemwell. “It is no longer necessary for the real estate agent to pick up checks.”
Wells has implemented showing policies that require brokers and agents to disclose their travel and health conditions if they have exhibited COVID-19 symptoms. Additionally, the below shows how Wells and The Group are providing essential services:
While some brokerages continue in-person tasks, practitioners agree that if it’s between making money or ensuring the safety of agents and consumers, they will always side with the health and safety of everyone over profits.
“We don’t really believe in ‘balancing’ health versus the business, not when it comes to the health and well-being of our agents, employees and clients,” says Rand. “If we have to take a financial hit, we will.”
Despite market challenges due to COVID-19, the industry is pushing forward, largely with the help of technology-based solutions.
Going Virtual and Staying Social Online
Chao Cheng-Shorland, CEO of ShelterZoom, has witnessed a surge in virtual-based applications, stating that real estate is doing a good job of adapting quickly to market forces.
“During times like these, we can use that same nimbleness to get more comfortable with technology to make our business more efficient even after everything is back to normal,” says Cheng-Shorland. “What is hurting the industry the most at the moment is no ability to effectively and remotely manage contracts, negotiation and closing. To avoid another episode like COVID-19, which sent the whole industry to a standstill, we must equip ourselves with the right technology.”
For example, says Cheng-Shorland, this is the perfect time to experiment with virtual negotiation and contract management tools without relying on face-to-face meetings.
“Clients will be much more forgiving of any glitches, and it gives you a chance to figure out what works best for both you and the parties involved in a transaction, so by the time this becomes more of a norm, you’re an old pro,” says Cheng-Shorland.
Wells has leveraged the following tools:
- Zoom for video conferencing
- Slack for internal leadership and collaboration
- Konverse for internal communications and training
- MoxiPresent for digital listing presentations and virtual buyer tours
- ActivePipe for email marketing
“Zoom has been an integral part of our communications strategy. It allows us to continue our weekly sales meetings via live stream to more than 200 people every Tuesday,” says Wells. “We have also completely revamped all of our education, training and resources to be delivered via Zoom—everything from weekly meetings, skills groups, property pitch sessions, happy hours, fitness classes, meditation and breathing! We are physically distancing but not social distancing, and Zoom has been a huge part of that.”
Newly imposed procedures allow companies to perform their work remotely, helping to lessen the burden that real estate companies are facing. In Colorado, for example, Wells says the passage of a remote notary will help tremendously.
“We will now be able to conduct many more closings via online video conference, which further limits human interaction and helps prevent the virus from spreading in our community,” says Wells.
Gulas takes advantage of his own brokerage’s tech offerings through eXp World, which allows the company to hold a virtual caravan. He also uses FaceTime for showings.
“We have switched to virtual open houses, we have had a few virtual listing appointments and buyer consultations, and we have completed some FaceTime showings for some clients,” says Gulas. “We are adapting and trying to meet our clients’ and agents’ needs on their comfort level.”
Widdows also speaks to HomeSmart’s tech abilities, as agents have access to tools at no additional cost.
“The RealSmart Agent platform automatically creates websites, YouTube videos and digital tours for our agents,” says Widdows. “We’re actively promoting training and educating through webinar technologies to teach our agents how to maximize these tools in order to conduct virtual showings, appointments and even open houses.”
Eric Benaim, CEO of Modern Spaces, a Queens-based brokerage also seeing an impact on routine showings and open houses, uses Matterport and Listings 3D for condos, rentals and sales centers, and, for internal communications, Google Hangouts, FaceTime, GoToMeetings and Zoom conferences to help the brokerage stay connected.
It’s Not All Negative
Despite the overwhelmingly negative news about COVID-19, industry practitioners have shared silver linings. Technology is not only being used for practical business purposes, but also as a morale-booster.
“To keep morale high, we are doing social activities, like a group TikTok channel, to keep work fun during this difficult time,” says Benaim.
Baris is even seeing success stories among new recruits.
“One of our newest associates, who is only weeks in the business, has placed offers and had his first contract Wednesday, March 25, when many other REALTORS® are sitting home in a panic and cannot get out of their own way,” says Baris.
At Modern Spaces, agents are also overcoming challenges to close deals.
“Real estate is driven by face-to-face interactions, though we are well prepared to conduct business virtually, with most of our new developments available on virtual platforms,” says Benaim. “For example, sales agent Sophia Park received an offer for The Farrington, a luxury condominium in Flushing, Queens, after conducting a virtual walk-through with an interested buyer.”
Additionally, Shemwell says the last two weeks of March were some of her busiest closing weeks of the year.
“We continue to list new properties and go pending on contracts,” says Shemwell. “We are thankful to be an ‘Essential Business’ in San Antonio, Texas.”
Rand, meanwhile, is seeing something he’s never experienced before.
“We are literally getting homes into contract sight-unseen, at least on the inside,” says Rand.
Overall, the community is coming together to support local businesses during this difficult time.
“We have been sharing ways to support small business owners that are being affected by the pandemic right now, e.g., posting on our Instagram about what restaurants are open for delivery or takeout,” says Benaim.
As the coronavirus and its impact on the industry unfold, RISMedia is providing resources and updates. Get the latest.
Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at firstname.lastname@example.org.