COVID-19 and Real Estate: Staying Productive and Preparing for the “New Normal”
The ongoing coronavirus crisis is unlike anything we’ve seen in recent memory. Its impact, as dramatic and devastating as its arrival was sudden, is already reshaping modern life as we know it and is bound to leave significant, lasting changes.
In the previous installments of Agent Image’s COVID-19 blog series, we discussed how to safely and responsibly navigate the real estate market in the midst of the coronavirus pandemic and what you can do to keep your real estate business relevant during this time of crisis.
This time, we’re looking forward and focusing on how to prepare your real estate business so that it can not only survive, but also thrive in the “new normal” of the post-pandemic world.
The new normal
As of June 1, 2020, the Centers for Disease Control and Prevention has recorded 1.78 million cases of COVID-19 infection in the United States—a number that includes more than 100,000 deaths.
As the nation attempts to return to normalcy, several states are already in the process of gradually easing restrictions, most of which have been in place since early to mid-March. But with renewed outbreaks in Germany, South Korea, and China, it’s clear that we have yet to see the last of COVID-19. This health risk will remain a significant part of our reality until a legitimate vaccine is developed and effectively distributed.
What is the new normal for the real estate industry?
With so many restrictions in place and new rules of engagement being applied to our day-to-day interactions and activities, the world as we know it is changing right before our very eyes.
The real estate industry is caught right in the middle of this abrupt evolution.
Shelter will always remain a basic human need. But the process of buying and selling homes—a process that has always been best facilitated through face-to-face interactions and in-person site visits—is taking on new forms as the pandemic prevents people from making close contact with one another.
This is where your expertise and services as a real estate professional can bridge a crucial gap during these challenging times.
The state of real estate right now
Keeping up with the latest and most relevant information is essential if you want to stay on top of your game during this time of unrest and uncertainty.
Here is a quick overview of the general trends that best describe the real estate market amidst the ongoing coronavirus crisis:
The CoreLogic Home Price Index reported that home prices were on an upward trend right before the COVID-19 crisis hit. Prices in March 2020 were up by 4.5% compared to March 2019, a notable increase from last year’s 3.6% year-over-year gain.
The National Association of Realtors (NAR) reported that pending home sales dropped by 20.8% in March 2020 compared to the previous year, right when widespread area lockdowns and social distancing orders began to be implemented.
Delistings hit a record low in April according to Redfin. Nearly 75,000 homes for sale were pulled off the market throughout the 28-day period that ended on April 9. The same period last year accounted for only 47,000 delistings.
Mortgage interest rates are dropping to record lows. As of June 1, 2020, the interest rate for a 30-year fixed-rate mortgage was at 3.52%. It dropped by 6 basis points from the last week of May.
However, lenders have been tightening their credit score requirements in light of the health crisis. For instance, Chase now requires a minimum credit score of 700 for a home loan, while online mortgage company Better.com requires 680.
Millions of people have lost jobs due to the outbreak, causing potential homebuyers to lose their primary means to afford a home purchase. In April 2020, the unemployment rate jumped dramatically to 14.7%. Not only is this an all-time low for the United States labor force, it is also the largest over-the-month increase in history, as last month’s unemployment rate was only at 4.4%.
Whereas spring typically sees the most activity in real estate transactions, this year paints an entirely different picture for the supposed peak home-buying season. Lawrence Yun, NAR’s chief economist, projects that “sales activity could be down 30% or even 40% in the next [few] months.”
Big cities, vacation properties are the most at-risk markets
Large metropolitan areas are emerging as the most vulnerable markets during the COVID-19 crisis. Consider how the New York City region quickly became the epicenter of the coronavirus outbreak in the US. More than half of the entire state’s 347,936 cases have been recorded in the country’s most densely populated city.
With social distancing turning into a practical—and even an essential—way of life, homebuyers are considering fleeing to the suburbs altogether. Not only will this limit their risk of catching the coronavirus in crowded urban communities, they are also seeing the lower cost of living as a necessary buffer in case the economy slides even further. It also helps that flexible and remote working arrangements are becoming more widely accepted as part of the new normal.
It may still be too early to tell whether the preference for suburban homes will become a lasting trend, but this change in perception is worth observing moving forward.
Aside from location, certain types of properties are also notably more vulnerable as a result of the COVID-19 crisis.
Vacation rental property owners, for instance, immediately suffered the consequences of domestic and international travel restrictions imposed to curb the spread of the coronavirus. As if having hundreds of prior bookings being cancelled by customers wasn’t already a huge loss, several local governments have also ordered that short-term rental properties cease their operations indefinitely.
How are luxury markets affected?
Luxury property markets are more of a mixed bag. Area lockdowns and travel bans are dramatically limiting opportunities to facilitate and close high-value sales, especially through deals involving wealthy foreign buyers.
There are still notable exceptions, however, that give players in the luxury real estate market plenty of confidence.
Despite the outbreak, Los Angeles County still recorded 82 sales of homes priced no lower than $5 million in March and April combined. This total includes 14 luxury properties tagged above $10 million. During the same period last year, the county recorded 85 luxury property sales.
It can be argued, however, that most of these deals were already in the escrow or closing stages when the pandemic hit, thus leaving the parties involved little incentive to cancel.
It remains to be seen whether this steady level of performance can be sustained if the outbreak persists over the next few months.
Light at the end of the tunnel
Recent developments are giving real estate professionals plenty of encouragement, hinting at early signs of a quick rebound for the industry.
In the same article that reported on the record number of delistings in April, Redfin asserted that most markets are already on the path toward a rebound. By the end of the week ending May 1, there were around 62,000 new listings nationwide. Even in Chicago, where COVID-19 cases are still on the rise, the real estate market is exhibiting resilience in the face of the ongoing crisis.
The iBuying sector—real estate investment companies that use automated valuations and online technologies to buy homes sight unseen—are beginning to resume operations. With the return of companies like Opendoor, Offerpad, and RedfinNow, reluctant sellers will have more incentive to put their properties on the market again.
The volume of home purchase loan applications has been increasing for four consecutive weeks, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. The Arizona, California, and Texas markets are leading the pack in reviving homebuying activity as states begin to gradually reopen.
Are you ready to take your real estate business into the new normal?
Uncertainty, along with the challenges that come with it, is something we must continue to live with until the coronavirus threat is mitigated. Regardless of when that happens, our collective experience through this pandemic will leave us with new perspectives, strategies, and means of carrying out our routines and responsibilities.
Real estate professionals have exhibited commendable adaptability and resilience since the crisis started
One of the most encouraging things that we’ve seen is how quick real estate professionals have pivoted since the onset of the COVID-19 outbreak. Agents and brokers actively explored alternative methods and approaches to staying productive amidst these unconventional circumstances.
Realtors observed how their clients responded and behaved as stay-at-home and quarantine orders were issued. They took note as people resorted heavily to online resources for both work and leisure. They paid attention as video conferencing apps became an integral part of everyone’s social experience under these circumstances.
Agent-client interactions have increased on social media and video conferencing as a result. Online home tours and virtual document signing solutions have emerged as viable alternatives to in-person meetings which are either difficult to conduct or no longer allowed.
Realtors also lobbied for the government to designate the real estate business as an essential service—and, for the most part, succeeded. Because of this, agents and brokers in many states were legally allowed to operate despite lockdowns and business closures in their communities.
There is plenty of optimism in the industry because so many have exhibited and adopted a resilient attitude. With this mentality, you too can put yourself in an excellent position to rebound and thrive when current restrictions are completely lifted.
What you can do to prepare your real estate business for the new normal
If you are still trying to figure out what you can do to adapt to the new normal, here are eight tips that will point you in the right direction:
Re-entering the workplace
As more markets begin to ease restrictions on essential travel and work, brace yourself for another wave of adjustment. While your goal is to reestablish a regular work routine for yourself and your company, you must also incorporate strategies to ensure safety and comfort for everyone involved.
The health and safety guidelines issued by the CDC, World Health Organization, Occupational Safety and Health Administration, and your state and local governments are excellent places to start crafting your workplace re-entry strategy.
The National Association of Realtors also created this checklist that covers essential steps and tips to preparing your physical workplace, as well as your colleagues and staff for the transition.
Re-assessing the function of the home
Do you still understand what people in your market are looking for in a home? People’s priorities and perceptions of essential home needs may be changing significantly as a result of the pandemic.
Go back to the recent news that more people are considering the suburbs as a safe haven from crowded, urban infection hotspots. What does this mean for your local market? What other recent reports or trends have relevant implications on your real estate business?
Adjusting to the buyer’s or seller’s changing needs and expectations
As we are all seeing each day, the COVID-19 crisis is a time for adaptation for everyone. Being in the business of providing an essential service, it’s important to always be two steps ahead of your customers.
The best way to do this is to pay close attention to the latest developments, both in your local market and on the national level. Don’t limit your observations to real estate-related matters, however. This is an especially important time to be receptive about subtle, as well as obvious changes in people’s behavior, preferences, and attitudes.
Rethinking the way we do business
The last few weeks have offered plenty of proof that there are more ways to operate a business than those we have always been used to.
While most people still have limited opportunities to step outside and move around, you might find your business having some time to spare. Use this time to reassess how you can maximize productivity and opportunities for your company. Look for the systems or processes that can be made more efficient so you can hit the ground running when the crisis is over.
Take time to explore the various technological tools and solutions that you can leverage right now, as well as in the post-COVID-19 future. Video calling applications like Zoom, FaceTime, Skype, and Google Hangouts have already proven invaluable—not just for conversations, but for home showings, as well. What else can you tap into?
Yaza, for example, allows you to attach pre-recorded home tours on virtual maps of your area, enabling house hunters to preview a property inside and out straight from the listing page.
Notarize.com and DocuSign provide secure online platforms for you to use when you need to accomplish paperwork remotely. Or perhaps you can ask title companies in your area if they are offering “curbside signing” services while real estate customers remain on lockdown.
Updating marketing initiatives and strategies
Being empathetic and sensitive toward your clients is just as important as any adaptive business maneuver. Now is a good time to reevaluate your marketing efforts to ensure that you are communicating the right message.
Before the outbreak, aggressive and straightforward calls to action were harmless. Under current circumstances, these may make you come across as out of touch with the rest of your community. This can hurt your brand or reputation in the long run, so check any ads, website content, or social media posts that you scheduled in advance for potentially insensitive language.
To adjust your marketing angles, you have to understand what the world at large is going through. Keep your finger on the pulse of your local community before crafting any new marketing messages or content.
Being present for clients who put their real estate plans on hold
Many current and potential real estate customers have put their plans on pause due to the unpredictability of the COVID-19 situation. Make your reputation as a professional and local community expert count by establishing your presence during these challenging times.
Do you have warm leads with pending transactions? Give them a call to provide updates on your local market. Even if the situation is shaky at best, your insights can provide the reassurance that these clients need amidst this time of great uncertainty.
Now is also a great time to maximize your engagement on social media. You can amplify your role as a reliable and responsive local resource on popular platforms like Facebook and Twitter. With practically everyone staying at home, glued to their screens, you have a captive audience that can benefit from your extensive knowledge—from the latest health guidelines to featured local businesses that are offering their services amidst the lockdown.
Embracing the convenience and practicality of outsourcing
Any real estate professional with an eye toward significant business growth should not be afraid to accept that outsourcing tasks will be inevitable at some point.
Now that we’re seeing how effective virtual solutions can truly be, it’s time to consider outsourcing as an essential step toward streamlining your real estate business operations. By tapping into the skills of other dedicated professionals, you can focus on your own strengths and not spread yourself too thin with a multitude of tasks.
For real estate professionals, there are several aspects of the business that can easily be relegated. Data entry, for example, is an essential part of your customer database management, but it can be tedious and time-consuming to the point that it distracts you from interacting directly with your clients.
Consider running and managing a real estate website, as well. It certainly pays to have a solid presence in an increasingly digital business landscape, but this is a multifaceted undertaking that requires a collective, rather than individual, effort.
An excellent real estate website is more than the sum of its parts. You need an eye-catching and intuitive website design, as well as regular production of high-quality content. You likewise need to have meticulous search engine optimization, along with strategic social media management.
Managing your own expectations
As you put in the effort to keep your business alive and relevant, put things in perspective, as well. Even though there are plenty of viable workarounds to our current situation, this still is a time of crisis.
On top of everything else, always remember to look out for yourself. Pressure and isolation can easily accumulate, so take time to pause and allow yourself to relax and recover every now and then.
The future of your real estate business is what you make it today
As global management consulting company McKinsey has put it, “a crisis demands boldness and learning.” The COVID-19 outbreak may have shocked the entire world at first, but the world has responded with innovation and reinvention to cope with the most devastating impacts of the disease.
To stay afloat and succeed in the new normal, real estate professionals should embrace change as an inevitable part of the business. As early as now, equip your business with an attitude that favors empathy and engagement, continuous learning, and openness to bold choices. With it, you will be all set to go full throttle when the time of the coronavirus threat finally ends.
How Agent Image can help you
Need a helping hand as you navigate the new normal? Agent Image offers a full suite of real estate internet marketing and web development services that include web design, SEO, PPC, social media, and content development. Connect with our digital marketing and design experts today to learn more about the solutions you can tap to keep your business highly productive despite the challenges posed by the COVID-19 pandemic.
Do you have a COVID-19 story?
How has the coronavirus outbreak affected your business as a realtor? What have you done so far to adjust to the current events? Do you have tips for your fellow realtors? Tell us all about your COVID-19 story by sharing it below or sending us an e-mail at [email protected].
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