Safer at Home and Real Estate | Two Months In

Before you read my most recent musing, take a minute and watch this amazing video from my good friend Brian Hawkins. It really captures the last 2 months better than I can in words.

But here’s what I have to say.

May 19th. Two months since the March 19th Safer at Home order in CA.

It seems like that was really a lifetime ago. And in many ways it was for many of us, both personally and professionally.

Hopefully both vaccines and therapeutics are on the way soon. But even when they arrive, things may never be the way they were. Hopefully, like in other times this country has been tested we come out stronger and better. Meanwhile fly the flags should at half mast for the (as of this writing) almost 100,000 of our fellow Americans who have tragically past too soon. And their families.

THE REAL ESTATE MARKET

As I’ve written elsewhere, sales in April were way down compared to the same month last year. May looks to be on track and possibly a little bit better. But nowhere close to where the number of sales were before the pandemic.

Surprisingly, prices do not seem to have been impacted yet. But if the inventory keeps increasing and the lenders don’t loosen up, I have to assume there will be downward price pressure at some point.

In addition to being concerned about increasing inventory levels, I am very concerned about the stricter lending criteria that have been implemented.

I get it, the big banks, who are more or less the only option right now other than hard money lenders, don’t want to see their balance sheets look like after 2008 again meaning full of foreclosures and write downs.

But if they make it too difficult to buy a home this can become a self fulfilling prophesy as less sales may result in short sales and foreclosures.

Here’s some specifics as to components and players in the market.

WHAT’S THE FUTURE OF OPEN HOUSES?

I would think that at a minimum, at least for properties that people are living in (tenants or owners) Open Houses aren’t coming back until there is a vaccine. But they may never come back to the extent that they existed before the lockdown.

To start with, does anyone really want 100 strangers walking through their bedrooms and bathrooms over a weekend? I don’t think so.

Open Houses are a great source of “leads” for agents but not necessarily the best way to sell a house.

To start with you certainly get a lot of lookers who just aren’t buying. And contrary to popular belief it really doesn’t create the best selling environment. If Buyers see too many other interested Buyers, they may not even make an offer because they don’t want to get involved in “bidding wars”. Who knows, that may have been your best Buyer who got dissuaded.

Also, with the new protocol, i.e. the PEAD form, we know who is coming in and they have gone through at least an initial screening. I don’t see the PEAD form surviving past the current crisis, but screening might.

WILL THE TECH CHANGE?

Already has, and some agents and Brokerages won’t make the cut.

I’ve been doing videos and 3D walkthroughs for my listings for a number of years. Other agents haven’t and are getting up to speed on all that now and the use of 3D tours for listings has increased substantially.

Zoom has become the new normal for a lot of business and using IG and FB for “live” showings and virtual OHs have also become a thing.

But I have to think that some kind of virtual reality showing tech will be coming down the line.

As far as completing transactions, thankfully we’ve been using DocuSign for quite a while to get docs signed. I think it is inevitable that more of the escrow / loan paperwork move to entirely online platforms as well.

Apps like Skyslope have automated the back end. Many of these platforms integrate with each other so we can easily move documents from the C.A.R. Zipforms platform to DocuSign to Skyslope and collaborate and share with others in the transaction along the way.

WHAT’S THE FUTURE OF AGENTS?

Things are changing - probably will never go back to the way they were, and some agents are going to make it and others won’t.

It might be somewhat more difficult for newer agents to break into the industry in the future. I got started a long time ago when you could work someone else’s Open House or door knock until you figured things out. And there were always the friends and family members who needed to buy or sell that sometimes were your first deals. In fact, we used to say that you really weren’t in the business until you started to do business with strangers.

Because listing agents may need a greater grasp of tech and a bigger budget than most new agents have and because buyers may demand a higher level of expertise, just may be a tough road for newbies.

Or maybe they have it all figured out, no bad habits and outperform the seasoned ling timers like yours truly.

WHAT ABOUT BROKERAGES?

I don’t see how all the large Brokerages with expensive office space, high cost business models and costly management infrastructure make it. So expect to see consolidation in the Brokerage ranks.

WHAT’S THE TAKEAWAY?

Where we live is really important. There could be other events where we are at home for extended events.

And we may be working from home, teaching our kids from home, exercising and lots more.

And our health is really important.