Monday, 01 June 2020

It’s A New Day In Real Estate: Conventions Change, Transactions Tick Up As The Nation Eases Out Of Lockdown

Written by Posted On Friday, 22 May 2020 05:00

It’s been a long, slow quarantine in much of the nation as we hunkered down to battle the spread of the potentially deadly and totally non-partisan novel coronavirus. But as the weather warms, and cabin fever edges out fear of the global pandemic, business is struggling to find its feet, and Americans are getting bolder.

“There’s a lot less gloom and doom,” said John Holahan, broker/owner, Better Homes and Gardens Real Estate, Destin, Fla. “The mood is optimistic, among agents as well as customers. God forbid a second wave of the virus. That could be totally devastating. But there’s a limited amount of coastline here, prices are stable, and all  indications are a surge in sales and rentals as we approach our busy summer season.”

Holahan is not alone in his optimism.

“Life goes on,” noted Jeff Detwiler, president and CEO, The Long & Foster Companies, based in Chantilly, Virginia, serving seven states and the nation’s capital. “We are concerned in general, but we believe we’ve hit bottom and moved past it. Our projections for May and June in both the Virginia and D.C. markets show a slow but steady rise in business.”

It won’t save the year as a whole, Detwiler observed.

 “New contracts are down 37 percent, and written business may be down as much as 40 percent year over year,” he said. “But people are not as fearful as they were just a few weeks back. We definitely see a path back to normalcy.”

Detwiler is aware that the financial freefall set in motion by the pandemic will shut a number of people out of the market.

“Millions of jobs were lost and many buyers who could have qualified before can no longer afford to buy,” he said, “and the mortgage market will be more restrictive. But morale here is strangely positive, we’ve done a good job of staying connected with people, and we are definitely poised to re-open.”

There is evidence of pent-up demand.

“The market has been biased for the last few months toward sellers who really needed to sell,” said Dan Elsea, president and co-owner, Real Estate One, Detroit, Michigan, where thousands of auto workers are returning to work as a stay-at-home order was relaxed.

Now there is a resurgence in interest.

“Even with unemployment here close to 20 percent,” Elsea said, “we are seeing a mini buyer bounce right now - a lot of multiple offers, and a small tornado of transactions going into contract.”

In Atlanta, where business restrictions have almost entirely been lifted, even real estate offices not yet entirely re-opened are seeing a rise in the number of calls.

“For the most part,” said Craig McClelland, vice president and CEO, Better Homes and Gardens Metro Real Estate, “fear of the unknown seems to be behind us. Prices have held steady, and we are already experiencing a spike in listings, showings, and contracts.”

Care is being taken, McClelland said, with strict sanitation rules, small groups and social distancing still in place at home showings. “But we are definitely looking at a resurgence.”

Some virtual components to the business of real estate will remain in place, perhaps forever, McClelland noted. But while March was flat, April was down, and May is expected to be off a bit, he is looking ahead toward strong third and fourth quarters.

“We will have a flat 2020,” he said. “But I fully anticipate a strong 2021, definitely the beginning of the economic correction we need.”

Most brokers are prepared to mitigate the damage caused by the pandemic.

“We’ve learned we don’t need all that square footage,” said Holahan. “And we’ve learned the value of virtual meetings, both in terms of time and effectiveness.”

But Holahan is encouraged that the market is busier every week as they approach their busiest season.

“We won’t be hiring new staff positions for a while,” said Elsea. “But depending on the length of this recovery, a couple of months of down business is not a problem.”

And the long view is encouraging.

“I think we should ask the entire industry to take a step back,” said Detwiler. “Housing contributed 15 percent of the GDP in 2019. That is considerable, and as we move past this health crisis and the huge unemployment, we have a responsibility to help in the healing.”

Realtors everywhere have to fill the funnel, he said, continuing to solve the needs of customers and help people create wealth through real estate.

“The more successful we are at this,” Detwiler observed, “the more we will be able to put the crisis behind us and help the economy and the nation.”

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Barbara Pronin

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade. She is also the author of three mystery novels and two non-fiction books.

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