With the COVID-19 pandemic changing so many things about our daily lives, it’s only natural that this global event has also created new trends in real estate.
Stay-at-home orders in many states prevented real estate agents from showing homes in-person and have already resulted in a slower-than-normal real estate industry for the busy spring season. In fact, in June 2020, the National Bureau for Economic Research confirmed our suspicions that the 2020 Recession had already started.
However, there is a lot of good news surrounding the housing market. With stay-at-home orders lifting, we’re already seeing increased buyer demand and rising property values in many local markets. And you don’t need to worry about this new recession being a repeat of 2008. Since this new recession is unrelated to housing (unlike the 2008 Recession, which originated in the mortgage market), economists are optimistic that housing won’t be nearly as affected this time around.
So what does all of this mean for the industry? What are the new trends in real estate and real estate sales? And how will these trends impact your work as a real estate agent?
Here’s an insider’s look at the new trends in real estate.
Social Distancing Trends in Real Estate
2020 has become the Year of Social Distancing. And while many states are relaxing social distancing regulations, CDC Director, Robert Redfield, has warned of possible seasonal recurrences of the virus, which may mean social distancing is our new normal.
Virtual tours and open houses have gained popularity this year, with one survey showing that 30% of buyers would consider buying a home based on the virtual tour, with no in-person viewing. And many Realtors® expect this real estate trend to continue. Not only are virtual tours and open houses useful during viral outbreaks, but they’re also useful for buyers relocating from out-of-area, as well as out-of-state investors.
Social Media has also been a useful tool in social distance real estate marketing. Real estate agents have embraced social media over the last few years. In fact, the NAR’s 2019 Real Estate in the Digital Age Report cited social media as the best source for generating high-quality leads among Realtors®. So there’s no end in sight to the upward social media trends in real estate.
Closing Trends in Real Estate
Remote closings have exploded in popularity during the COVID-19 crisis...at least in states that allow for remote notaries. As of June 2020, 25 states have legalized remote online notaries (RON), and most other states have adopted emergency protocol to allow RON during the COVID-19 crisis (with California, Oregon, and South Carolina being the only hold-outs). Expect the RON trend to increase as states test its effectiveness through the COVID-era.
Closing gifts are another interesting closing trend to watch. While there is no hard data on closing gifts, industry insiders are hearing more chatter about agents eschewing closing gifts. The thinking is that you provided a professional service, so why would you give a gift to your clients upon closing? This is a valid argument. Here’s the counter-point: a strong closing gift can garner lasting goodwill, keep you top-of-mind with your clients, and even generate referrals. Ultimately, it’s your decision, but when you think of closing gifts as marketing tools, they become more enticing.
Buyer and Seller Trends in Real Estate
Stay-at-home orders have prompted COVID-19 era buyers to look for bigger homes with bigger yards. While buyers from the past decade were interested in short commutes to business districts, the COVID-19 work-from-home experiment has convinced more buyers to consider working remotely from a spacious suburban, or even rural, homes. The extra space and lower population density are extra appealing in 2020. There are still plenty of buyers entering the market!
Despite the pandemic, the US housing market as a whole is still a seller’s market. Many of the industries hardest hit by the recession (travel, hospitality, retail, and food service) are disproportionately staffed by workers who are more likely to rent than to buy. And industries most likely to produce buyers (like technology and medical fields) have thrived during the pandemic.
However, there may be fewer people willing to sell in 2020. The uncertainty of the global economy has many sellers hesitant to make a big move. Even though a recession has been declared, housing projections are still favorable. For example, Realtor.com data is still forecasting a 1.1% increase in home values over the coming year. This is far less than prior years, but a projected increase during a recession is still a good sign for homeowners.
Having said that, some local markets are likely to see a value decline, especially markets with an active tourism industry. With many people unwilling to visit tourist hotspots, vacation rental owners may be forced to sell due to the lack of cash flow.
How Key Players Have Adapted to the COVID-19 Era
Industry giants (like Redfin, Zillow, Trulia, and Realtor.com), were well-positioned to thrive through the COVID-19 era. These platforms are built on technology and work well with social distancing by the nature of online interfaces. Immediately following stay-at-home orders in the US, Redfin reported a 500% surge in the request for video home tours in a single week.
These key players are doubling down on technology, trusting that the pandemic is forcing the masses to become more comfortable using technology in this age of social distancing.
How to Apply These New Trends in Real Estate to Your Real Estate Business
So what can your real estate business learn from these new trends? Here are a few key takeaways:
Buyers and sellers are online, so it’s up to you to meet them where they are. Virtual tours are a wise investment in most markets.
Establish your social media presence or up your game. Having a presence on major social platforms boosts your credibility. But you don’t have to focus on all platforms. Choose the platform that best reflects your target market (Facebook for the Boomers and X-ers, Instagram for Millennials, etc), and spend more time on that platform.
If your state doesn’t already allow remote online notaries on a permanent basis, lobby your representative to make RONs permanent.
Invest in closing gifts, not only as a sincere token of appreciation, but also as a marketing tool.
Buyers are still easy to find. To find sellers, focus on those who have built lots of equity in their homes. Retirees looking to downsize are a solid niche in many markets.
Learn from the industry giants and continue to invest in tech.
How These New Trends in Real Estate Are Affecting New (and Future) Agents
New and aspiring agents don’t have the advantage of an existing client base and testimonials from satisfied clients. And if you don’t have your license yet, you might run into some delays with many states placing real estate exams and license issuances on hold. The good news is that online real estate classes are not being interrupted by COVID-19, so you can still progress toward your real estate license. And we have some tips to help you launch your career right in light of these new real estate trends.
You can start building your social media presence even before you get your real estate license. Of course you can’t offer your services until you’re licensed, but you can create your social profiles and start sharing market reports and articles of local interest.
Having a website of your own is vital for establishing credibility, demonstrating expertise, and ranking on search engine results. You might be surprised at how easy and affordable it is to build your own professional real estate website.
When you don’t yet have enough money coming in to invest in high-quality virtual tours, use your cell phone to record personal walk-thru video tours. You can even host virtual open houses live from your phone.
Niche down. When you compete for all buyers and all sellers in your market, you’re competing with every single agent in your market. But when you choose a niche (first-time buyers in a specific zip code, downsizers, relocating employees of a major local business, etc), you’re then competing with only a handful of other agents that specialize in your chosen niche.
Focus on the buyers and sellers most likely to make a move under current economic conditions.
Start Taking Advantage of These New Trends in Real Estate
If you already have your real estate license, take action today on at least one of these trends. Post a virtual tour, buy a closing gift, or reach out to potential sellers.
And if you’ve been thinking of getting into real estate, don’t wait another day to start your new career. Enroll in your AceableAgent real estate license courses now!