With the coronavirus pandemic slamming the entire economy, everyone in the real estate industry is likely to see a loss of income, and the near future will be defined by chaos and hard times, according to @properties co-founder and owner Thad Wong.
“It’s going to be a trying time for a lot of real estate companies over the next year,” Wong said Thursday.
Wong made the comments during Inman’s inaugural Town Hall, a digital-only event. Wong appeared at the event along with Anne Jones, owner of Windermere Abode, and Renee Funk, owner of the The Funk Collection at eXp Realty. All of the panelists appeared remotely.
During the conversation, Wong said that his company — which is based in the Chicago area — is working hard to help agents make it through the ongoing virus outbreak. They’ve put together resources on getting loans, and are trying to make the process of getting aid “idiot proof.” Some office staff have also been furlough, though they are collecting unemployment and will return to their jobs once the crisis ends.
But despite those measures, things are still going to be hard. Wong noted, for example, that a small business loan program that could be highly beneficial to brokerages is facing some serious obstacles.
“The banks distributing this amount of resources is going to be impossible,” Wong said. “I’ll predict two to three weeks to a month of sheer havoc.”
Wong also predicted that in the short term the current crisis could be more difficult for some real estate professionals than the recession of 2008.
Jones agreed that the industry is now facing significant challenges. She works in the Seattle area, which was the first metro region in the U.S. to see a significant virus outbreak. And over the ensuing weeks, she said some buyers’ financing has fallen through and some “sellers are pulling back because they don’t want to leave their homes right now.”
“It’s going to be a long haul,” she said.
The comments came the same day that new numbers showed 6.6 million Americans filed unemployment claims last week — a staggering number that is unprecedented in the history of U.S. unemployment claims. A recent poll also found that more than a third of consumers already believe the country has entered a recession.
And a series of drops in the stock market has also hammered the economy during the pandemic.
While there’s an abundance of bad news, Thursday’s panelists also said that this moment represents a time reassess and regroup. Jones, for example, said that her team is “revisiting how do we do this job” and how to best engage with clients.
And Funk, who works in the Orlando area, urged real estate professionals to emphasize the health of both agents and their clients. She added that mental health in particular should be a focus during the crisis.
“Mental health has to be at the forefront right now,” she said. “We can relate to every human being right now which should give us that equalizer on the empathy front.
Some experts also see a light at the end of the tunnel.
In another panel discussion during Thursday’s town hall, Jim Walberg — a Compass agent working in California’s Bay Area — said that so far he isn’t seeing prices falling thanks to the crisis. Price changes will largely depend on neighborhood, but at least so far Walberg feels optimistic.
“I’m pretty confident in our specific market,” he said.
Nina Dosanjh — an agent at Vanguard Properties who also works in the Bay Area and appeared on the same panel Thursday with Walberg — said that she thinks home prices could ultimately drop somewhat if “you see this going on longer.” But even so, she anticipates an eventual recovery.
“Overall I think the economy will bounce back,” Dosanjh added.
In the meantime, Wong suggested real estate professionals look at the pandemic as a chance to grow. Though the crisis is a terrible thing, he also argued that “any time you face an obstacle it’s an opportunity.” Wong went on to point out that his own company grew significantly during the Great Recession, and that “the goal after this is to be the leader not the follower.”
“It’s tough to keep the deals together,” he said, “but you can do it if you work hard.”
Update: This post was updated after publication with additional information from Thursday’s town hall.