This is the third story in a multipart series on real estate and the summer market. Check back in the coming days for more, and read the previous installments here and here.
Summer should be big.
In recent days, Inman has explored the gradual recovery of the housing market during the coronavirus pandemic, and the economics of a potentially robust next few months. But to get a less academic sense of where the market is heading in the near future, Inman reached out to a broad group of real estate executives from both large and smaller firms to see what the view looks like from the C-suite.
And of those executives who agreed to speak with Inman for this piece, there was general agreement that the summer looks like it’s going to be big. Some are already seeing bidding wars. Others noted that furloughed real estate professionals are already coming back. And still others pointed out that supply shortages appear to be easing at least a little bit.
That doesn’t mean the market has fully recovered, but the takeaway was that overall, real estate executives are feeling optimistic right now. Here’s what they had to say.
Ryan Schneider joined Realogy in October 2017, and two months later became chief executive at the company, which is the largest of its kind. Overall, he was upbeat about the coming months, telling Inman that there appears to be significant pent up demand hitting the market right now and that “we’ve seen momentum picking back up in recent months.”
“I’d say at the moment it’s better than my expectations,” he added. “This comeback in late April and May has probably been a little bit stronger than I might have thought. I think its running a little bit ahead of or near what Fannie might have forecast.”
The strength of the recovery has allowed Realogy to bring people back from furloughs, Schneider said, and to increase the hours of other workers — both developments he expressed excitement about.
“I hope everybody’s back as soon as possible,” he said.
Among other things, Schneider also said he expects some of the changes the pandemic forced on the industry to persist into the near future. For example, Realogy invested heavily in various virtual technologies such as tours and remote notarization, the latter of which “took off like a rocket.” Schneider said that at this point companies lacking good technology are “likely to be left behind.”
Despite an overall positive take on the market and the remainder of 2020, Schneider did also offer a word of caution, saying it’s still unclear what’ll happen with the virus itself. That introduces a degree of volatility to the market and Schneider said as a result industry members “still have to be cautious about the future.”
Jason Gesing has been an executive at eXp Realty since 2013 and told Inman this week that while there was some uncertainty at the beginning of the pandemic, today “the vast majority of our agents are busy.”
“We are increasingly hearing stories from our agents of listings receiving above-asking-price offers or multiple offers as well as steady traffic to virtual open houses,” he said.
Gesing said this was “encouraging news” and argued that the virtual nature of his company gives it an advantage.
But he also said that “it remains to be seen what the impact of the significant and rising rates of unemployment will be on the market.” He further characterized the possible return of pandemic-induced isolation mandates, as among the challenges the market will face in the near future.
Other trends Gesing envisions playing a role in the future market include a shift among consumers to rural and suburban areas, as well as the need among real estate professionals to adapt to changing regulations.
Josh Team, who has been president of Keller Williams for about a year and a half, told Inman that his company believes May will be the low point for 2020.
“All of our data, and the activity we see within our platform, indicates we are now in a recovery,” he said, “yet a more robust recovery will likely take the rest of this year and into next.”
Team also said that with inventory low, prices appear to be holding steady. And while luxury real estate has taken a bit of a hit, “we aren’t seeing anything catastrophic” on a national scale.
Among the concerns on the horizon, Team cited the possibility of a second wave of the outbreak.
“We expect this pandemic and the resulting economic challenges will continue to fast track disruption to meet consumer expectations surrounding the real estate experience,” Team added.
Ryan Gorman, who as of this year leads a newly consolidated Coldwell Banker, told Inman that the “adage ‘real estate is local'” held true through the pandemic, with some markets experiencing greater impacts than others. However, at this point the data indicates “that business is now increasing and the summer market is poised to be very active.”
“Residential real estate is heating up,” Gorman added, “No two markets are the same, but the pickup is widespread.”
Significantly, Coldwell Banker agents in an array of different markets across the country are “writing contracts at a pace that handily exceeds the same periods of 2019” and home value appreciation is “driving a swift upswing in many markets,” Gorman said.
Gorman specifically gave the example of Coldwell Banker Bain, which operates in Oregon and Washington. The firm experienced a significant slowdown during the pandemic. But it also saw a rebound in May to the point that “company leaders expect June to be back close to 2019 levels, which would indicate a “V” shaped recovery there.”
However, Gorman also said the biggest challenge in the coming months is likely going to be inventory.
“With sellers afraid to have people in their homes and strict state orders, the last three months were further marked nationally by lack of inventory” he added. “Now sellers are telling our agents that they worry most about being able to find a suitable ‘upgrade’ with such light inventory.”
Gorman went on to say that some agents are still struggling to adapt their work spaces to the new socially distant landscape, but are nevertheless “working to get the word out that we need inventory.”
Pamela Liebman, who has held the top spot at New York City-based Corcoran for nearly 20 years, told Inman that she believes “there is pent-up demand” in the market right now.
“During this time when people have been sequestered at home, its shortcomings may have become amplified,” she explained. “Regardless if the past months have been spent alone or with others in close quarters, a change of scenery or some extra living space has likely taken on a whole new appeal.”
Liebman also argued that there are currently some “great values” available, and that skilled agents can help consumers navigate the shifting market.
“Developers and sellers of re-sale property want to transact,” she added. “The engine has been fired up again, and I am optimistic that people will be on the move in the coming months.”
New York City has, of course, also been the hardest-hit part of the U.S., and consequently faced intense social distancing and isolation mandates. However, those rules have recently begun to ease and Liebman said that her company has “a lot to look forward to” now that the area has entered the second of its reopening phases.
Brian Donnellan, who in 2019 took the reigns at mid-Atlantic multiple listing service Bright MLS, told Inman that across his organization’s footprint “we’re seeing some encouraging signs that point to a solid market in the coming months.”
“In the last couple weeks, new listings are nearly in line with the previous year, new contracts continue to see steady growth, and showings are above last year’s levels,” he added.
However, Donnellan also said that inventory is likely to remain an issue, despite seeing more listings hitting the market. Moreover, he believes the “real 800-pound gorilla” is a potential second spike in coronavirus cases.
“I know we’ve come a long way with the use of technology and virtual open houses, but it would be naive not to think that a return to something resembling lockdown mode wouldn’t have a profound effect on the market,” Donnellan concluded.
Ryan Rodenbeck founded Spyglass Realty in 2008, and the Austin, Texas-based brokerage now has more than 30 agents. Rodenbeck told Inman that the market in his region is extremely active and in the coming months he expects that trend to continue.
“All of my agents are dealing with multiple offers,” he added.
Rodenbeck said low inventory remains a major hurdle for the market, though he anticipates more listings becoming available as pandemic-induced isolation restrictions let up. And ultimately, he expects the market to stay active into the fall, though there could be something of a slowdown corresponding with the upcoming presidential election.
Rodenbeck additionally said the pandemic is having an impact on the types of environments agents want to work in. Many in his market, for example, are “looking for something more boutique-y,” meaning they want a brokerage that’s “localized” and where they can focus on collaboration and form a strong sense of community.
Either way though, Rodenbeck added that this particular moment is one in which real estate professionals can potentially thrive — as long as they are proactive about growing their abilities.
“It’s not a time for agents to relax in what they’re doing in helping clients win bids,” he concluded.
Updated: This post was updated after publication with comments from Keller Williams President Josh Team.