M. Ryan Gorman doesn’t think the recent real estate boom is about to go bust.
That was the takeaway from a conversation Gorman — the president and CEO of Coldwell Banker — had with Inman in recent days to discuss the state of the housing market and what things might look like going into 2021. The conversation came on the heels of parent company Realogy’s record-breaking earnings report, which revealed the company saw a spike in revenue and managed to gobble up market share in recent months.
There is still, of course, plenty of uncertainty in the market, but in light of the record earnings Gorman, at least, was optimistic.
“Even with a continued pandemic,” he argued, “there can be continued strength in housing because of the underlying drivers.”
According to Gorman, those drivers include the fact that lately Americans have been moving based on their needs, rather than purely due to market conditions. So for example, a family might have chosen to relocate for more space. Or office workers might have decamped to their dream cities because they don’t have to show up in person any more. In other cases, families might have combined households, for instance, by welcoming a grandparent or other relative into the home.
These trends have been accelerating throughout the pandemic, of course, but Gorman sees them continuing into 2021 and consequently fueling a healthy real estate market next year.
“Those things are all driving housing needs in a really healthy way,” Gorman said.
Gorman’s comments are also in line with Realogy CEO Ryan Schneider’s take on the market. During the company’s earnings call last week, Schneider pointed to things like low mortgage rates and said that “we believe we stand to benefit substantially from a growing transaction market in 2021.”
In Gorman’s case, he added that he doesn’t see the recent hot market as a fluke, and he further envisions real estate staying active even in November and December — two months that are traditionally slower.
One of the big caveats in all of this is supply. The conventional wisdom is that in many U.S. markets right now the supply is exceptionally low. But Gorman pointed out that the distinction between inventory and supply might need rethinking, because ultimately the number of transactions taking place right now is also high.
“Homes are staying on the market for very short periods of time today,” Gorman said. “And yet we’re still able to find homes for people.”
Either way, though, prices are also rising, which Gorman said could “certainly entice people to perhaps list their property when they weren’t going to list it” — an outcome that could potentially alleviate supply issues in some markets.
“More and more people are realizing that the best thing for their family is to move,” Gorman added.
Beyond sales, Gorman also went on to speculate that current market conditions could lead to growing ranks of real estate professionals. The most obvious reason for that is because “strong markets attract new professionals who want to ply their trade,” Gorman explained. But more people may also enter real estate because other industries have suffered during the pandemic.
“Some people have been displaced from their jobs and real estate historically has been a career that is explored after other careers,” he said, though he also added that it remains to be seen how many new agents will manage to become productive in their first years on the job.
Finally, Gorman told Inman that the current market dynamics might disproportionately benefit certain players. Not surprisingly, he believes Coldwell Banker will be one of those players. But his broader point was that middling agents will have a harder and harder time keeping up with the agents and companies that have the most listings and who are perceived as industry experts.
“This particular period of time is really going to disproportionately benefit the best in the business,” Gorman concluded.