Nobody could have predicted what 2020 was going to bring.
Even in the early days of the pandemic, it was impossible to know how the housing market was going to respond for the rest of the year.
But with a widely available vaccine on the horizon and Congress finally agreeing on an economic stimulus before the calendar has passed its shelf-life, for the first time in what seems like nearly a year, forecasters are growing more confident in what 2021 might hold.
Inman spoke to nearly a dozen chief executive officers last week from the biggest real estate companies in the industry. They’re predicting everything from more technology acceleration to more mergers and acquisitions in 2021.
Some of the quotes have been edited for clarity and brevity.
Realogy CEO Ryan Schneider
“I think 2021 is going to be a very good year for housing. We’re entering with substantial momentum as an industry, Realogy is entering with even more momentum and we have the benefit of low-interest rates as well as the social changes of urban to suburban, within suburban and even some people going to attractive tax and weather destinations all being a good thing for housing.
I think there will be a continuation of a divide between the biggest and best companies — like Realogy — winning in the market and I’m excited to not just have the recent momentum we’ve shown, but to share with you our end of the year momentum soon then build on that for 2021.”
Zillow CEO Rich Barton
“Across industries, the shift offline to online is accelerating. The virtual tools home shoppers have adopted for safety today will become their expectations for convenience tomorrow. The past year has also laid bare how antiquated processes such as in-person appraisals, filings, and closings need to be simplified, streamlined and digitized to meet the needs of today’s home shoppers.
As we look at the broader housing market, we believe the trends we are seeing now will have a positive and lasting impact in 2021 and beyond. COVID-19 forced us all to re-assess where and how we live and what we want and need from home. We call it ‘The Great Reshuffling,’ and we believe it will be the defining cultural trend of the decade. Demographics support our expectation of a lasting interest in home-buying, as millions of millennials are entering their prime homebuying years.
The bottom line: The concrete is setting on new digital habits for life and work as people move — or dream of moving — and technology will make it easier than ever before.”
EXIT Realty CEO Tami Bonnell
“Real estate companies and those in related industries will continue to see mergers and acquisitions. Regional companies will merge, others will acquire certain parts of the market or owners will merge people skills with tech skills. We’ll see more examples like Housing Wire acquiring Real Trends to make stronger gains in the residential space and companies buying media outlets to have better reach and new subscribers. We will see a tremendous amount of movement with brokerages and agents within those brokerages.
We’ll see the number of transactions continuing to increase; people move because of their circumstances and circumstances continue to change. There will be a stronger focus on fair housing which will be great for diversity and inclusion. We’ll see a stronger focus on affordability. While new construction will help with that, I also believe that with 72 percent of real estate investors being “mom-and-pops” some of that single-family rental will go towards first time homebuyers, not just investors, as some of those small-time investors will want to cash out.
Migration charts won’t be as helpful, because moves will happen fast as many people continue to telecommute. Luxury and second home markets will do better than they have in a long time because ‘home’ is valued now more than ever. By year-end, we’ll see some corrections when the market recognizes that some people reacted too fast out of urgency without paying attention to price, home inspections or appraisals, and we will see prices level out and consumers expecting more. For professional Realtors, it’s a combination of skillset and technology that will win in any market.”
Redfin CEO Glenn Kelman
“The obvious trend is consolidation: of a website, a brokerage, a lender, a title company, an iBuyer. For consumers, this will make moving easier and less costly. It’ll create new economies of scale across several mom-and-pop industries. It’ll drive more mergers and acquisitions.
The hidden trend is pressure on buyers’ agents, caused in part by the Department of Justice lawsuit to force commission transparency, but mostly by the increasing proportion of listings coming from cost-conscious, high-scale institutions, including builders and iBuyers.
The most unlikely trend is the real estate agent as an employee. Most agents will remain independent contractors, but with Redfin, Zillow and other iBuyers employing agents, we’ll also see the emergence, for the first time in decades, of a new high-paying, white-collar job for people from all walks of life.
And perhaps the most welcome trend is more aggressive enforcement of fair-housing laws, at the same time that our industry is reflecting on how we can serve communities of color better.”
eXp Realty CEO Jason Gesing
“We’re optimistic headed into 2021, both about the market and the prospect for growth and innovation in our industry. As the trend of people moving toward less populated metros with more affordable housing options continues, we believe we will see higher homeownership rates and the housing economy will thrive. Similarly, the sustained interest in suburbs and sales in city centers will continue in 2021, as dispersed, virtual workforces become the new norm.
This trend applies to our industry, too. Agents will lean into technology-driven, virtual brokerages. The brick and mortar value proposition of a traditional brokerage will fade fast, as more agents and their clients will embrace remote work in 2021.
Lastly, with the rise of virtual collaboration, we’ll see a surge in partnerships between large public companies, and scrappier, tech-driven startups. We’re excited about the innovation and partnership opportunities that 2021 will bring.”
RE/MAX CEO Adam Contos
“2020 taught us a lot and reminded us how crucial it is to listen to our customers and lead with kindness. It also reinforced the importance of being prepared for rainy days, keeping hyper-focused on consumer needs, and always being agile enough to shift our services to meet the changing environment.
In 2021, we expect the industry to get even more competitive. The smartest companies will be focused on being more proactive in anticipating and meeting their customers’ needs and wants, rather than merely reacting. It will raise the bar, and frankly, that’s something we’re excited about. Consumers are demanding more from the brands they choose. They want to know what a brand stands for, what it’s doing for their community, and how it can make their lives easier. Fortunately for us, RE/MAX agents around the globe represent and grow our brand by delivering outstanding customer experiences every day.
As advancements in technology continue to shape the end-to-end consumer journey in our space, we expect more brokerages to look for new income sources that expand and enhance the experience. With ongoing pressure on commissions and margins, businesses that innovate and find new ways to help people will find success in 2021.”
Latter & Blum CEO Lacey Merrick Conway
“I’m so thrilled with the fact that we’ve had such an extreme rebound from the nosedive in March and April. Similar to many other markets in the U.S., inventory is an issue but the staggering amount of pending sales and sales is pretty fantastic. I think as long as the rates are as good as they are, it will continue.
On a more local level, my concern with where we are and where we operate is that we rely so heavily on tourism and restaurants. You have to imagine at some point the layoffs and people losing businesses, all of that will have some effect in 2021 and 2022.
We’re trying to ride this wave just like everybody else and make sure we’re making smart decisions and adjusting when needed.”
OJO Labs CEO John Berkowitz
“There has been a lot of debate over the state of the real estate market in 2021: Will it crash or will it boom? While there are differing opinions at OJO Labs about where we’re headed in the new year, I firmly believe we’ll continue to see a surge in demand. The combination of the COVID-19 virus spiking, the turnover of administration, and the state of the economy will continue to spur low mortgage rates. Low rates combined with the persistence of COVID’s impact on lifestyle priorities like being near family and having more space will lead to a continued booming housing market.
The most significant change we will see in 2021 is an overwhelming importance placed on the tech-enabled agent. The last few years have seen an explosion of optionality combined with a massive increase in data transparency for consumers. With new models such as iBuying, buy before you sell, partial ownership, and innovation and distribution of data including AVMs and market forecasts, consumers will be more overwhelmed by choice than ever before.
Enter the superhero of 2021: The tech-enabled agent, ready to objectively sort through options, triage data and advise on direction. Uniquely equipped to provide clarity, tech-enabled agents will build meaningful trust in a time where that is the most valuable currency.”
Corcoran CEO Pam Liebman
“As 2020 comes to a close, the big story has been the remarkable resiliency of New York City real estate. Overall signed contracts have returned to the levels seen prior to the pandemic, and in recent months the volume of luxury sales has topped even last year’s activity. This great rebound is the result of pent-up demand, increased negotiability at the local level and remarkably low interest rates.
Today, there is a new emphasis on the importance of ‘home.’ They have served as workplaces, schools, gyms and movie theaters – and people have used their kitchens like never before. All this time spent in close quarters has caused many to take a magnifying glass to their current residence and realize its shortcomings.
With the election behind us and vaccines currently being distributed, there is an increased sense of optimism as we enter 2021. Although we continue to face inventory and affordability issues in some markets, our industry is on solid footing for further growth in the new year – both in New York and across the country. We as real estate professionals are stronger and smarter due to what we have faced, and I look forward to a brighter year ahead.”
Move, Inc. CEO David Doctorow
“The real estate industry is in the early days of a change journey. In 2021, we’ll continue to see an acceleration in applied technology to create more personalized digital experiences, help streamline transactions and build relationships between people and professionals.
The contrast in different approaches to consumer experience will become more pronounced. While some in the industry will continue to build closed ecosystems that limit consumer choice, I believe that buyers, sellers and real estate professionals are best served by an open marketplace approach – one that embraces collaboration for a best-in-class consumer experience.
One of our priorities in 2021 is beginning to address how we can leverage technology to combat biases and housing disparities in our industry. Discrimination in real estate has denied far too many people fair and equal access to the homes of their dreams, and it is up to us as an industry to take even more creative, effective and proactive steps against it.”
HomeSmart CEO Matt Widdows
“The strong real estate market is going to accelerate in 2021, leading to even more investment capital coming into play that spurs greater consolidation, technology innovations and efficiencies. Many in our industry crave stability, but I see continued pressure to lower commissions and brokerages needing to adapt or they will continue to lose market competitiveness.”