“The New Normal” is a multistory Inman series exploring what’s returning to normal after the pandemic fades and what will never be the same. Don’t miss Part 1 What if the brokerage of the future isn’t a brokerage at all?, Part 2 What if real estate agents never go back to the office?, Part 3 What if agent pay was more than just commissions?, Part 4 What if only 3 obstacles stood in the way of the fully digital transaction?, and bonus content What if meetings of the future actually saved time? and What if the past year made real estate easier? And join us June 15-17 when we take the conversation live at Inman Connect.
COVID-19 has introduced a host of changes to the way we live, some of which were temporary while others promise to stick around long term. Everything from permanent work-from-home (WFH) policies to the related rise in demand for rural enclaves brings with it an attendant shift in buyer demand. That means that the ways that agents serve those buyers must change as well.
Many agents consider themselves proud generalists, able to work well with all kinds of client requests and property types in wide-ranging metropolitan areas. Moving forward, agents who choose to narrow their focus stand to gain by making themselves into specialists.
By focusing on the types of properties and transactions that buyers will be most interested in over the years to come, savvy agents can differentiate their services and become truly indispensable to their chosen market segment.
Rather than trying to be “all things to all people,” they’ll become everything to a small but growing group of buyers and sellers. What segments stand to gain in the new normal?
In 2019, the Financial Times reported on the decline in luxury real estate. What a difference a year makes. One of the early and ongoing winners in the pandemic real estate market was luxury real estate.
Offering more room both indoors and out, along with security and privacy, luxury real estate demand grew throughout the pandemic while luxury markets enjoyed unprecedented levels of demand.
Luxury real estate is a market segment dominated by well-established agents, many with significant marketing resources and large teams. Agents wishing to break into this niche may find that doing so as part of an already established team — while burnishing their credentials and developing their expertise — is a great way to build their reputation, sphere of influence (SOI) and professional network.
2. Second home
Interest in second home purchases had grown 100 percent year over year by late 2020. This was attributable in part to the desire to escape high-density cities and neighborhoods, and in other part to the need for a change of scenery as the pandemic wore on.
With record-high levels of home equity and personal savings in place, many buyers are still interested in putting their money into a second home as a way to ensure the safety of their family in case of a future pandemic, as an investment or simply as a way to regularly vacation without crowds.
Real estate agents wishing to specialize in second-home properties will need a robust referral network or may choose dual licensure in a popular second-home destination. Explore reciprocity and portability laws governing your state, then determine where you might be able to set up in a lucrative location for second-homebuyers in your market.
3. Farm and land
The growth of permanent WFH opportunities over the last year meant that many high-level professionals are suddenly able to trade expensive commuter-friendly suburban enclaves for rural retreats that are more affordable and more spacious. Thus, rural areas that are normally left out of big market movements have become the epicenter of growth in demand and home values.
Real estate agents with expertise in these rural markets, and in farm and land sales stand to gain under this new paradigm. Their services can be invaluable both for individual homebuyers ready to live their homestead idyll, and for developers looking to purchase land for new construction and development projects.
In addition, content development for agents in relatively low-competition online and social media spaces may make it easier than ever to generate leads and make connections that grow their business.
4. New construction
Record-low inventory in markets throughout the country has led to a squeeze on new construction as well. Expertise and professional connections in this sector — and the ability to help frustrated homebuyers explore their options — can make a real estate agent specializing in new homes particularly valuable for the foreseeable future.
Real estate agents looking to make an impact in new construction can do so by providing value-added education and communication for their clients. Since many buyers are intimidated by the new home building process — and unfamiliar with its ins and outs — online content and expert insight can go a long way in building a professional reputation in this niche.
5. Rentals, investors and property management
As homebuyers are priced out of their desired markets, rental properties are experiencing increased demand — and higher rental prices — just like properties for purchase.
At the same time, investors may feel squeezed out of their preferred markets by record-high home prices. Real estate agents specializing in identifying bargains and managing rental properties can be a valuable asset to investors in the markets they serve.
Boots-on-the-ground market knowledge and a robust professional network are essential for finding the off-the-radar bargains investors depend on. At the same time, rental agents who work closely with tenants or real estate agents who specialize in representing renters in their market may find themselves building a valuable base of potential first-time homebuyers once market conditions and inventory return to something like normal.
Christy Murdock is a Realtor, freelance writer, coach and consultant and the owner of Writing Real Estate. She is also the creator of the online course Crafting the Property Description: The Step-by-Step Formula for Reluctant Real Estate Writers. Follow Writing Real Estate on Twitter, Instagram and YouTube.