During what is usually one of the busiest seasons of the year to buy, rent and sell properties—in an industry that relies on in-person interactions—real estate firm owners have had to take stock of a new, unprecedented pandemic housing market.
“The changes at the very beginning were very dramatic,” said Aleksandra Scepanovic, who runs Ideal Properties Group in New York City. “We went from doing business in person to taking your entire operations online.”
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She’s not alone. Female-owned real estate companies across the country have poured resources into high-quality virtual tours and have started playing therapist as both employees and clients are seized by panic over an unstable market. One has even decided to become a certified divorce real estate specialist to help guide divorcees through the selling process.
They all hope these pivots will help them keep their businesses surviving and, in some cases, thriving.
‘We’re all guessing’
Scepanovic, who co-founded her company in 2007 after working as a war correspondent in Bosnia, said that, as an entrepreneur, she usually thrives off of adversity. But Covid-19 proved a serious homewrecker.
Her firm was able to secure a federal loan, but still, compared to March, April and May of last year, business has been “dismal.” She has seen most of her commercial business come to a halt.
“We have seen a massive drop-off in interest,” Scepanovic said, adding that there has been a 15-to-20% decrease compared to last year’s activity.
“There’s nothing to prevent the virus from migrating back to New York City, so I think all of this right now is very theoretical in terms of the future,” she said. “We can’t tell what is going to happen next because we’re all guessing. Our governors are guessing. I don’t think numbers matter; what really matters is how seriously you as an individual take this.”
Still, Scepanovic is pivoting as best she can. She hired more videographers and video editors to replace administrative staff who she said left voluntarily, and launched “Showings on Demand” to give prospective buyers and renters a full virtual experience. She has also made mental health a priority for her employees.
“We are providing an option where our staff can place calls to therapists,” Scepanovic said. “We felt that was almost more important than finances.”
And she is trying to keep her four brick-and-mortar operations in Brooklyn and Manhattan running.
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Scepanovic echoed other real estate firm owners that tenants and buyers alike have shifted their priorities when looking for a home — amenities such as outdoor space, pools, washer-dryers and home offices are top of the list now.
A ‘dam building up’
In San Francisco, where the housing market is notoriously expensive and daunting to navigate, Cynthia Cummins said many deals were stalled or had to be re-negotiated when the lockdowns started. She started her firm, KindredSFHomes, just a year ago.
“We will have more inventory than we’ve had on the market at any time in the last 10 years,” Cummins said. “There’s this dam building up where people are waiting to sell. Usually May is when the biggest volume of closings happen, and that is way off this year.”
Cummins, who gives prospective buyers a waiver saying they understand they are exposing themselves to some risk before seeing a property in person, said there are many factors contributing to a market in flux.
“It’s much harder to show a property, so it’s taking a lot longer for transactions to happen,” she said. “And it used to be that if you were on the market more than 10 days, you were probably asking for too much money. It takes at least two weeks now to get an offer.”
Cummins said her firm has moved the scheduling of all appointments to an app called Calendly, and open houses are conducted on Facebook Live and Zoom before they are allowed to go back to in-person open houses July 15.
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“It’s still kind of touch and go,” she said, adding that she has not had to lay off any of her eight-member staff.
Another quirk that is not exclusive to San Francisco but perhaps more prevalent is the trend of buying homes because they would be good investments.
“People here think about their home too heavily as an investment vehicle,” Cummins said. “Maybe there’s a little tax relief, but it’s not a cash cow. I think people need to look at what home really means.”
In terms of her business, Cummins said she sold $40 million of real estate in her firm’s first year. So while there is less “upselling” in the current climate — broker-speak for trying to sell someone a more expensive home — she said she is on track to make the same amount again.
Phones ‘ringing off the hook’
While many in real estate are measuring their losses, other businesses are actually thriving in the time of corona — and using the impact of pandemic quarantines to their advantage.
Kathy Helbig-Strick, for instance, anticipates a spike in divorces as a result of couples spending 24/7 in lockdown together. As the owner of Experience Realty Partners in St. Louis, Missouri, she has seen plenty of “high-conflict situations” where couples use property as “a weapon to win an emotional or financial battle” over her 25 years in the business.
Recently, Helbig-Strick entered an online program through The Ilumni Institute in Irvine, California, to become a certified divorce real estate specialist.
“We’re kind of ramping up for that,” she said. “We’re hearing that attorneys are expecting to have rising divorce cases after Covid-19, so we’re preparing for that faucet to turn on.”
She said she will implement training programs for staff on communication, confidentiality and conflict resolution in dealing with ex-spouses.
“You don’t want us to bring dirty laundry into negotiations,” she said. “It does make a difference who is negotiating, and having a third party in the middle that has to hold everyone together.”
In terms of her business, Helbig-Strick said the end of June included “our highest-selling week all year,” with 2,000 homes that went under contract. “And we are continuing to bring on a little more than 1,200 new listings a week,” she added.
“A lot of people froze and early on we’re hearing the economy is going to ruin the housing market, and in actuality every single listing we brought on in early March and April had multiple offers immediately,” she said. “We had houses going for $30,000 over the listing price. Our phones were ringing off the hook.”
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Helbig-Strick pointed out that in the “Show-Me State,” Missourians prefer to see the property before they make a big purchase. “We’re traditional, and people still wanted to see the houses, so we used precautions to do that,” she said.
And rather than lay off staff, she had to hire an additional employee.
“I think people are reassessing their lives and saying, ‘I’ve been stuck in this house and we want something bigger or smaller or with a home office or a pool,’” Helbig-Strick said. “So it’s just one more reason to move for people, because generally people like to move every few years. It’s a great time to grab a great rate.”