It’s been a year and then some – hurricanes, wildfires, months of divisive politics…and a cruel pandemic that has thus far claimed more than 270,000 American lives.
But if there is a bright spot in Uncle Sam’s year – an unexpected stocking stuffer few could have predicted – it is the clear emergence of the real estate industry as a star in the nation’s economy.
“Realtors were as shell shocked as anyone when COVID-19 swept in early in the year and effectively shut down the country,” said Joe Clement, broker/owner and a working agent with RE/MAX Properties in Colorado Springs. “Coming off a strong 2019, it was a real blow, and it was reflected in the sharp drop in business in the first quarter of 2020.”
But Realtors are nothing if not people-persons.
“From kitchen tables and makeshift home offices, agents picked up the phone and began calling everyone they knew,” Clement said. “With business sidelined and people sheltering in place, we called just to check in, to see how friends and clients were coping, if there was anything we could do to help.”
And help they did, Clement said, educating, reassuring, sharing resources, even delivering groceries to shut-ins.
Then, as working agents will attest, a remarkable series of events coincided.
“First, real estate was declared an essential business,” noted ERA Key Realty’s executive vice president and working agent Nelson Zide in Framingham, Mass. “When the doors opened, Realtors stepped in, practicing strict safety protocols when they could show homes in person, and maximizing technology to stay connected with each other and with clients – to train, to manage, to communicate, and to show homes virtually.”
At the same time, Zide noted, masses of people stuck at home 24/7 decided they were ready for a change.
“They wanted more space, an extra office, a view, a room for Grandma,” said Zide. “And as interest rates plunged to their lowest in decades, Realtors’ phones began to ring.”
Demand and low rates bolstered a delayed spring market and drove it throughout the crazy busy summer months and well into the end of the year, Zide said – and with demand outpacing inventory in most regions, Realtors worked long hours under less-than-perfect conditions, innovating new ways to help anxious buyers and sellers realize their piece of the American Dream.
“Realtors had so many reasons and so many opportunities to stay engaged,” said Jason Waugh, president and CEO, Berkshire Hathaway Home Services Northwest Real Estate, Portland, Ore. “And consumers had good reason to have confidence in real estate and confidence in the agents who served them.”
As a result, Waugh noted, most agents in his organization worked hard enough to earn commissions 30 percent higher year over year, and they approach 2021 with equal confidence.
“Housing starts are up, which should help ease the inventory crunch,” Waugh said, “demand remains high, and interest rates will likely be at attractive levels for the foreseeable future.”
Clement echoes the sentiment.
“We are experiencing a far busier December than normal, and there is little reason to expect a slowdown any time soon,” he said. “As of November first, more than half of our 200 agents were ahead of their last year’s earnings.”
Given the increase in business that naturally follows for real estate’s many ancillary services – from mortgage lenders, title and escrow services, insurance vendors and home inspectors to movers, repairers, decorators and a raft of other home-related services – there is considerable reason for Uncle Sam to celebrate the industry’s unexpected boost to the economy.
If there is a downside to the bounty, noted Waugh, it is that pandemic-driven unemployment is making it harder for a segment of the population to capitalize on homeownership opportunity.
“That’s something we, as a society, are going to have to work on going forward,” he said. “At the same time, we recognize that Realtors, in good years and bad, give back to their communities n many ways.”
In fact, according to the Community Aid and Real Estate (CARES) Report compiled by the National Association of Realtors (NAR), 82 percent of Realtors donate money to charitable causes every year, compared to the national average of 56.6 percent of Americans who do so – and most contribute many hours of volunteer time in their communities.
It should come as no surprise then, as Clement pointed out, that Realtors were among the first to reach out with offers to help in their communities when the COVID-19 pandemic hit.
“Realtors are, first and foremost, relationship-driven,” he observed. “We take pride in the way we stepped up to a crisis, pride in the way we are navigated through it, and proud of what we’ve been able to accomplish throughout these difficult months.”