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What a difference a few months make. In February, when I became CEO at realtor.com, the industry was expecting a competitive spring homebuying season, with reaccelerating home prices and decreasing days on market. Fast forward to today, and the industry continues to confront the immediate challenges and demands facing real estate in the midst of a pandemic, while anticipating a return to “normal” in the hopefully not-too-distant future.
COVID-19 is a game-changer. There’s no doubt it’s going to transform how people buy and sell real estate in the months and years to come. In that way, it’s similar to how innovations like the internet and mobile phones forced companies to adapt to survive — and many that embraced these changes actually thrived.
Unlike these developments, however, COVID-19 adds a layer of existentialism to the mix, in that it has led many of us to question the meaning of home, community and connection on a deeper level.
On a very basic level, the value we place in our homes has never been more salient. We see messages and marketing from companies and organizations across the spectrum encouraging us to “stay home.” It’s no surprise that #StayHome has been one of the top trending hashtags in the U.S.
As people stay home, they’re also looking at homes, and spending more time doing it. In the first quarter of this year, our average monthly unique users grew 6% year over year. On average, the time spent on realtor.com per visit increased 14% in the first month of many stay-at-home orders across the U.S., based on our internal metrics.
COVID-19 is changing consumer expectations about home search. Because many shoppers can’t physically tour homes for sale right now, they’ve embraced virtual home tours. Agents who create and upload video tours are helping their clients gain an advantage in today’s marketplace — we’ve seen dramatically higher engagement and visits to properties with video content since shelter-in-place orders began to take effect. In fact, according to our internal metrics, unique users doubled for listings that have virtual tours between March and April.
Another trend is the growth of livestream open houses — scheduled, live events in which agents showcase a listing and engage with home shoppers in the moment on any one of several digital platforms. Within one week of making this option available on our site in mid-April, we saw availability for these live tours double. As more agents become comfortable with the format, livestream open houses have the potential to replace, or at the very least supplement, traditional, in-person open houses even after social distancing measures ease.
Lenders have also had to shift ways of doing business, and as we move forward, the process of obtaining and securing a mortgage is likely to be very different as a result. Many lenders are tightening underwriting requirements amid rising unemployment, decreased earnings and turmoil in the secondary mortgage market.
At the same time, we’ve seen adaptation and innovation. Some lenders have adjusted notary guidelines to help facilitate electronic closings, and many states allow digital notaries. In the near term, FHFA has made it possible for many lenders to use desktop and exterior-only appraisals to approve loans backed by Fannie Mae and Freddie Mac, to reduce the need for in-person inspections.
Then there’s the psychological impact of this public health crisis and its impact on where and how people want to live. Not surprisingly, many of us aren’t looking to make a big move. In recent weeks, we’ve seen more home shoppers searching close to home than looking outside of their home metropolitan areas.
However, when people are ready to make their next move, their decision-making may be affected by their current shelter-in-place experience. Our research indicates that home features related to quality of life are most important to people who are currently searching for a home. In the wake of COVID-19, people are looking for homes that are in quiet neighborhoods, have outdoor spaces and are close to neighborhood amenities like grocery stores and pharmacies.
While we’ve yet to realize the long-term impacts of COVID-19, real estate professionals can apply lessons learned thus far to best position themselves and their businesses during the current crisis and well into recovery.
Go virtual.
The trend toward virtual experiences and engagement will only accelerate. Consumers will respond to agents, brokers and lenders who can create digital marketplaces and leverage resources that improve and enhance the real estate journey, both online and in the real world.
Get your systems in place.
Today’s consumers want things to be easy, on-demand and customized to their needs. COVID-19 has only heightened those expectations. If buyers and sellers can’t get what they want, when and how they want it from you, they can easily find somewhere else they can get it.
Keep it real.
At its core, real estate is still about relationships. COVID-19 has had a profound impact on our collective psyches and sense of community. Home purchases and sales are often precipitated by major life events, and most of us will have experienced at least one of those this year, or know someone who has. As technology will continue to transform industry practices, our fundamental approach must remain grounded in the very personal business of bringing people home.