Impact of COVID-19 on the U.S. Real Estate Businesses
A new RealEstateBees.com survey of over 25,000 active real estate businesses found that despite the negative impact on their business caused by the COVID-19, more than 65% are seeing newly emerged opportunities as a result of the pandemic.
The results are part of the large scale survey—Impact of the Coronavirus on the U.S. Real Estate Businesses—conducted by the Real Estate Bees, a leading real estate platform for real estate professionals. We reached out to over 25,000 active real estate professionals from all the 50 U.S. states as well as Washington D.C. to collect their insight on the impact of the COVID-19 pandemic on the industry in general and their businesses in particular.
|Rank||Business Type||Negative Impact Index|
|1||Real estate brokerages||95.65%|
|2||Hard money lenders||95.12%|
|4||Real estate developers||92.9%|
|5||Real estate investors||89.19%|
|6||Real estate agents||81.67%|
|8||Real estate inspectors||72.73%|
|9||Real estate photographers||71.69%|
|12||Real estate schools||50%|
|13||Real estate coaches||46.67%|
Provided below statistics reflect the situation among the U.S. real estate businesses as a whole as well as separately segmented by a specific real estate business type.
The report is divided into the following two parts.
1. Multiple choice questions where the professionals had to choose one of the suggested answers to each question:
1.1 Is there a negative impact the pandemic is having on the businesses in your industry?
1.2 Has the pandemic opened any unexpected opportunities for businesses in your industry?
1.3 How are you adjusting your marketing budget?
1.4 Are you transferring your business to a “work from home” basis?
1.5 Have you noticed any benefits of transferring your business processes to a “work from home” basis?
1.6 Have you noticed any drawbacks of transferring your business to a “work from home” basis?
1.7 Will you keep your business processes transferred to a “work from home” basis after the pandemic is over?
2. Open questions that allowed the experts to share their insights on various aspects of the impact of the coronavirus pandemic on the US real estate businesses:
2.1 What are the specific negative impacts the pandemic is having on real estate investors?
2.2 What unexpected opportunities have the pandemic opened for real estate investors?
2.3 If you knew the impact of this situation on your business in advance, how would you prepare your business to mitigate your losses or even profit from it?
2.4 What marketing channels do you prefer to use during the pandemic over the rest and why?
Is there a negative impact the pandemic is having on your business?
Has the pandemic opened any unexpected opportunities for your business?
How are you adjusting your marketing budget?
Are you transferring your business to a “work from home” basis?
Have you noticed any benefits of transferring your business processes to a “work from home” basis?
Have you noticed any drawbacks of transferring your business to a “work from home” basis?
Will you keep your business processes transferred to a “work from home” basis after the pandemic is over?
What are the specific negative impacts the pandemic is having on the businesses in your industry?
Danielle Connolly, Star Properties Real Estate
Covid-19 has had an impact on several parts of the real estate market. Sellers are most hesitant to allow agents and potential buyers into their homes, and with good reason.
Many sellers are declining in person showings for the foreseeable future in an effort to keep their homes and families virus-free. This is making it moderately difficult for buyers to find their perfect home: understandably—with fewer options buyers are feeling less satisfied.
Some buyers are putting the house hunting on hold until things “settle down” and get back to normal. Of course, there is also the problem with many buyers and sellers losing income due to the closure of many businesses.
Samuel McGrath, PropertyCashin
Lenders have tightened their underwriting criteria on riskier loan categories, including many investment properties. This has made it difficult or impossible for some projects to go forward.
Private and hard money lenders who leverage their cash with borrowed funds had to restrict their own lending policies as well.
Even national iBuyer companies backed by such powerful finance sources as low-interest lines of credit from Wall Street have stopped operating (which, however, reduced the competition for smaller investors, especially those who have cash on hand).
Charlie Taylor, Snap2Close Real Estate Photography
Because of the COVID-19 pandemic, we moved into the world of 3D virtual tours and interactive floor plans. While the $3,000 USD cost for the Matterport 3D camera was significant, it paid for itself in less than 4 weeks.
We have also had lots of clients very interested in our Interactive Floor Plan service. While it took a bit longer to develop the software than anticipated, it was well worth the investment.
Since launching these services our business has significantly increased.
Domenick Neglia, Neglia Appraisals, Inc.
Most residential appraisers rely on appraisals ordered from banks for a large part of their business. Because of the pandemic, fewer homeowners are applying for mortgages for refinance purposes, and there are also fewer people buying residential housing.
This results in a negative impact on the number of appraisals ordered by banks and credit unions. For commercial appraisers who rely on sales transactions of commercial property, the pandemic has also had a negative effect because fewer properties are being purchased.
What unexpected opportunities has the pandemic opened for businesses in your industry?
Cristina Ortega, Mrs. Property Solutions
We now have the ability to help solve more problems for people than ever before! With so much uncertainty going on and so many people that have lost their jobs, when people need to sell their house to help alleviate some of the burdens that are now being placed on us, what will be most important than ever before is some sort of certainty.
With the stay-at-home orders in place, there are not as many active retail buyers that are out there. With restrictions on lending, it makes it harder to sell a house the traditional route. If you do decide to go that route, it will likely be a waiting game.
But when working with an investor that knows what they are doing, it gives you a fast and certain solution so that you can solve your problem and move on with your life.
Kristina Morales, Kristina Morales
Many people take being forced to transfer various business processes to remote basis as an inconvenience. But I think it’s a huge step in improving efficiency.
Having to work from home hasn’t impacted real estate agents very much. Agents have always worked mostly out of the office. They typically would come to the office to print transaction documents and, once signed, deliver them back to the firm for storage. Now, most of these documents are signed and stored electronically, which reduces the unnecessary back-and-forth with papers.
Today, agents mostly report to the office for staff meetings and training. Otherwise, they are out of the office more than they are there.
Linda Burtch, ABODEslc with Keller Williams Salt Lake City
The COVID19 pandemic has opened some unexpected opportunities for agents to streamline their processes and connect with people in a whole new way. From digital video consultations to virtual showings and no-contact closings, the real estate industry is evolving to better serve and streamline the whole buying and selling experience.
With the technology evolving around no-contact sales, 3D listing tours, and putting client’s safety in the forefront, we are seeing an increase in activity and happy clients all around!
Matt Speer, Keller, Craig & Associates
There are always opportunities. The pandemic has made our firm dig in and analyze the changes in market conditions. It has also led to more discussions with our clients about values, and what drives value.
These discussions have led to getting to better understand the needs of the clients, and that there are some additional services we can provide such as sensitivity analyses that let lenders know the potential range in value due to market conditions.
David Freudenberg, David Buys Houses Florida
In the long term, housing prices will become lower and homeowners will face more challenges which means real estate investors will be able to buy more houses while helping homeowners avoid financial ruin.
Craig Proctor, Craig Proctor Coaching
I just did a virtual 3 day seminar with 1200 attendees who mostly stayed \tuned-in\” for 8 hour days. I would probably not have tested that concept if not for Covid-19″
If you knew the impact of this situation on your business in advance, how would you prepare your business to mitigate your losses or even profit from it?
Vanda Martin, President, Founder at Vanda Martin Inc
If I knew this in advance? At this time, I believe we did the best adjustment we could. I don’t think I would have done anything differently. We kept our marketing budget up and going, and I was present on many platforms.
I understand that the best strategy is to be prepared. I believe we adjusted very fast, even with the pandemic. I improved and optimized my presence on Facebook. I was more present on all platforms, providing a great amount of free value and great content.
During those times of worries, anxiety, and fear, people need more help and assurance. I am not positive I would have done anything differently.
Jay Arbizu, Jay Arbizu Brokered by eXp Realty
I run a pretty lean marketing budget focused on a personal touch for my repeat and referral clients, so not much different there. But I would have better prepared myself to grow my team of agents since many couldn’t go to the office for training and many got nervous about monthly fees and costs, etc.
I would have been better prepared to offer a safe haven and alternative – even if it was just temporary until they got back to normal.
Gregory J. Rice, Nexus Property Management
I have to say that our business has remained largely uninterrupted and there is not much we could have done differently. Housing is always people’s #1 expense, so even in times of struggle and panic they still want a place to live, and thus pay the rent accordingly. Our industry is well insulated and will always remain that way.
Greg Hansen, Hansen Valuation Services, LLC
I perhaps would have broadened my client base prior to the pandemic and strengthened relationships with attorneys whose appraisal needs are not materially impacted by the virus. However, I am a small operation (I employ 1 person), and we have enough work to keep both of us busy for the time being.
Marli Welgemoed, New Silver
New Silver already offers online loan application and approval, but if we had known we would have introduced remote closing as an option.
What marketing channels do you prefer to use during the pandemic over the rest and why?
Deidre Quinn, Deidre Quinn; Keller Williams Philadelphia
I prefer using Zoom, video, and old-fashioned phone calls. I prefer to see my friends and clients, and Zoom has taken the place of our in-person seminars, one-on-one meetings, and open houses. I have been making more time to call my past clients to see how they are doing. I enjoy checking in on them and hearing their voices.
Jared Hoffpauir, Jared Hoffpauir Photography
I still prefer social media marketing over anything else these days, and especially during the pandemic. Luckily, in our area, realtors are considered essential business, so we are still able to team up with our loyal agent partners to aid in the quick sale of each property. The market is hot right now, and listings are selling within a week or less. It’s a crazy time for sure.
Gary DeClark, Valbridge Property Advisors
Word of mouth and previous experience have always been the best sales tools. These have been the best avenues of work generation for years. Articles, blogs, and conveyance of timely information through electronic means are also very good.
Adele Lynas, Shimmering Home Staging & Design
Marketing is difficult during the pandemic due to the fact that you can not go to their home, but we have learned to market thru videos and send them to potential clients.
Michael and Denise Zehr, Armadillo Properties
Certainly our website has become more important for attracting tenants, owners, buyers and sellers. We increased our advertising on Zillow Rentals for our vacant properties.
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