With the economy finally opening back up and residential real estate showing signs of life, the so-called “return to normalcy” is shaping up to be anything but normal. Many are finding that going back to work is a harrowing journey full of face masks, hand sanitizer and social distancing.
The other post-quarantine finding that millions of Americans are recognizing is that working from home really wasn’t that bad. In fact, many employees and employers alike found it quite comfortable and even more productive.
The pre-coronavirus data is compelling, with remote-working companies reporting 41 percent fewer quality defects and 20 percent higher profitability, while their in-office peers reported that a typical eight hour-shift produces only 2 hours and 53 minutes of actual work, according to Sharon Koifman, CEO of DistantJob, a remote work recruiting firm that custom builds teams for clients sourcing talent from all over the globe. Now that a majority of the national workforce has gotten a taste of this dynamic, many are in no rush to return to their potentially germ-infested cubicles.
“Before the pandemic hit, remote working was more of a niche that worked really well for those who did it, but most larger corporations were afraid of disconnecting from their offices,” Koifman says. “However, since being ordered to shelter in place, many are finding it’s much better than they feared, and managers are changing their tunes on the practice, including major companies.”
In the past couple months, major tech companies such as Twitter and Google have announced work-from-home policies. Perhaps more interestingly, though, the financial services sector is hopping on board as well. Nationwide Insurance, Barclays and Morgan Stanley have all indicated they will be downsizing their respective real estate footprints in favor of remote working this year. Many of today’s brokerages already follow this path in order to cut overhead costs and reportedly pass on the savings to agents through more tech offerings and remote support.
While all of this is likely bad news for parts of the commercial real estate sector, it might be a boon for the residential real estate sector as the new breed of work-from-homers look to upgrade to a home office or a nicer house where they will be spending much more of their time.
“As people have spent more time in their homes than they typically do, this will prompt people to want more space,” says Brandon Hjelseth, partner/broker of RE/MAX Northwest’s Hjelseth Pilant Real Estate in the Seattle suburbs. “I think we’ll have a bit of a delayed spring market that ramps up after the July 4 holiday, and from there, I think we’ll just have a busy market the rest of the year.”
Similar trends are playing out across the U.S., even in some of the cities that were hardest hit by the pandemic, including the tourism-dependent Las Vegas market.
“In Las Vegas, it’s hot,” says broker Leslie Carver, not referring to the weather. As the team leader of the Carver Team at Berkshire Hathaway HomeServices Nevada Properties, Carver says she’s noticed a major trend toward buyers wanting bigger homes with more amenities.
“People want a dedicated office and they want to enjoy their home because they’re spending so much time in it,” Carver says. “The idea is: ‘I’m here at home more. I want to have a nicer kitchen. I want to have a pool. I want to have a nicer backyard, and I want more room.'”
To capitalize on this trend, Hjelseth recommends that agents begin staging their listings with a home office to show potential buyers what it would look like to work from home.
According to a recent report in The Wall Street Journal, the increased opportunity to work remotely could make it easier for workers who had been priced out of large coastal cities to move elsewhere to buy a home.
Between the pent-up demand from the quarantine, the historically low financing options and this new push for more space, real estate pros are expecting a flood of transactions—especially in suburban areas like New Jersey, Tacoma and Las Vegas, which are landing buyers from their respectively expensive business centers of New York City, Seattle and Southern California.
It might seem like a looming perfect storm for a bull market, but there is one challenge that could get in the way—many of the agents handling these transactions will be working from home as well.
Carver says she’s been training her team, which includes millennials and baby boomers, to work from home since the pandemic escalated, and since the initial kinks were worked out in the first month, each team member has adjusted to it and been a strong contributor. She holds regular Zoom meetings with her team and relies more on Matterport to offer virtual open house experiences.
Bringing deals to a close, though, still requires a human touch most of the time as home-buying remains too important for most people to do it through a screen. But Carver notes that just because it requires personal contact with clients doesn’t necessarily mean that it requires a brick-and-mortar office.
“Everyone is set up at home, and you’re out and about anyway,” Carver says. “We are coming out very strong.”
By Andrew King
Andrew King is a contributing editor to RISMedia.