This month’s National Association of REALTORS® (NAR) Power Broker Roundtable discusses how brokers can plan for the future in the midst of COVID.
Chris Kelly, President & CEO, Ebby Halliday Companies, North Texas; Broker Relations Liaison, the National Association of REALTORS®: Real estate professionals are far from the only people trying to make sense of the COVID months. My question in terms of planning now is, how can we attempt to forecast what comes next—by harking back to the metrics and trends that marked the close of 2019 or by predicting business in the months ahead based on the levels we reached during the COVID era?
Mike Frazier, President & CEO, ReeceNichols Real Estate, Kansas City, Kansas: I don’t think it’s possible to look back, because 2019 pretty much started at a point when inventory was on the rise and prices were starting to correct. But everything stood on its ear when COVID hit, and there were more buyers than homes to purchase. It used to be that you listed your house and had three or four months to find a new property. But the new normal is that you buy first, at almost any price point, and then list—and I don’t see that changing any time soon.
Rosey Koberlein, Chair, Long Realty, Tucson, Arizona: Based on our check of seasonality factors pre- and post-COVID, we think this year is going to be very similar to 2021. The driving factors are the same: short inventory, high demand and low rates—and we don’t see those changing markedly in the months ahead. We’re comfortable forecasting that business won’t be off the charts this year, but neither will there be a retreat.
Jason Waugh, President & CEO, Berkshire Hathaway HomeServices Northwest Properties, Portland, Oregon: I think what we’re seeing now are normal seasonal conditions, and we’re looking forward to somewhat slowing but healthy conditions through this year.
Leonard Steinberg, Chief Evangelist, Compass Real Estate, New York, New York: The desire to move is still extremely strong, and inventory shortages are still fostering competition. In the high-end market, people are cashing in bonuses to buy second or third homes—and we are in the midst of the greatest transfer of wealth in our lifetime, with more parents gifting their kids money while they are still alive, often for the specific purpose of buying a home.
CK: Why is inventory so stubbornly tight?
RK: For one thing, rental rates have risen some 40% in the last four years, so the industrial buyers who scooped up properties aren’t selling.
CK: What about new construction?
RK: In our area, new construction can’t come out of the ground fast enough. But it can take years from the developer’s acquisition of land to going vertical.
JW: Developers are still facing supply chain issues, labor shortages and rising costs, but I think builder confidence is at the highest level we’ve seen in a while.
MF: And there’s a lot of dormant inventory out there—people who want to move but waited out the pandemic, or were afraid they wouldn’t find the right home to buy.
CK: We seem to be hearing a lot of confidence as we emerge from the COVID months.
JW: We are budgeting an increase in units and slowing but healthy appreciation. The job market is strong. Interest rates will still be at historic lows even as they begin to creep up. As most agree, there are benefits to a slow return to normalization.
RK: The beauty of this industry is that life goes on. People get married, have babies, pass away. There is always a need to buy and sell.
LS: The challenges are different in different parts of the country, but brokers everywhere tend to say, “We are going to have as good a year or better than the year before.”
The Power Broker Roundtable is brought to you by the National Association of REALTORS® (NAR) and Chris Kelly, NAR’s Broker Relations Liaison. Watch for this column each month, where we address broker issues, concerns and milestones.