Nick Bailey, Chief Customer Officer of RE/MAX, LLC, recently sat down with dotloop’s Orlando Ramirez, Senior Director of Enterprise Accounts, and Byrd Bergeron, Strategic Partnerships Manager, offering four key takeaways and action items for agents.
It’s the No. 1 question I get asked. What is the crystal ball for real estate? Barring any resurgence of the virus, this is what we’re seeing: Q1 2020 was pretty phenomenal for most agents and brokerages around the country. We had a really strong January and February, which led us into a much stronger March than people anticipated. There were a couple of things driving that, including Millennials, which is the biggest population buying houses, the biggest demographic in this country — bigger than what the Boomers were. So they continue to drive a big part of the market.
Also, inventory. We’ve been under constraints of inventory in most markets for several years. And what you have now is some people temporarily off the market because they weren’t comfortable showing their houses, and new houses coming onto the market got delayed, especially in April.
But in the last three weeks, the rebound of showings is at similar levels to what it was prior to the pandemic. In some states, it’s even higher than it was before. So year over year, it might be down slightly, but, pre-pandemic, when we had really strong sales, it was high. That’s a very good indicator.
So we believe that the trough, or the bottom for closings, will likely be in the last two weeks of May and the first week in June, depending by state. We’ve seen an increase in new listings come on the market. We have seen pendings increase, and so all of those indicators are going up. Interest rates are not likely to go up anytime soon. In fact, there are reports that they may even go down and a 30-year fixed could get as low as 2.5% or 2.65%. The whole country is going to refinance if that takes place. So those are all the things that are driving the supply and demand channel.
This is very different from the Great Recession, which took years. We believe this is going to be just a quick pause. What we have now, I believe, is a time in which spring inventory and summer activities are going to get shoved into one, and agents are going to be extremely busy. Some of them are busy already. We’re going to have a really solid summer season for the industry overall.
This has more of a feel of a natural disaster. So when you think about times that Florida or some of the southern coastal areas have been hit with hurricanes and wiped them out, where their economies stopped for a period of time until they could rebuild, or in California where fires impacted some of those communities in the same way, even though it’s a very different event, it has, in our opinion, similar characteristics. That business just stopped for a period of time. It’s a temporary pause. That’s the trough. And then we’re back off to the races. We believe that most areas across the country will come out of this still in a seller’s market for the remainder of the year.
Real estate is on the minds of everyone because home is the center of our lives right now in a bigger way than it’s ever been. That being said, the technology that an agent uses is for communication and efficiency. The buyer or seller pays an agent not for the medium in which they communicate, but rather, to be their trusted advisor to get them into the transaction, to get them through the transaction, to negotiate, to avoid the things that fall apart, that don’t get people at the closing table. And that is going to be unchanged.
But here’s the stinger. We should have been using some of this long before now. There’s a plethora of reasons why the industry is slow to adopt technology, but one of them is fear. We have gone through how many years of the data fear? Where’s my data going? That’s so far behind us. It’s stopped progress in our business.
The fear of data stopped our industry from innovating, and so what we’re now experiencing is those who were fearful of it are finally getting over it. If you’re not, my advice is to get over it, get over it fast because the innovation on the other side of it is what’s going to help drive business moving forward.
Interestingly, one of the guests on our recent Good Morning RE/MAX weekly virtual show was Greg Schwartz, past executive with Zillow Group, and I asked him, I said, ‘Greg, what do you think the biggest innovation in the real estate industry has been over the last 10 or 15 years?’ And he didn’t miss a beat. He said ‘eSignatures.’ It’s not what most agents in our business would say has been the biggest innovation, but it is. Dotloop sits in the center of that. That has truly been one of the most impactful components for an agent. So moving forward, what I think will be the biggest changes is outside our industry at the county level, the idea of a wet signature in blue ink needed on a deed to record it manually at the courthouse is going to be a forcing function for these states and municipalities to get on board with eSignatures. We adopted it as an industry way faster than our government entities and now it has forced them to put some of that in place. That’s a really good thing for our industry.
To your point, consumers just got the biggest education and adoption lesson in technology over the last six weeks. And so what that means for us as real estate agents, brokers and leaders in the industry is consumers have just said to real estate agents, ‘I need you to up your game because now I understand how to use this.’ So we have to be ahead of that to service consumers moving forward.
And so, I have a saying, ‘Technology’s not going to put an agent out of business, but an agent who doesn’t adopt the technology is going to put themselves out of business.’
No, no, it’s about efficiency. The difference in a mediocre producer and a top producer is efficiency. We all have only the same amount of time in a day. And so why is it that someone can sell four times what someone else can? Number one, they’re focused on money-making activities. Number two, they are finding efficiencies.
I’m encouraging agents to adopt one or two things. Don’t get overwhelmed. But think of your business and think about one or two pieces of technology that you’ve learned and how you can integrate it and be more efficient. Because if you do that, you’ll end up selling a few more houses.