Emerging Issues Facing Real Estate

With restaurants patios advertising that they are back in full swing and stores opening up once again, could everything just return to the way it was? And what would be the effect on real estate? The irony is that of all of the service industries out there, real estate was not really affected by the pandemic as much as others. Yes, we had to set limited viewing appointments, wear masks, lather up with disinfectant and remain a respectful distance apart, but in spite of things, the last year or so has been brisk! In fact, some of the restrictions made the business easier. We discovered we could do the vast majority of our job from our home offices and digitize transactions better than we did in the past. So, now that the barriers are being lifted, what now? Here are five trends we are seeing or may see in the short term:

1. Agents may not return to the office

Having worked effectively from home for the past 15 months or so, many agents have become used to working from home and mobile. They have been able to avoid commutes, juggle childcare responsibilities, work in their “comfort clothes,” and save considerable time and money. They have been able to adjust schedules around their family and work off hours as necessary to get things done. Yes, it has been frustrating at times dealing with kids rather than being available when needed. Of course, Zoom & Google Meet are just not the same as collaborating in person. Overall, however, everyone has managed to make it work, and now that we are cleared to return, many employees are just not that keen to return to the office.

2. Business is rethinking office spaces

Having discovered that a good deal of expensive office space may actually be unnecessary, many businesses are are rethinking how they use their office space. The prime example, here in Ottawa, is Shopify, who sublet thousands of square feet of office space! There is no question that in-person work has significant benefits. But there is also the reality that highly skilled administrative help is available either full time or part-time remotely. Many admins prefer to work from home to be with their children. As a result, many real estate brokerages' office spaces can or should be shrinking. Less expensive collaborative spaces may become the norm such as Staples Studio or other co-working spaces.

3. Offices are dealing with The Great Resignation

Coined by Anthony Klotz, a Texas A&M University professor during a Bloomberg Businessweek interview, the phrase “The Great Resignation” refers to the pent-up dissatisfaction many employees have endured through the pandemic as they have stayed with current jobs rather than look for more appealing opportunities. Now that things are opening up again, it’s projected that we will see a significant wave of resignations and corporate reshuffling. This is echoed by The Wall Street Journal, which stated in a June 13, 2021 article that the number of employees quitting their jobs is at a two-decade high. Rather than return to the office, many employees are looking for better-paying opportunities more in line with their skill set and values. Some are leaving the corporate world altogether as COVID-19 has reshaped their priorities and desires.

This is also happening in real estate as agents are looking around to find better deals elsewhere. At the point in time where companies (and real estate offices) were hoping to capitalize on the new freedoms and relaunch in earnest, they are forced to deal with waves of resignations, setting them back on their heels.

4. Recruiting has become more difficult

As a result of the current corporate reshuffling, recruitment is awash with emerging challenges. Employers, eager to gain traction in the reopening market, are upping the ante to gain new employees and consequently offering higher salaries and benefits. Employees, sensing they may have the upper hand, are out looking for better opportunities and raising the bar on their expectations.

We are seeing this trend in the real estate sector, as well, as agents have recently begun shifting en masse to what they feel are better opportunities and values. Not only are brokerages seeing key members evacuate, but we are also seeing entire teams jump ship and align with different brokerages. Brokerages will need to reevaluate how they recruit and what is their value are they providing to their agents if they want to build amidst the current environment.

5. Clients are asking to meet in person

Whereas the mandatory Covid guidelines opened the door to Zoom meetings and distance interactions, now that the barriers are coming down, clients are making it very clear they want to do real estate in person. In the US, crowds are flocking to open houses, buyer tours are in full swing, and clients are requesting to meet in person instead of enduring Zoom consultations.

Agents who had hoped that Zoom would have permanently streamlined some client interactions may be disappointed. It appears humans are "social animals" and people like being together and may jump at the opportunity to reengage in social contexts once again especially when it comes to home shopping. Time will tell shortly.

It is a changing world for sure, and like any new environment, it appears to be coming with a few surprises. In the short term, it appears that real estate agents will have their hands' full learning how to navigate these new waters. But we will adapt! Tell me what you think?