The current pandemic has upended nearly every industry, changing the ways in which we conduct business and creating a new reality that will stick with us well after stay-at-home orders are lifted. And nowhere is this long-term impact more apparent than in the real estate market. Despite the shift from in-person interactions to virtual showings and a coronavirus-induced slowdown in home sales across the country, top real estate agents remain optimistic about the future.
“It’s fascinating to see how quickly everybody is adapting and how quickly everybody is collectively accepting that this is the new norm and that we’re all in this together,” explained Farrah Brittany, founding member of luxury real estate brokerage The Agency, on Wednesday. To kick off Worth’s newest live series, The Next Normal, Brittany was joined by The Agency’s founder and CEO Mauricio Umansky, UBS private wealth advisor Kathleen Entwistle and host Juliet Scott-Croxford, CEO of Worth.
“We’re doing things like FaceTime showings and virtual tours, combined with a more personal walk-through, and we’re seeing that it’s working in a sense,” Brittany continued. “We just had a buyer get into escrow, and they purchased the property completely sight unseen. We’re scheduled to close very quickly. I don’t think that’s the norm, but it is possible. It just shows that you have to adapt to whatever the circumstances are and make it work because life has to go on, and real estate is essential and it will continue to be forever.”
While the exact nature of what the market will look like in the coming months remains a mystery—“the big question and the big factor is going to be the workforce, the money, the economy,” Umansky said—the industry is already seeing behavioral shift from potential buyers.
“Today, while we’re all in quarantine, I think that the home is becoming a lot more important than ever before,” explained Umansky, who noted that millennial trends like micro-living and sharing spaces are destined to become a thing of the past. Buyers are more likely to look for places that can accommodate home offices or bigger kitchens than open plan layouts designed for entertainment.
“There’s definitely a lot of people who are unhappy with their homes now that they’re living in them and using them and actually want to make a change,” Umansky said. “If you’re buying a home, and you’re thinking long-term, you have to live. This is not an investment, this is your life. So, you’re investing in your life.”
And now is actually a great time to take advantage of low interest rates.
“The rates are so fantastic that we’re seeing a lot of our clients refinance right now to the lower rate,” UBS’ Entwistle explained. ”And if you think about it, with all the money that the government is spending right now, the government is basically borrowing at zero percent. So, they can do so much more with that, with the ability to borrow at such a low cost.”
“We’ve talked about [interest rates] being low for 10 years, but they’re really low now,” added Umansky, when asked what advice he’d give buyers in this current climate. “So, my opinion, right now’s a good time to go 30-year fixed and not even worry about it, particularly if you’re thinking long-term. Don’t go with a seven-year, interest-only loan, where you don’t know what’s going to happen seven years from now. It’s not getting much lower—that we know.”
According to Entwistle, buyers should think about whether or not they are happy right now and where they want to be in the future. “Now’s the time to say: Let me create what’s going to be good for me and my family and my future, and just go for it. Just put the plan in your head, and if you see it, eventually you can create it.”
