Remote work, office space, retail—it all impacts the residential real estate industry.
The pandemic brought about change at lightning speed. I rounded up just a few of the studies that show some of the more significant changes that will impact real estate:
Interestingly, many consumer brand companies also think some permanent changes have occurred and are betting on significant shifts in consumer purchases. Conagra Brands and Kraft Heinz, for example, are buying and upgrading equipment to make more at-home meals. Kimberly Clark is converting a plant from making tissue products from office use to home use lines. Proctor and Gamble is doing the same.
What Does This Mean for the Real Estate Industry?
You’ve heard all of this before, but it bears repeating. The move to expanded remote working is permanent for a significant share of the office-based workforce. This will cause a shift in where people can live regardless of where they work. This shift will cause more activity for housing sales in suburban, ex-urban and rural markets and potentially less activity in urban core areas.
A Shift Away From an Office-based Culture
For brokerage firms, it should mean a shift away from office-based cultures to more digitally interactive relationships. Most brokerage firms, Realtor® associations, coaches, and educators have learned that they can reach far more real estate professionals, far more frequently, and with rich content with a mixture of online interaction and in-person events.
The big challenge is how brokerage leaders can maintain, build or rebuild their cultures—moving from an office-based culture to a remote-based culture. Brokerage firms that built their businesses on in-person interactions and relationships will need to adapt to a new environment.
Technology Vital to Brokerage Functions
This is a no-brainer and was happening even before the pandemic. Technology will become vital to the functions of a brokerage firm. How agents interact with their customers, from CRM and virtual tours to online transaction processing, will all have to be enhanced for a brokerage to stay competitive and relevant. It also means using technology and information to recruit and develop agents and staff more effectively.
As Mokyr said, we are physical creatures, not digital, and in-person interaction will remain an integral part of how a business works. In residential brokerage, this will continue to be true more than in other fields.
Don’t kid yourself into thinking that it will go back to the way it was 10 to 20 years ago. Most agents and teams abandoned offices years ago when they found they could remotely work from their homes or the local coffee shop. While most home buyers won’t purchase without physically being in the homes they may want to buy, the numbers who will purchase remotely is going to grow to an unprecedented level. The pandemic accelerated changes that were already happening in the real estate industry. The idea of buying a home seen only through a virtual tour, while not mainstream, was accepted by many out-of-state or global homebuyers.
For brokers, flexibility and innovation with an eye on connective technologies and a healthy mix of in-person interaction should set you up for success in the coming year.
Steve Murray is a partner in RTC Consulting, a brokerage consulting, M&A and valuation service. He is also a senior adviser for HWMedia, the owner of REAL Trends content, rankings and more.
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