We’re two months into the new, hopefully temporary, world order and the future of real estate couldn’t be murkier. Some agents tell me the market is at a standstill; others say they’re moving properties, albeit with some challenges. Housing prices have not yet fallen (data from March shows a revved up market flaunting an 11 percent gain from February) because there’s very little left on the market for the few remaining active buyers to purchase.
And who’s buying homes? I spoke with an agent last week who said the San Mateo County Association of Realtors had urged agents to only complete “essential” sales, which can be interpreted however you’d like. He also said he’d just sold a listing after just a few days on the market, having shown it once to some gloved-up, masked-up buyers loaded to the gills with Purell. “I had two more showings scheduled, but we got an offer,” he said.
What’s that? You can show properties? Yes, as long as the owners and/or tenants no longer live there and no more than two shoppers and one Realtor are on hand. Showing occupied homes is verboten, even if the owners are hiding out at their place in Tahoe. It’s got to be empty.
What to do?
Early on, I thought the revolution was going to be televised, that is, that agents would start using virtual tours as stand-ins for actual tours. After all, I’d been hearing tales of international buyers snapping up listings sight-unseen for years; would it be so strange for “essential” buyers to be satisfied with a video?
Virtual tours are not what they once were. Gone are the days when agents would slap together a slideshow, add some Kenny G, throw it up on YouTube and call it a virtual tour. Even the most basic 2020 virtual tour does a pretty good job of showing an entire home, and that’s not even considering high-end 3D tours that show floor plans, take viewers through rooms, offer a tool for measuring rooms and even, in some cases, take you inside cabinets and refrigerators. You could argue that a Matteport 3D tour is “the next best thing to being there.” But is it enough?
So far the answer seems to be “no.” As one San Francisco agent told me, “(virtual tours) can create great buzz, but it’s pretty rare for a buyer to pull the trigger without seeing the property and possibly having an emotional reaction.”
“I’ve heard of it,” another agent said about buying sight-unseen, “but it seems a little crazy (to purchase a home) without a walk-through contingency.” It is possible to add that contingency, say, agree to the purchase pending a walk-through when shelter-in-place lifts, but that adds a layer of uncertainty (i.e., how long will it take for shelter-in-place to lift?) that only a desperate seller, say, someone listing their home during a nationwide quarantine, could stomach.
But I may have seen the future of real estate, or at least of open houses, recently when Ed Gory of Intero in San Carlos invited me to sit in on a “virtual open house.” I joined six agents and one set of buyers on a Zoom call where we watched as a seller, armed with an iPad, took us around his home. We definitely got a good sense of the house, the neighborhood, specifics about the work the seller had done, plus a nice story about some wood he’d purchased from Neil Young. Gory followed up with a more streamlined tour, to fill in some blanks.
I’m not sure it could replace public open houses, but I could see the virtual tour replacing Broker’s Open, the weekly cavalcade of Realtors touring available homes to gauge the market. Hire a spokesmodel, write a script, set up a stream and off you go. Agents know what they’re looking for.
And so do some buyers. The virtual open house might be enough for them to whittle down their choices, saving time and hassles, so that the Bay Area horror story — “We’ve spent all of the past three months looking at open houses!” — could became an unnecessary relic of the home-buying past.
I don’t think the future of real estate is a work-from-home version of home buying. It’s one thing to step into a home and picture yourself living there; it’s another to do it watching a video on your iPad. But there may be a smaller revolution, based on technology, that does streamline the process for agents and their clients. Historically, realtors’ relationship with technology has been long on enthusiasm but short on application. Virtual home buying aside, this might be a good time to explore what technology can do for real estate.
The Market Musings real estate column appears every other Wednesday. Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner.