The COVID-19 pandemic and its ripple effect on the economy presents new challenges for nearly every sector. Businesses are coming to terms with a new normal that includes many employees working from home, the need to continue business while accommodating for social distancing and an increased reliance on technology for essential business services to function. The real estate industry is no exception. Sellers, buyers, agents, brokers and property management service providers have deployed a variety of tools and practices to tackle some novel challenges posed by a novel viral adversary.
Certain changes may be temporary, even if they extend beyond the pandemic and into the early stages of reopening the economy. It is suggested that restaurants will reopen, initially with limited capacity. People are sure to resume traveling and staying in hotels around the world, though airlines now require masks and may implement staggered seating at first. In the real estate industry, which has always revolved around and heavily depended on live contact, buyers and sellers will resume in-person meetings and showings once it is safe to do so — albeit with new tools at their disposal.
Longer-term changes that may impact the industry remain unknown at this stage, but the pandemic has accelerated a number of existing trends in how real estate professionals provide value to clients, giving us a glimpse into the possible future of a post-crisis market. Understanding these changes now will help the industry meet the challenges of the pandemic and position itself to deliver excellent service going forward after restrictions are lifted.
First, the interest in virtual showings will likely remain strong for the near future. At Ideal Properties Group, we launched our “Showings on Demand” platform in March to help our brokers show listings and give virtual tours to potential buyers or renters. Parallel to launching the new technology, we completed a merging of the new tools with a pre-existing system, an effort which resulted in a full-cycle digital alternative to standard practice. The use-case for this virtual service will extend beyond the current pandemic crisis to other situations where clients simply aren’t able to see the property in person, whether they’re sick or unable to travel.
Another trend gaining strength is the increased need for residential property managers to extend their service offerings to ensure the safety of tenants and compliance with social distancing practices. Routine, visible cleaning, including wiping down of surfaces such as doorknobs and mailboxes, helps instill in residents the confidence that their building is safe. The use of digital and autopay collection of rent is increasingly attractive, as are other technologies that already were seeing increased adoption, such as key-less entry. Both physical and digital tools and processes are more crucial than ever to the industry’s business models.
At Ideal Properties Group, we’ve always invested in building our own digital ecosystem, developing an infrastructure that has helped to ensure we can champion the technological tools we need to deliver high-quality service to our clients during the pandemic. However, many firms rely on third-party tools; according to Crunchbase and Pitchbook data collected by TechCrunch, investors poured nearly $16 billion into real estate-related startups in 2019, most of it into proptech.
Technology has already changed how the industry operates, and the pandemic has led to increased adoption of certain niche products that address specific challenges. However, some of these technologies are likely to drive future innovation in the sector, especially key differentiators that prove to offer real cost savings.
For commercial real estate, some questions investigate the very nature of the future of work. How will office buildings change to accommodate returning employees? How long will changes last? Some see the pandemic signaling the death of the ubiquitous open office concept. The same discussion sees the concept of co-working dramatically shrinking. Still, that discourse predates the pandemic, with the debate centered around issues of privacy, productivity, collaboration and creativity.
As authorities start reopening the economy, the most obvious changes will likely be made to facilitate the return of workers while the pandemic remains a threat. These include the use of plexiglass barriers and a lockdown of communal spaces, but it is unclear whether large-scale structural changes to the architecture of office space will remain a going concern once the crisis subsides.
The impact of the pandemic will depend on which solutions to the current challenges are tailor-made to address temporary changes to the way we live and interact with each other and which reflect preexisting trends. The real estate industry has experienced a mixture of both, from increased adoption of emerging technologies that will likely continue, to specific solutions to maintain social distancing, which may not. The outlook remains uncertain, but monitoring these trends is critical to preparing for a post-crisis environment.
The aftermath of our unrelenting viral opponent is not the first storm that real estate has weathered, and although each crisis brings its own challenges, we look forward to a positive return to normal for our brokers, agents, customers and clients, as well as the industry as a whole.
Aleksandra Scepanovic is managing director of Ideal Properties Group.
