The start of the new decade has not been easy–the COVID-19 pandemic has caused global tumult, economic uncertainty, and continues to pose serious challenges for a real estate industry built on face-to-face interactions. But, real estate is resilient and real estate professional work hard to adapt to increased virtualization, strengthen relationships with clients, and continue to build their businesses. A strong base of knowledge is key for agent success, and Rental Beast wants to makes sure all agents are aware of key real estate trends and ready to act. After three months of stay-at-home orders, states are loosening lockdown restrictions, we’re taking a look forward and sharing our analysis of some of the key real estate trends we’ve been tracking. Scroll down to see our take on increasing rental commissions, the dwindling dream of a V-shaped economy recovery, and other key real estate trends.
1. Social Media Is a Marketing Must-Have
This isn’t the first time virtualization has made its way onto our list of must-watch trends. We’ve been tracking this trend for some time–digital methods have been poised to replace face-to-face interactions for the last few years as real estate agents and landlords cater to renters who move across state lines to find homes, and tech tools gain in popularity. Lockdown orders only accelerated the industry’s reliance on screens, virtual meetings, and web-based communication.
Now more than ever, social media marketing must be a serious part of any real estate agent’s marketing scheme. According to RISMedia, real estate agents are investing big time in virtual showing capacity and we’re on-board, too. But, remember, it’s not just where you market. It’s how you market, too. Real estate agents must adapt their messaging to a COVID-related world by sharing listings that have virtual showing capacity, leading with empathy, and making sure to stress the importance of an agent.
2. Video Tours Are Here To Stay
Video tours will emerge victorious in a post-COVID world. They’re easy (and getting easier as they gain in popularity), and offer serious benefits to real estate agents. As states struggle to choose a reopening schedule that works, and potential renters hunker down, virtual tours are a reliable safe haven. However, think beyond COVID. With virtual tours, out-of-state renters can decide which apartment they want without travel, and a roomie on vacation will be able to tune in to get the full scoop. Virtual tours are very well-suited to apartments.
Of course, agents are still super importance pieces of the process. It’s no secret that the camera distorts. Real estate agents can get their clients the real scoop on what apartment looks like, what the space will fit, the area, and the price.
3. Defensive Spending Habits Reign
Even as the economy recovers from COVID’s shock, consumers may be wary to open up their pocketbooks to make big purchases. Unemployment is falling, but still high (the labour bureau reported 11.1% as of July 2020). The economy is getting more jobs, but the situation is complicated, and employers are scrambling to virtualize their businesses or find another way to keep their doors open as concerns about a second wave of COVID mount. Suffice to say defensive spending habits will be the norm for everybody–agents, brokers, and landlords, alike will seek safe havens.
Of course, there’s still ways for real estate agents to grow their businesses. The rental market is much more stable than the home sales market and had historically proved reliable in time of economic trouble. Ready to learn up on rental best practices? Continuing your rental education can be pricy and time consuming. Try a few courses from Rental Beast University to enjoy real estate education that works for you on your own time.
4. Rental Concessions Hit Historic Highs
Here at Rental Beast, we have access to over eight million apartments without any listing agent attached, and we diligently track rental inquiries and rental concessions to determine key real estate trends. Since the onset of COVID in March, we’ve seen an astonishing increase in rental concessions.
Rental concessions are compromises landlords make to original rent terms in the hope of filling a vacancy more quickly. Rental concessions can include a monetary compensation, a discount, or an offer of various goods and services. For the 2nd month in a row, Philadelphia led reported cities with the highest level of Rental Concessions, with an increase of 492% YOY. In May, rental concessions remained strong in Atlanta (+63%), Boston (+58%), Miami (+44%), and Chicago (+8%).
It’s important to note, though, that rental concessions may not always stay at these historic highs. Already we’re seeing decreases from rental concessions in April (think the June numbers are amazing? Check out April’s). To capitalize on this trend, real estate agents can let their sphere of influence (especially those on their outreach list whose leases are approaching termination!) know that landlords may be willing to compromise to gain tenants.
5. A V-Shape Recovery Isn’t Guaranteed
As states rolled out their re-opening plans, politicians and economists used the term “V-Shaped recovery” to describe their predictions of post-COVID conditions. Unlike previous economic disruptions like the Great Depression of the 1930s, economists argued that COVID’s impact would be short. It would more closely resemble the brief, painful shock of 9/11 than a systemic downturn caused by underlying issues. Wall Street optimists, like Morgan Stanley, predicted 3.0% GDP growth by the first quarter of 2021. So, is this still happening? Maybe not. While some still stay optimistic about economic growth, states that opened up early like Arizona and Florida are seeing a scary spike in cases. There’s more work to determine why this spike is happening, what can stay open, and how the economy can keep running. Unfortunately, we may not swing out of the COVID downturn so easily.
6. But This Doesn’t Mean That There’s No Good News!
All this sounds pretty scary, but there’s still good news out there. We promise. Virtualization is helping the real estate industry stay running, the rental market still shows signs of life, and real estate agents are still working hard to find their clients a home that works. The home sales market, while slowed, has not shut down completely. In fact, lowering mortgage rates and prices may mean that first time homebuyers can make moves (if, of course, they’re willing to stomach the COVID-related uncertainties). Real estate agents who work with renters can reach out to their clients and ask them if now it the right time to buy.
Want to learn more about how rentals can grow your business? To learn more about the Rental Beast platform or to request a no-obligation demo visit Rental Beast for Real Estate Agents.