The pandemic changed the way business is done in virtually every sector, and that’s especially true for real estate.
Homeowners, and homebuyers alike, adjusted priorities and re-examined just what “home” should look like moving forward. Agents adapted to change the way they market properties and even the methods with which they show homes. Commercial brokers pivoted as the term “remote workers” grew into a probable permanent addition to the lexicon. And fitting for 2020’s long, strange trip, real estate in Arkansas ended up having a pretty good year overall. But the current seller’s market won’t last forever.
Arkansas Money & Politics asked Andrea Alford, executive director of the Arkansas Real Estate Commission, and Tony Moore, AREC board chair and principal broker of Russellville’s Moore and Co., to look back on the challenges posed by the pandemic year and ponder the industry outlook for the rest of 2021 in Arkansas.
The Arkansas Real Estate Commission, established in 1929 by the Arkansas General Assembly, licenses more than 14,000 agents in the state. Alford, a past president of the Arkansas Society of Certified Public Managers, has been with AREC since 2008. In addition to its Russellville headquarters, Moore and Co. has offices in Clarksville, Morrilton, Ozark and Conway. Moore, serving his second term on the board, has received 15 Diamond sales awards for closing more than $7 million in transactions.
AMP: Overall, how did the industry handle the pandemic?
Alford: From our perspective here at the commission, we saw agents and brokers move quickly to adapt and take the steps needed to protect their clients, customers and the public in general. Especially in the early days, we received numerous calls from licensees seeking guidance on how to conduct showings, open houses and closings in a way that was safe for everyone, while also looking out for their clients’ best interests when it came to unforeseen contractual issues.
Moore: Almost 100 percent of real estate professionals are independent contractors, not employees, and in 2020, “independent” was the key word. From one corner of the state to the other, agents continued to do business in resourceful ways amid very evolving environments. Miraculously, many had the best sales year of their careers. No doubt the disruption of 2020 will propel the industry into a whole new normal — the challenge is what in the world will it be?
AMP: Has the pandemic had any impact on the influx of new people into the industry?
Alford: Absolutely. Heading into 2020, we were already seeing a steady increase in license applications, with a five-year average of around 180 new applications per month. Since 2020, that number has risen drastically, with a current average of around 250 new applications per month. While not all those applicants will go on to become fully licensed, we are seeing a significant increase in the percentage of applicants who become fully licensed as compared to two years ago.
An interesting facet of this trend is the volume of applications we processed in the latter half of last year. Applications tend to be higher January through June in conjunction with real estate’s peak season, but the opposite was true in 2020. From July to December, we received nearly twice as many applications as in the preceding six months. So far, the numbers are holding steady in 2021 — in March alone, we processed 401 applications.
Obviously, there are a wide-ranging number of factors at play here, from the pandemic’s effect on employment and working-parent families to the highly competitive housing market as a whole. But overall, I think it’s safe to say much of this increase has been influenced by the pandemic in one way or another.
AMP: Aside from the increase in virtual tours, what are some ways real estate agents have adapted in the pandemic?
Moore: Agents have adapted by working from home. This is something agents have always been good at, but they perfected it in 2020. Agents also adapted by carrying plenty of extra masks in case a client, customer or fellow agent found themselves in need. One of the more substantial ways agents had to adapt was in their level of in-person contact with clients. Instead of driving customers to homes, agents and customers would meet up and drive separately.
In many areas across the state, this separation extended to the closing table, where agents were not allowed to physically attend closing with their clients. This has been a difficult adjustment. It’s important for agents to hand clients the keys to their new house and see the satisfaction on their faces. It just didn’t feel right sitting out in the parking lot and missing that moment.
AMP: What’s the outlook for the rest of 2021 as we prepare (fingers crossed) to fully emerge from COVID-19?
Alford: From a licensing standpoint, I expect to see continued growth in licensee numbers, so long as the market remains strong. From a regulatory standpoint, a highly competitive housing market means the emergence of “creative” selling strategies, some of which can prove risky for consumers. We’re working to find ways of providing consumers and licensees alike with the resources they need to navigate some of these new challenges.
Moore: The outlook remains positive through the second quarter, but by the third quarter, the impact of already drastically low inventories of existing homes for sale, compiled with the sharp decline in new construction due to rising materials costs, will result in weakening sales through the end of the year. Rates surpassing 3.5 percent will also send a cold chill to the fall market.
The post Real Estate Exec Q&A – Pandemic Pivots: Real Estate Professionals Adapt, Anticipate Changes Ahead appeared first on AMP.