“Who would be stupid enough to buy a house based on a temporary situation?” This question was recently asked by Inman Coast to Coast, a public real estate discussion group on Facebook. The answer is, of course, “a lot of people.”
And now that the country is reopening and some companies are calling their employees back to the office, many shoppers, inspired by the pandemic, have changed their minds.
Christopher Paul of Keller Williams Realty in San Diego told the group that his team had lost two deals in recent weeks: one buyer withdrew because his employer “drastically changed” his work-from-home policy, and the other was a salesperson who was told he needed to be in the office more often.
Likewise, Todd Schroth of eXp Realty in Orlando asked the buyer to cancel the contract because his company suddenly wanted to return employees in person. And Maui’s agent Kinga Mills of Hawaii Life canceled the contract shortly before closing because her buyer’s New York employer decided it “wants everyone to go back to the office. I totally screwed up with my client. ”
This shift in thinking is hardly universal; Many agents wrote that they did not notice the recent slowdowns due to employment problems. Via Williams of Keller Williams has yet to see it in her Seattle market. Ditto for Joy Triglia of Better Homes and Gardens in Fort Lauderdale. Mortgage specialist Jeff Chalmers of the Danvers, Massachusetts Mortgage Network also saw no slowdown in funding growth.
While there was no large-scale “return to the office” movement, some companies have explicitly called their employees home. “If you can go to a restaurant in New York, you can come to the office,” Morgan Stanley CEO James Gorman said in June. “If you want to be paid at the rates in New York, you must work in New York.”
Other divisions – Amazon, Nationwide and American Express among others – allow most of their employees to work from home. Still others settled on a hybrid schedule, where people work in the office several days a week, and the rest of the days at home. And some companies are still trying to figure out what to do.
Nearly two-thirds of the total of real estate firms, consultants, building owners, and developers said their teams would be offered a hybrid schedule, according to a poll by the industry publication Commercial Property Executive (for which I occasionally write) last month. But 35% said all of their employees would return to the office full-time.
The Association of Building Owners and Managers found similar results in a survey of tenants in the spring. Nearly 8 out of 10 “decision makers” told BOMA that physical offices are vital to their business. Perhaps this is why the hype in the Detroit metro area is waning, ” suggested Brandon Kekich of RE / MAX Dream Properties.
“People have changed their minds as COVID is drying up here and the big three (carmakers) are making it clear to them that flexibility won’t last forever,” he wrote on the Inman discussion group.
The employment factor was tackled in a recent Fannie Mae poll, in which nearly two-thirds of respondents felt it was a bad time to shop, and over three-quarters said it was a good time to sell. And concerns about job security have intensified, although more people have expressed “greater confidence in their household income and job situation compared to this period last year,” said Fannie Mae chief economist Doug Duncan.
In Northern California, Tim Freeman of Vanguard Properties in Petaluma works with a buyer who was looking for his “forever home” – one where he could live his years. But the client recently changed his mind and is now looking for a weekend in the wine country instead. Why? “Because of the change in attendance related to work,” Freeman said in a panel discussion.
In Southern California, Angelica Kenny of Jason Mitchell Real Estate said she sees “many” canceled deals. “The market is correcting,” she said. “It will happen again.”
Matt Riller of the consulting firm EntreTec said two members of his family recently canceled the deal. One was in Louisiana and the other in Sacramento, but both were associated with dramatic changes in relatives’ ability to work from home, he said.
In Hawaii, Julie Shansrell Ziemelis of MoveToHawaii365.com said: “People here are hoping that people who bought houses (on the islands) during the pandemic, hoping to work from home for the foreseeable future, will be recalled, so we have more inventory! ”
Sometimes, however, changing one person’s views is another’s good fortune. In Dallas, Nicole Arenas of Keller Williams was lucky — or rather her client — lucky when a customer was forced to turn down an offer. The original buyer’s company returned to the office three days a week and was no longer allowed to work remotely. The location was no longer suitable for this buyer, but worked for the Arenas buyer, who signed the contract and closed the deal.
Lew Sichelman has been in real estate for over 50 years. He is a regular contributor to numerous housing magazines and housing and home finance publications. Readers can contact him at firstname.lastname@example.org.