The Inman community will meet virtually to Connect, June 15-17. It’s a powerful line of speakers, and our focus is on the New Normal – what business looks like on the other side of the pandemic. Let this conversation with one of our June Connect speakers serve as an appetizer and don’t forget to grab your ticket to June Inman Connect before prices go up.
Over the past year, the coronavirus pandemic has revolutionized the real estate industry in many ways. From self-service closings to historically low mortgage rates and fast-paced movements from cities to suburbs, realtors and leaders have reached out to unimaginable levels just to help buyers and sellers achieve their goals.
As the vaccine rollout continues and cities reopen, everyone’s attention is figuring out what pandemic-induced changes will fade or continue.
For Realogy CEO Ryan Schneider, the adoption of hybrid workspaces and transaction experiences is the key to success now and in the future, as the nation prepares for more economic, generational and public health changes.
What do you think is ‘the new normal’ for the real estate sector? There have been so many changes during the pandemic, but which ones are set to stay?
The new normal begins with the durability of the consumer changes that are happening. The new normal will include people who work differently. and it will include people who live in different places. For example, we are seeing people move to some of the attractive fiscal and climate destinations, like texas and florida.
All of that adds up to be probably positive for housing, as it generates a greater demand for housing than we have had in the past. For Realogy, as a leader in the residential real estate market, we benefit substantially from that.
For us, our tendency to drive the growth of our business, use technology well and generate excellent financial results. [has been great for] our bottom line and market share gain. I believe that Realogy is in a powerful position to benefit from these new [consumer trends].
Migration trends have been a big topic at Inman. How can brokerages help their agents deal with this major shakeup and train them to serve clients moving to other cities or states?
First, I want to say that the agents that I think are amazing and have really proven their worth both during the COVID recession and afterwards with how flexible and powerful they have been helping clients. do business safely both in your local markets and beyond.
Second, one of the most powerful things in dealing with the consumer shifts you’re talking about is the power of running a large-scale business and having great brands, like we have it at Realogy. What we are increasingly finding is that the power that agents can bring to clients, especially if they leave one market and head to another, comes from our network.
Our Agent-to-agent referrals across geographies has really gone up. The ability of any single agent to cover the entire country will be very limited. But if you’re part of something, be it Sotheby’s International Realty, Coldwell Banker, or ERA, where there are referral opportunities for agents and brokers between those networks, that’s the way you can better cover the country.
I would like to focus on remote work. The shift to telecommuting has inspired shoppers to return to their hometowns or other more affordable markets. However, according to some news reports that I have read, some employers are changing their thoughts on a remote workforce. How could that affect the migration trends we’ve seen over the past year?
Well, let me start with the 10,000 Realogy employees. We have thousands of our employees who during the pandemic have been in the offices or in the field because that is what you would have to do to support agents, brokerage partners, franchisees and clients, right? That commitment to serving customers and agents is not going to change for our company.
What has changed for our company, which you alluded to, is what is happening beyond things for the client and the agent. We have found some back office jobs that can be permanent jobs from home and have turned them into permanent jobs from home. [positions] because productivity is equal to or higher [than being in the office]. Employees like it more and their life is better with less commuting, and it is a good decision for us from the point of view of real estate cost and other points of view.
The other move we made and this impacts a couple thousand employees [at HQ], it is a movement towards a hybrid world. Instead of having three floors of cubicles, we will have a technology and brand showcase floor, and we will have many collaborative spaces. I won’t even have an office.
Instead of a thousand people a day going to work in that building, we think there will be 250 people a day going to a building to collaborate, and it will be 250 different every day. There will also be technology partners, agents, franchisees, and others with whom we do business. We are fully committed to being where our agents and clients are in the field when that’s the right thing to do, [and] We will be fully committed to a full time work from home when it is the right thing to do.
So the anchor of how we run the business will be a hybrid approach that really leans towards ‘let’s stand together for collaboration and give people more flexibility for the rest of their lives’.
One of my colleagues, Lillian, In fact, he wrote about the real estate office of the future. and how can it not be an office at all. What are some questions that leaders of other brokerages, whether franchise or independent, should ponder as they figure out how to best utilize their space?
I believe that each company will make different decisions because the situation that is right for them is different than the one that is right for us. For us, having our managers and our marketing people, and our administrative support available to directly help our agents, for those agents who want to do it in person, should absolutely be part of our future.
And we are in hundreds of locations, with our agents, offices and our franchisees, and we will do things a little differently, depending on geography as circumstances dictate. However, at the end of the day, I think we can be a good role model for how the industry evolves.
Beyond workplace trends, what other factors have you been paying attention to? There has been a lot of talk about millennials aging into homeowners and baby boomers beginning the process of moving away from homeownership to other living arrangements.
The millennial population is entering its best years of home buying. They have lagged behind in my generation and a few other generations, but the share of millennial homebuyers in the last 12 months has accelerated. So we think there is a positive demographic for housing that is here to stay and we are very excited about that.
The other thing that is driving demand right now, which may be more temporary, is that interest rates are at record lows. You can get a 30-year mortgage on Realogy for less than 3 percent and that’s just unbelievable. That is helping people drive demand and cope with some of the price inflation that is happening in the market right now.
Frankly, that won’t last forever. But it is a big part of the demand right now.
Looking ahead, what needs to happen to help consumers have a better home buying experience? Of course, there is the problem of skyrocketing home prices, and then there is the continuing quest to make the actual transaction easier to navigate.
What is really strong at the moment is demand and it is outpacing supply.and that is why the inventory is low. But we are selling more houses and we are doing more listings than last year, which was a strange year. We are even outperforming 2019. There is more supply on the market than in the past, and you can see that only in terms of actual transactions. But the demand has increased so much that they are moving faster.
We’re hopeful that as COVID-19 recedes a bit with vaccines and other things, some people who are hesitant to put their home on the market during COVID may be more willing to bring their home back on the market. . That will help.
The other thing is simplify the transaction experience for the customerand we are very excited about what we have been able to do about it, including through COVID. We not only help clients buy and sell houses, we have a mortgage business and a title business. Also, the adoption of some of the digital technologies that we built in 2018 and 2019. [has improved] We literally have 15x adoption growth in the use of our digital virtual securities closing process product, a 4x growth in our virtual mortgage closing products.
We believe that we are actually leading the way in creating that more integrated and simplified experience. And in our case, it shows up in finance, we had over $ 200 million in equity and mortgage earnings, which was a record for us in 2020. We really like the way we’re trying to simplify it for the client, both for that they have a better experience and that we capture more economy.
Email Marian McPherson