2020 took some existing residential real estate trends and threw gasoline on them. This year, will we go back to the status quo or enter a new normal? Take a look at these trends, and decide.
It’s tempting to make sweeping predictions at the beginning of each new year. But as 2020 has shown us, the world can throw so many curveballs at you that predictions can be about as useful as resolutions.
In that spirit, instead of trying to forecast the future, I want to talk about the top five real estate trends that were accelerated by the pandemic over the past year — and ask you to consider whether you think they’ll fade or flourish in 2021.
1. The increasing emotional value of ‘home’
It’s easy to get lost in the real estate weeds — to the point where you can forget the full meaning of what you’re selling. We can speculate on whether interest rates will go up and when inventories will loosen, but it’s important to see the bigger picture.
The pandemic has shined a bright spotlight on housing in general. Residential real estate has become both more functional and more emotional. Consumers aren’t just searching for a house; they’re seeking “home.”
While the pandemic has confined us to our homes to the point where we’ll do anything for a change of scenery, it has also pointed out how many things a home can be for us.
Home is shelter. Home is safety. Home is family. Home is school, the gym, the movie theater, the best local restaurant. Consumers appreciate “home” more than ever, and they have a more three-dimensional view of what they want their homes to be.
2. The rise of the convenience consumer
Guaranteed offer programs are growing throughout the country. Some companies see them as tools for flipping, others for lead generation. But the popularity of these programs reveals a growing trend that’s far more important: Consumers are hungering for greater convenience in buying and selling homes.
We were already living in an Amazon Prime world. 2020 and the pandemic took it to the next level. Consumers now expect a process that gives them more control over the homebuying and selling experience, where they don’t have to jump through hoops and can have more flexibility when it comes to open houses, closing dates and other parts of the process.
3. Saved search syndrome
Stay-at-home orders created a lot of downtime, resulting in a huge surge in people creating saved searches for desirable homes. With inventories so tight, buyers grew incredibly frustrated because by the time they found a house they liked, it was already sold.
Consumers are now getting increasingly wise to saved search syndrome and the fact that everybody is seeing the same listings and competing for the same properties.
As a result, there’s a greater demand for exclusive access to “off market” properties. If you can give buyers a backstage pass today, you can win their loyalty for life.
4. Agents valuing culture over commissions
I wrote about this in a previous article, and it’s worth reinforcing: In 2020, I heard more stories than ever about agents leaving their large brokerages to join small team environments, with the promise of a greater sense of connection with colleagues and customers.
This fits with the similar trend of millennials caring more about how their company engages with the community than the profits they rake in. Agents were already reassessing their priorities. The pandemic has accelerated that, and it’ll be interesting to see if the trend continues.
5. The team takeover
General Motors famously invented and then killed the electric car back in the 1990s. It’s a pattern that has played out across different industries for decades: A company creates a new division or product as a “pilot program,” and then that program shows such early promise that it threatens the company’s core business. As a result, it has to be spun off, closed or sold.
I built my own successful team at a large brokerage before launching Kris Lindahl Real Estate, and I saw that pattern repeat itself across the country throughout 2020.
The team structure is so much better at meeting consumer needs and providing a better lifestyle for agents that it’s now threatening the traditional model of solo agents trying to juggle 15 different tasks at big brokerages. Will the major players adopt even more team structures, or will they be seen as threats to their core business? We’ll find out in 2021.
Bottom line: 2020 took some existing residential real estate trends and threw gasoline on them. Like so many other elements of our lives that have changed during the pandemic, it’ll be interesting to see if we go back to the status quo or have indeed entered a “new normal.” Personally, I think all five of these trends are positive, and I hope they’re here to stay.
Kris Lindahl is the founder and CEO of Kris Lindahl Real Estate, the #1 team-owned independent real estate brokerage in Minnesota and Wisconsin, and #12 nationwide.