Real Estate Industry Faces A New Reality

The current health crisis and the ensuing economic fallout have shaken every industry, and the East End real estate business is no exception.

As the coronavirus began to spread in the United States, and New Yorkers and others from around the world thought of flocking to quieter settings, there was an initial boom in rental inquiries on the South Fork in the months of March and April, a time when most people would be planning to arrive for Memorial Day or looking at rentals for July and August.

Full- and extended-season rentals had waned in recent years as home-sharing sites like Airbnb pointed visitors to shorter-term stays and the ability to live rent in multiple locations for the same summer season.

But the initial spike in business was followed by orders from the governor of New York to shutter all non-essential offices, including real estate brokerages, whose business largely drives the overall economic engine in most East End communities.

What’s clear to many real estate professionals is they now are in a similar boat as other business owners, managers and employees, with an uncertain future ahead, at least in the short term. What’s true today could be different tomorrow, and businesses will need to adapt quickly and effectively to reach the other side of this crisis.

This week, the Express News Group spoke to a handful of real estate agents, owners and managers about what they’re seeing in their industry. They include Judi Desiderio, owner of Town & Country Real Estate; Robert Nelson, executive managing director of Brown Harris Stevens of the Hamptons; Dana Trotter, an associate broker and senior global advisor with Sotheby’s International Realty; and James Petrie, a licenses salesperson with Compass in the Hamptons.

These are challenging times for all businesses, and real estate agents are no longer showing properties in person. How has your firm adapted in the early going? What is the plan for the next few weeks and how does that compare to business as usual?

Robert Nelson: Business as usual has completely changed. We cannot do any showings and must remain at home to work. We as a company have prepared for this with virtual showings, virtual meetings. Our staff is working from their homes with office lines installed, and they are pretty much able to do everything the agent and customer wants.

Judi Desiderio: Much of the real estate sales and leasing business has been web-based for some time now. We are conducting virtual showings with potential customers. The total impact is yet to be seen.

Dana Trotter: We’re monitoring the situation and adapting. Even in these trying circumstances, it is uplifting to see Sotheby’s International Realty evolving and developing in new ways to utilize technology to continue to push Sotheby’s International Realty brokers forward in an ever-changing landscape. We will continue to work and support our clients while social distancing, so please take this time to reach out and connect if there is anything we can do to help.

James Petrie: We are all doing our part and listening to the CDC. Compass is uniquely well positioned to support agents in this new remote reality — and I’ve been able to do much of the work I need to get done from home. I have been conducting showing requests, only for vacant properties, via Facetime.

There was a significant influx of visitors and second homeowners from New York City over the last two weeks. Did your firm see an increase in demand? Can you be specific about what sort of requests you were seeing? Were they short-term or long-term? How has this dynamic changed the rental outlook for the summer season?

JD: Our rentals have spiked. Immediate occupancy and the house must be ready for conducting business. Most are just spring, some full-season and others full-year. We are back to writing full and extended season leases

RN: We were overrun with requests for immediate rentals. We did a lot of them. Quite a few are for two months, but there are some year-round or through Labor Day.

JP: Rental showings have been up dramatically. People are looking for April and May so that they can have more space and fresh air while this plays out. I think everyone who has a second home in the Hamptons and lives in New York City is currently out here or going back-and-forth. The requests for rental properties have been constant. People are looking for immediate occupancy for the short term and through Labor Day.

DT: I’ve currently been very busy, and there has certainly been an uptick in demand for March and April rentals, some of which extend through Labor Day.

We’ve seen and heard from some agents doing virtual tours of homes. Obviously, technology has improved tremendously over the last 10 years. Has this always been an important part of the sales pitch, or are in-person showings always preferable?

JD: Virtual tours have been a marketing tool for quite some time now. Today, we can virtually take the customers through the house and focus on what they want to see. But in-person showings are always preferable.

DT: I’ve rented homes sight unseen to customers out of state or abroad, and that usually involves a Facetime tour or a series of walkthrough videos. In person showings are always preferable, but digital showings have been a helpful tool for the last five-plus years.

RN: Yes, in person is always best, but for now, we have no options except virtual. This might change how we conduct business when things return to normal. There will probably be more virtual showings as agents and customers get accustomed.

JP: Tech tools such as real-time, interactive virtual showings and 3D staging are crucial now. People still need to buy and sell homes. We’ve been able to continue personal relationships with all of our clients through video and Facetime, while showing them homes in a creative way.

Obviously, with many businesses forced to close for the next couple weeks, commercial properties are also going to be impacted by the pandemic. What are you seeing in the commercial real estate market?

RN: They will be impacted as everything has been impacted. The business is not open, so there is no money coming in, which can impact the rent to the landlord. It’s going to be a difficult time for everyone.

JP: We have a few deals going, but none are ready for the closing table. I’ll have to cross the bridge when we get to it.

JD: Some savvy customers are looking at this as a time of opportunity.

In terms of closing sales, what are the challenges you are facing in this environment?

JD: Closings are happening virtually or by mail.

RN: Attorneys are going to have to figure out how to go virtual for closings. In other states like California, the closing has always happened without anyone present. So those same banks’ lending and title companies already close remotely in other states. New York will just have to ask and learn from other areas on how to get this done.

JP: I think the biggest challenge we’re facing is trying to speculate what will happen. Buyers, sellers and renters are all trying to position themselves properly for when the virus calms down. It may be a slow spring for many sellers, but we are optimistic that the market will rebound and we will be in a strong position when it does.

DT: We’re more connected than ever before so we’re able to hold virtual closings and we will do so for any deals in progress.

I imagine there will be a slowdown in terms of actual closings, or is that not true? Are these being done virtually as well?

JD: For the next two weeks, I would have to agree. After that, we hopefully will be on the other side of this, and when the dust settles, New Yorkers will be even more interested in owning their own piece of East End dirt.