Iowa’s real estate industry finds new ways to serve clients.
For an industry founded on personal relationships, functioning in a predominantly virtual environment can be challenging. When that business is home sales, it might seem impossible.
But Iowa’s real estate agencies and associations quickly adapted to the restrictions recommended in response to COVID-19 and remained open for business with barely a blip in day-to-day activity.
On the following pages, you’ll hear from several industry professionals about how they’ve adjusted to doing business in a social-distancing culture while maintaining that emphasis on relationships—and what these changes could mean for the long-term future of the industry.
President & CEO | Coldwell Banker Mid-America Group
“Our number one priority when the coronavirus hit was the safety of our agents and employees,” says Marne Sirfus, President and CEO of Coldwell Banker Mid-America.
“We have five offices in the metro, and enabling our employees to work from home meant making sure all the tools were in place for them to be able to do their jobs.”
In addition to providing the necessary sales tools, Coldwell Banker also adapted its education platform so agents could continue their training despite the quarantine. The company provided a great deal of education for its agents on how to do business virtually and how to manage showings to ensure appropriate precautious were being taken.
“As far as our marketing, we’ve shifted the emphasis and are really letting clients drive that, whether that means virtual open houses and tours or simply providing the necessary safety precautions, like masks and sanitizer,” Sirfus says.
Activity has continued throughout the quarantine, according to Sirfus, although listings and sales are both down. “Making projections for the year is really difficult right now since we’re truly in an unknown situation,” she says. “Interest rates are low, inventory is low, home values are still appreciating, and historically the real estate market has not been closely related to the unemployment rate. But none of those factors are clear indicators of how buyers and sellers will respond to a pandemic.”
Sirfus was not leading Coldwell Banker during the 2008 downturn, but she says after 30 years in business, the company has survived numerous ups and downs in the market, and she is confident in their ability to respond to the current situation. “No one has ever experienced a crisis like this before, so we chose to pause briefly at the outset to outline appropriate safety measures. We’re doing the same things—meeting with clients, showing homes, listing homes, but we’re doing more of it virtually, and we wanted our agents to be prepared for that.”
Those changes allowed the company to continue working throughout the quarantine. But the virtual approach is not something Sirfus sees Coldwell Banker Mid-America implementing as the predominant business model. “We value our office culture, and we’ve really missed that during these past months,” she says. “This tends to be a relationship-based business, and we crave that human interaction. The personal touch is important, not just for our agents but for our clients as well.”
President | Des Moines Area Association of REALTORS®
AAs President of DMAAR, Lance Hanson says the association’s primary goal through the coronavirus situation has been to offer an open-door and open-ear relationship with members and to provide the most accurate, timely information possible.
“As a trade association, we don’t want or have the power to mandate how our members do their jobs,” he says. “But we want to make sure they have as much information and as many ideas as available so they can be safe and work effectively.”
One of the ways the association adjusted its practices was in relation to virtual activity. Because real estate is a relationship-based business, DMAAR has always emphasized in-person over virtual options.
“We’ve changed some of those guidelines in order to provide our members the freedom and control to adapt to what their clients are comfortable with,” Hanson explains.
Every crisis brings some positive change, it seems. Hanson says the same was true of the 2008 downturn.
“That was a man-made problem, really, that took down a whole industry. This isn’t. The only similarity is the slight overreaction from lenders. Everything shut down in 2008 when they stopped lending; with this, lenders tightened up guidelines for a while to see how the market would react.”
As businesses return to more-normal practices, Hanson expects some changes to remain in place. The quarantine situation has required agents to undergo something of a learning process to understand both the technology and the expectations of the buyer.
“If the technology enables homeowners to ‘see’ 15 houses but only physically tour the four that really meet their needs, that’s a plus for everyone,” he says.
The other positive result Hanson has seen is how his industry has responded to the crisis.
“Everyone has really demonstrated amazing flexibility through this. The ability to adapt has been mind-boggling. As an industry, we were poised to make changes we’d been contemplating for years, and everyone just stepped up and made that happen.”
The industry had already made progressive changes with the closing process and is still adapting to that, but Hanson says that’s what makes the industry so great.
“There’s a reason our REALTOR® tag line is ‘That’s who we (R).’ Changing to meet the needs of our clients is how we’ve always worked.”
President | Iowa Association of REALTORS®
Although state restrictions on businesses have affected how REALTORS® are doing business these days, those limitations don’t seem to have hampered home sales.
“Des Moines is actually at about the same level as we were this time last year,” says Scott Wendl, President of the Iowa Association of REALTORS®. “There was a slight slump at the end of March, when the quarantine first took effect, but new construction didn’t really slow down. The busy spring sales season may be two months behind, but the market’s been strong.”
Wendl says the state association provides guidelines for members so they can stay up-to-date on the latest government regulations and continue serving their clients, implementing the association’s recommendations for best practices. For example, most REALTORS® are providing hand sanitizer and masks to clients when they show homes.
Existing tech tools such as online home searches and virtual tours had already laid the groundwork for REALTORS® to adapt quickly to quarantine restrictions.
“Closings have been more challenging,” he says, “and we may face a bit of a backlog when offices open up more, but compared to the downturn in 2008, this situation is totally different.” That was a financial crisis at heart, Wendl says, which resulted in a dramatic slowdown of financing, home sales, and construction.
“This situation is different,” he explains. “As soon as it became clear that states were going to start shutting down nonessential businesses, our association leaders reached out to the governor’s office to make sure decision makers understood the necessity of the housing industry.”
With real estate-related transactions representing nearly 25% of gross domestic product, a shutdown would have far-reaching effects. Fortunately, Iowa’s leaders recognized this.
Wendl also anticipates that new construction in the Des Moines area may be nearly two months behind schedule as the year progresses, but he predicts a strong market for home sales.
“People have been doing long-neglected home improvement projects. For some homeowners, this may mean they’re finally in a position to list their homes. For others, they may have been stuck at home for the past two months realizing they don’t want to live in that house any longer. We may actually have a shortage of homes available in Des Moines as a result of the quarantine.”
CEO | Iowa Realty
For the agents at Iowa Realty, tech initiatives that had already begun were accelerated as a result of quarantine restrictions.
“While working in a remote environment, we needed to remain efficient and productive,” says Kim Bakey, CEO. “We quickly supported our agents through innovative efforts such as online offers, curbside closings, live virtual tours, and other paperless processes.”
To support buyers and sellers, Iowa Realty offered Facebook Live tours of homes, with a host virtually walking viewers through the home and highlighting features for the audience. “Our agent engagement actually increased. They were excited to showcase homes in a new and safe way,” Bakey says. “Many of our virtual options are best practices and will remain in place for the long term.”
Despite listings and inventory being down over the same period last year, according to Bakey, Iowa Realty has agents experiencing some of their best sales numbers in years.
“In general, sellers are cautious,” she explains. “That’s why we’re doing everything possible to provide the comfort they need during showings and open houses. With numerous safety practices in place, we anticipate the resale market will grow as everyone adjusts to the new normal.”
Bakey also says the refinance market is very strong right now, which typically indicates that homeowners plan to stay in their homes. This could be an indication that resale inventory will remain low for some time.
“One of the most challenging aspects of this entire situation has been predicting the market. The pandemic has impacted almost everyone in some way,” she says. “With that in mind, right now it’s very difficult to predict people’s thoughts or actions. This is especially true when it comes to their financial decisions.”
The leadership at Iowa Realty has been watching market activity and adapting day-to-day operations by regularly studying trends, assessing data, and comparing vital information. “For instance, as apartment occupancy rises, that usually bodes well for the entry-level market. When interest rates are historically low, that also is a good sign,” she says. But none of those indicators are guarantees.
“There’s a quote by Vi Greene that really sums up the situation well: ‘Life’s not about waiting for the storm to pass; it’s about learning to dance in the rain.’ That’s all we can do right now,” Bakey says. “And our industry is adapting well.”
Principal Broker | RE/MAX Precision
RE/MAX Precision Principal Broker Stephanie VanDerKamp says some of the adaptations as a result of the coronavirus may turn out to have a positive effect on the industry.
“In a people-oriented business like ours, we’ve sometimes been hesitant to focus too heavily on the technology aspects. This has forced us to get comfortable with the technology and to find ways to make virtual tools serve our clients,” she says.
Because VanDerKamp’s brokerage adopted a social distancing practice early in the quarantine period and opted to have staff work from home, other adjustments had to be made as well.
“A lot of our forms and systems were already online,” she says. “So that aspect was a pretty seamless transition for everyone. But with fewer people in the office, we had to find new ways to communicate, to conduct showings, and to provide open houses. As soon as it was available, we also implemented the e-notary option to help clients in signing their closing documents.”
Despite some slowdowns in normal activity for this time of year, VanDerKamp says the real estate business in central Iowa has generally continued as expected. “It helps that the economy was already so strong,” she adds. “We had the wind behind us when this hit, and while there was a brief lull as people responded to the uncertainty, the numbers indicate that we’re in line with sales and activity from last year.”
Hopeful reports from economists and steady activity in resales and new construction give VanDerKamp an optimistic view of the real estate market as a whole, despite the effects of the virus. “I do anticipate that many of the adjustments we’ve made as an industry will continue,” she says. “There will be more online video conferencing and virtual walk-throughs, which benefits buyers and sellers. It reduces the number of people walking through the seller’s home, and it will help the buyer narrow down the product selection process.”
As the quarantine restrictions are gradually lifted, VanDerKamp expects the resale inventory and market should rise as well.
“We are really seeing the market open up now as everyone is growing more comfortable with the available precautions. Whether it is providing masks and sanitizing and making other adjustments to ensure our clients are comfortable, we will continue to do what agents have always done, which is meet the needs of our clients.”
Broker | VIA Group REALTORS®
In a strange way, VIA Group has been preparing for this quarantine situation for the past several years, according to owner Ken Clark.
“We’ve been operating as a virtual company since we began,” he says, “so we had to make very little adjustment to continue doing business throughout this time.”
Changes that were novel for some real estate companies such as virtual meetings, paperless transactions, and virtual showings have been common practice for VIA Group REALTORS® from the beginning.
When his agents do show houses now, the company has adopted additional protocols to address COVID-19 concerns and precautions.
Clark says VIA provides gloves and masks for agents and discusses options with all their clients to ensure that any showings are adapted to the homeowner’s comfort level regarding exposure.
Despite the strange circumstances and the uncertainty regarding both the virus and its effect on the economy, Clark believes the real estate market will remain strong.
“There was the farm crisis in the 1980s, the recession in 2008. The real estate community has adapted every time, and we’ll adapt to this situation, too.”
Although many expected home sales to be down because of the health crisis, first quarter sales were actually the highest they’ve been for that period since 2016.
“I’m a little pessimistic about third and fourth quarters, at least until we see what happens with the unemployment rate. That is one of the biggest obstacles to a strong real estate market,” Clark says.
Clark does anticipate some long-term effects on the real estate business as a result of the coronavirus. He says a more technology-oriented approach to marketing will continue, both for safety reasons and for convenience.
He also expects a change in home design. “Commercial and residential construction are both going to see changes. Employers are realizing that they can accomplish the same thing with less brick and mortar presence, and employees are learning that they can function well at home,” he explains.
This means in the next few years more new homes may be designed with dedicated office spaces to serve that market. “People have spent a lot of time at home these past few months. They’ve had time to decide what they like and what they don’t,” says Clark.