The lockdown diaries, day #3: Changing habits
I’m wondering how the impact of a lockdown will change consumer habits around the world?
If you can’t get a newspaper, you will seek news online. If you can’t go to the cinemas you will stick to Netflix. If you can’t work at the office, you will work from home. If you can’t attend a meeting, you will conduct a video call.
If you can’t view a property, you will check out a virtual tour.
It‘s a shock to the system. What is the long term impact of this social isolation and will it form new habits with consumers?
Real estate is a very extrovert-heavy, network driven industry where face-time is critical in doing business. I’m wondering if the next generation of buyers and sellers will warm up to doing things in a more virtual way.
Will we see a change in attitude? Is this the defining moment when we will switch from our mostly analogue real estate world to a digital one? Will we see an exponential rise in tech-first real estate companies?
As I mentioned in yesterday’s blog post, the most valuable piece of real estate in the world right now is the square space on the consumers’ mobile phone. Right now, everyone is sitting at home, and their little window to the world, is through their phone. What are you doing to connect with them?
Will people get comfortable with this new way of doing things, and forgo the old habits or will things gradually return to normal?
Reduction in agent numbers
Make no mistake, the events we are experiencing right now will put a strain on estate agencies and is likely to reduce agent numbers. In the USA there are over 1 million registered real estate agents but just over 5 million transactions per year with the top 100,000 brokers doing more than half of the transactions. In South Africa there is a higher barrier to entry with about 40,000 estate agents.
We may see a fast track to super agents and team with less focus on brands and more dependency on platforms that covers the whole spectrum of the real estate transaction. We know that brick-and-mortar will be replaced by online models and the current events may just add more fuel to the fire.
Productivity in a virtual world
I’m wondering how agents will use their time for the next 3 weeks in lockdown mode? I haven’t seen any plans put in place by real estate companies, other than offering their agents an opportunity to attend online training courses to sharpen up skills. No one was prepared for this.
The last few days has been a disruption and agents had to settle into their new virtual worlds. Everyone assumes the lockdown will end in 3 weeks and there will be no relapse to disrupt business again, but no one can guarantee this. It does however sound that a lot of progress has been made to find a cure, so let’s hold thumbs.
Portals under pressure
The lockdown will put immediate pressure on any business that derives its main income from advertising….companies are retracting on advertising to absorb the impact. Think news sites, think property portals.
Although some portals are providing discounts for April, I’m wondering if this will be enough and if their high prices are sustainable under the current conditions. Agents will be cash strapped for the short to medium term unless we see a boom in home sales 4 weeks from now, which is highly unlikely. There may just be a shift in agency spend which will affect the top portals.
My Sunday morning was spent cutting some trails around the home for running/cycling (as I don’t have immediate neighbours).
We had a little bit of rain in Knysna yesterday so the clay ground was a little bit softer than usual.
The circular loop has one or two very steep ascents and when we tested it, I failed getting up the slope (albeit to my excuse it was in denim jeans!).
Still 3 weeks ahead, so I guess plenty of time to level it a bit or find a way to give more traction to the wheels….
The real heroes
As a final thought, let’s not forget the real superheroes in this epidemic…