May 22, 2020
By Paul Bubny
Real estate, it is often said, is local. However, that’s especially true when it comes to navigating through unprecedented circumstances, such as the sudden halt to the economy brought on by measures necessary to contain the spread of COVID-19.
“Being able to look at the data is super-important for everybody, no matter where you are in the ecosystem,” said RealMassive CEO Mike Clark during a webinar his company presented Wednesday, focusing on the importance of data in steering through the recovery. “Everything is down to local and regional.
“The industry’s been really good over time about having broad historical and macro analytics,” Clark continued. In the current environment, though, “people are looking for more local information and more real-time information so they can really see what’s happening week to week, as opposed to one quarter to the next.”
That being the case, much of what Clark and his fellow panelists had to say hinged on how local conditions, and local perceptions, will shape the speed of the recovery for a given region. Clark is based in Austin, the capital of a state that was among the first to begin reopening. Jay Olshonsky, CEO of NAI Global, lives in New York City, which has been the epicenter of the pandemic and of government actions to contain it. Richard Green, Lusk Chair in Real Estate at the USC Lusk Center for Real Estate, and moderator Daniel Ceniceros, CEO of Connect Commercial Real Estate, both reside in California, where the number of cases per 100,000 residents is less than one-eighth that of New York.
“We’re watching from New York and hoping that Georgia opens up and does just fine, and that the next week there’s not a huge increase,” said Olshonsky. In the New York market and elsewhere, he noted, while deals that were in the pipeline in March or April have since been completed, many more-recent transactions have been paused.
“We’re entering into that dreadful no-activity zone,” Olshonsky said. “In the brokerage world, it’s really a question of how long that will continue.”
Green expressed confidence that New York City would rebound, as it has on numerous occasions through the centuries. Yet, he pointed to New York and other states—including New Jersey, Michigan, Louisiana and Illinois—as areas where the incidence of COVID-related fatalities has pushed the weekly death rate above the five-year average for those regions.
In those states, “There’s going to be good reason for caution for a while.” Conversely, Green said, “a place like Austin, where the impact appears to be minimal and it has so much going for it anyway, I would expect to return to normal much more quickly.”
Even in Austin, though, there’s hesitancy. “It all starts with us: when do we feel comfortable going to a restaurant, whether it’s open or not, when are we comfortable getting on a plane,” said Clark.
He acknowledged that although he recently drove past a gym that he would normally frequent, “I actually don’t want to go into the gym,” even though it’s now open.
“We need more time for people to embrace the openness,” said Clark. “Any way we can track people getting back to their normal lives will lead to a more normal real estate market.”
Pictured, clockwise from top left: Mike Clark, Richard Green, Jay Olshonsky, Daniel Ceniceros.
For comments, questions or concerns, please contact Paul Bubny