By Ian Slater | April 10th, 2020
In times of uncertainty and nervousness, there is something I’ve witnessed and also something I certainly foresee on the tail end of the coronavirus crisis: a rush to quality.
I mean this in a couple of different ways. But obviously, all from a real estate perspective!
The first rush to quality will be seen in transactional behavior. In a very strong market, replete with consumer confidence, climbing prices, and a supply squeeze, I have witnessed buyers basically be willing to pay more for less. Maybe, they will ignore certain flaws an apartment or house has because they want to be in a certain location. Or maybe, they will buy in what they used to deem an “off quality neighborhood” because they can’t afford a more quality neighborhood—or, they believe that the market will eventually stretch out to that neighborhood.
In a lower market or a time of nervousness, I think that there will be winners and losers—of listings, developments, neighborhoods. Buyers will pay much stricter attention to corner-cutting in development, they will want to buy on prime streets that they deem “too quality to fail,” and they will purchase in buildings or through developers with concrete and established reputations. All of us in the industry should be careful to adhere to this demand for quality.
The second rush will be in the servicepeople buyers, sellers and renters use in a transaction. In a time of volatility and uncertainty, all of those involved in a real estate transaction must be deemed highly trusted advisors. Brokers, attorneys, bankers, inspectors, designers—buyers and sellers are not going to be as willing to take a risk on them anymore (think “working with a friend”), and there will be a rush to quality of service. Those who provide the highest quality of information, data, guidance, and lack of pressure will be rewarded, whereas those who do not will be deemed “of low quality” and likely will struggle.
This is, in the short term, likely painful for many—many listings, buildings, brokers, developers—but in the long term, a great thing for the industry. It pushes the bar higher!