Rand Executives Say COVID-19 Will Not Cause a Crash of the Real Estate Markets
John Jordan | May 2020
Executives with Better Homes and Gardens Rand Realty and affiliate Rand Commercial say that business is continuing during the health crisis caused by the Novel Coronavirus and that the social and economic impacts, while severe, will not cause a crash in the residential or commercial real estate markets in the Hudson Valley.
Rand executives appeared on online webinar programs on April 30 and May 1 and discussed the current commercial and residential real estate markets and how they think the markets will react once the downstate economy and the real estate markets are allowed to operate in a more conventional fashion.
On April 30, Matt Rand, CEO of Better Homes and Gardens Rand Realty and Paul Adler, chief strategy officer with Rand Commercial, participated in a “Back to Business” webinar presented by the Hudson Valley Economic Development Corp. During the session moderated by HVEDC Chief Executive Officer Mike Oates, Rand discussed the state of the current residential and commercial markets and his views on how the market will respond once the pandemic’s impacts have been minimized and the economy is fully-restarted.
Rand said that his brokerage firm continues to conduct business and has benefitted from its agents and others in the transaction process employing creative means to shepherd sales transactions in the pipeline during January and February—prior to the state going on “pause” on March 22— to closing.
He noted that the market was really strong in the first quarter and added “We don’t think there is going to be a real estate market crash even with unemployment being at high levels, even with mortgage standards being a little tighter, there is still incredible demand both on the commercial and residential sides.”
Rand and other real estate and banking professionals that participated in the two seminars believe that the Hudson Valley will see many New York City residents, including Millennials, and businesses who will be looking to move to the suburbs as a result of COVID-19.
Rand added that in spite of the restrictions, including the state only allowing virtual showings, deals are being done, in part thanks to attorney and banks being creative, and in some cases, establishing temporary tents outside of their offices to allow closings to take place that can accommodate social distancing requirements.
“We’re expecting a strong market,” Rand said. “It is strong right now. On the residential side, a listing in Westchester that comes on the market today is sold tomorrow, sight unseen.”
Adler said that the “new normal” is now and that the commercial real estate market will have to adapt to the increased use of technology, remote office usage, as well as continued changes in the retail sector.
He said that commercial brokers are already seeing an increased interest from New York City-based companies looking to possibly set up operations in the Northern suburbs and that the region should market its many assets, including its health care network, infrastructure and New York Stewart International Airport.
On May 1, Pattern for Progress hosted a webinar entitled “Housing Update: COVID-19 Impacts on the Real Estate Markets.” Moderated by Joe Czajka of Pattern for Progress and the Center for Housing Solutions, the program featured a panel that included:Matt Rand, Joseph Rand, COO, Better Homes and Gardens Rand Realty; Bill Calderara, president and CEO, Ulster Savings Bank; William O’Keeffe, attorney, O’Keeffe & McCann, LLP; Gregory Langer, president, Valuation Consultants and Darren Scott, upstate director of development, New York State Homes & Community Renewal.
Joseph Rand estimated that closings for the month of April 2020 will be 60% of what the Hudson Valley region registered a year earlier. He added that he expects closings in May will slide to 40% of those finalized in May 2019.
He noted that job and investment portfolio losses will definitely impact buyer demand, but also agreed with other panelists that market activity will by no means fall off a cliff.
“I think the buyer demand will come back,” Joe Rand said. “What we have seen so far is that pricing has held up. Sellers are not selling at a discount to get into contract even now in the midst of the epidemic.”
If the phased reopening in New York State moves forward without much disruption and the economy eventually stabilizes, the housing market will rebound as soon as the industry is allowed to go to work in a more conventional manner.
He concluded that residential sales volume will improve in the third and fourth quarters of this year. “I think the housing market has a decent chance of coming back as long as the economy isn’t completely discombobulated,” Joseph Rand predicted.