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An industry transformed: From 3-D walk-throughs to Zoom consultations, Boulder County’s residential real estate agents adapt to COVID-19 restrictions

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A normal day before the COVID-19 outbreak in Colorado for Realtor Jennifer Fly consisted of driving homebuyers to 20 or more houses in her car. The pandemic leaves no room for carpooling, just one of many of the normal practices now axed from the residential real estate industry’s toolbox.

Fly serves as vice president for Colorado Landmark Realtors, a firm with offices in downtown Louisville, Niwot and Boulder. She said that Landmark immediately moved showings online when the pandemic began, working with photographers to capture properties in images and videos to create 3D virtual tours.

Soon after, Gov. Jared Polis issued a shelter-in-place mandate on March 26, shutting down non-essential services and limiting in-person business. The public health order was effective until April 27, but several counties — including Adams, Arapahoe, Boulder, Denver, El Paso, Jefferson and Pitkin — extended the order into early May. During this period, in-person showings and open houses ceased, and many homeowners yanked their listings from the market.

The state’s safer-at-home order has since replaced the stricter stay-at-home order. Real estate agents can now host physical showings, but the selling process has been vastly changed. Groups are limited to 10 or fewer individuals, and open houses or complimentary snacks and beverages are not permitted.

The coronavirus pushed many in-person or public interactions — college lectures, music performances and buying a family home — to online formats. Landmark uses Zoom for seller consultations and in notarization of official sales documents. House closures are conducted with either the sellers and buyers in separate rooms or in their respective cars. The firm used to suggest that sellers bake cookies and mingle with visitors during open houses. With open houses still restricted, Landmark used Facebook Live to show off properties.

“I look forward to the day when we can have open houses again,” Fly said. “It’s a wonderful way to showcase the property and meet new clients. I hope that that will come back. But I do think that buyers will probably do a little bit more of their due diligence on their own, as far as really researching the properties ahead of time.”

Fly said that clients visit about half as many houses as they might have before the pandemic, but noted that’s not a bad thing. By using Landmark’s online tools, homebuyers narrow down the search to only serious considerations.

Those couple of months of limitations haven’t been enough to keep the Front Range housing market down. Data from the Colorado Association of Realtors, which tracks monthly market trends throughout the state, shows that in April, active listings dipped 14.6% compared with April 2019. In early May, listings rose by 56% from the April drop, according to the association. Houses under contract spiked 114%.

“There was clearly a pent-up demand for the spring market for buyers who were waiting to buy and were not able to look at homes for those, say, four to six weeks,” said CAR media spokeswoman Kelly Moye. “And as soon as things opened up again, they went out and bought.”

In May, the average days for a Boulder County listing to stay on the market before a sale was 43 days. That’s comparable to the same time last year, at 40 days for 2019.

Moye, who’s also a broker with her team selling in Broomfield and Boulder counties for the Re/Max Mountain States Region, said that though houses under contract are on the upswing, consumer trends have changed since before the coronavirus.

Resort locations such as Summit and Eagle counties are recovering more slowly, she said, perhaps an indication that buyers of vacation homes and second homes are not yet back into the market.

Affordability remains a primary factor in consumer decisions with buyers planting their roots in areas where they find value, she said. The most popular single-family properties fall under $500,000 and the lowest demand is for houses priced higher than $800,000.

The bounce back isn’t equal across the board for Boulder County. The city of Boulder’s average single family home resale price is $949,000, according to Moye, putting several listings out of some households’ price range.

“It’s not that those homes aren’t selling. They’re just not selling as quickly, and the showings haven’t picked up quite as quickly as they have in more affordable neighbors like Erie, Lafayette, Louisville and Broomfield where you can get a house for under $500,000,” she said.

The Realtor association’s research attributes the demand for lower price tags to first-time buyers taking advantage of lower interest rates. According to data from the Federal Reserve Board of St. Louis, as of May 28 the average interest rate for a 30-year fixed rate loan in the U.S. is 3.15%. There have been fluctuations over the past 20 years, but it follows a trend of mostly declining interest rates since 2000, when interest rates in the last week of May averaged 8.62%. However, rates vary for each buyer. According to calculations from Fair Isaac Corp. (NYSE: FICO), the credit-score analysis company, buyers need a FICO score higher than 700 to receive Colorado’s average rates.

Colorado Landmark Realtors Saul Team Realtor Jordan Peterson, left, looks over details of a home with Listing Manager Kim Weinstein while preparing for a virtual open house at a Colorado Landmark Realtors listing by Marybeth Emerson on Wednesday in Boulder. (Matthew Jonas/Staff Photographer)

New practices prioritize safety

Dan Kingdom, managing broker and owner of WK Real Estate, said COVID-19 pushed the industry toward new technology. WK has offices in Boulder and Longmont and serves cities along the Front Range from Denver to Loveland.

Inventory challenged WK as sellers wanted to wait until normalcy returned. Kingdom said that between March and May, inventory in the multiple listing system declined by 40%.

When shelter-in-place orders went into effect in March, the real estate firm turned to virtual house tours, allowing buyers to put houses under contract without ever stepping foot on the property.

“We had basically changed how we are doing our business so it says a lot to the real estate industry about how resilient and adaptive that we can be,” Kingdom said.

Real estate agents moved to FaceTime tours. Others utilized 3D house renderings from Matterport Inc., based in Sunnyvale, California. Matterport offers 3D capture cameras or an iPhone application. Using panoramic images, Matterport creates three dimensional spaces. The technology also forms a “dollhouse” model that is a detailed floor plan.

“You feel like you are in that property without being there. Wherever in the world you may be, all you need is a browser and an internet connection,” said Volkie Yelkovan, director of product marketing for Matterport.

The use of what Yelkovan calls Matterport’s “24-7 open house” dramatically increased since March. While the company digitizes houses, commercial real estate dominates its uses.

He said that since March, the creation of models, or “digital twin,” spiked 137% across its national user base. Matterport also saw a 125% increase in views of its models.

Yelkovan added that 3D showings can benefit the industry by catching the attention of Millennial and Generation Z buyers. He said that buying a home should be streamlined through virtual options to meet the needs of generations that grew up in the internet age.

Lauren Hansen, CEO of the Loveland-based Information and Real Estate Services LLC, the MLS in the Boulder Valley and Northern Colorado, said virtual visits are likely here to stay and that it boosts efficiency of house searching.

According to the 2019 annual report from the National Association of Realtors, buyers who did not use the internet and immediately enlisted help from an agent searched for four weeks and visited four homes. Those who used the internet spent a longer time in their search, an average of 10 weeks, and visited 10 homes.

But Hansen said that virtual tours, which can encompass anything from 3D renderings like Matterport or Zoom walkthroughs, could cut down the search time and visits.

“If I can look at a home and a 3D or a virtual tour and realize I can’t stand this room or I really need something other than what this one has to offer, and I go to the next house, it just saved all of us driving around and making an appointment,” she said.

Virtual showings are prevalent enough to encourage IRES to add a virtual walkthrough filter option on the consumer search website coloproperty.com.

But, like shopping online for clothes, what looks good on the screen doesn’t always fit in real life. Jay Kalinski, broker/owner of ReMax Elevate in Louisville and owner of ReMax of Boulder, said that buyer movement to online resources forced Realtors to follow suit. During shelter-in-place, only buyers with houses under contract could visit in-person if permitted in the contract.

“That was probably the biggest shift, pushing the industry ahead a few years into the virtual age and having buyers try to get comfortable with the idea of making offers on homes they hadn’t physically been in,” Kalinski said. “As a result, we also saw a higher percentage of contracts falling apart.”

He said that contract fallout initially was “two to three times times higher,” than normal. Several factors contributed to buyers developing cold feet: furloughs and layoffs terminating loans, unexpected odors or allergic reactions and general concern over personal finances.

Moye said she had a contract terminated after the buyers weren’t impressed with the next door neighbors’ barking dogs and littered lawn.

“While I think the virtual tours are very helpful and get you 90% of the way, I still feel like seeing homes in person really needs to happen in order for a sale to happen and for people to be comfortable,” Moye said.

A Change of Space Owner Kathy Regini, pictured Wednesday in a condo she staged for a client at Peloton West in Boulder, said she more frequently stages home offices and other work spaces than before the pandemic forced homebuyers to consider how they would work in their future home. (Matthew Jonas/Staff Photographer)

Changing tastes

The pandemic changed more than just the way consumers buy. It also changed what they wanted.

Kathy Regini, owner of the home staging company Change of Space LLC in Boulder, paused services throughout shelter-in-place. But since the mandate lifted and moved to safer-at-home on May 9, her schedule returned to daily bookings. She furnishes and decorates homes throughout the Boulder Valley and the Denver Metro area in order to increase the appeal of properties for sale.

Inquiries flooded in quickly and all at once, reflecting the increase in houses on the market.

Before the pandemic, Regini rarely staged home offices. Now, it’s common. Along with staging dedicated home offices, she’s displaying smaller workspaces in other rooms, including kitchens, bedrooms and living areas.

“It really is all about showing people how they can live,” Regini said.

Hansen of IRES said that the era of trendy open layout houses may decline as buyers seek homes with rooms that can be used as private home offices, gyms or spaces that permit privacy away from families.

“We need spaces where we can be apart from each other. Not social distancing-wise, but basically on the verge of ‘You’re driving me crazy,’ or ‘We each need our own space’ kind of thing,” Hansen said.

She anticipates an increase in consumer requests for more outdoor space, higher internet speeds, closer proximity to outdoor recreation and spaces for secure delivery of products.

Kalinski said that he’s noticed an increase in buyers prioritizing designated work areas and outdoor spaces. In addition, consumers want more square footage.

“We’re also seeing clients looking to move to less dense areas,” he said. “People moving from Denver and Boulder to, say, Louisville or Lafayette, because there are fewer people. It’s less dense and so people feel less crowded.”

While habits change, Kingdom said that the roles of real estate professionals are more crucial than ever to ensure sellers and buyers are safe.

WK agents ask sellers to turn on lights and open doors, cabinets and closets before potential buyers arrive at showings in order to limit contact with those surfaces. Realtors and visitors wear shoe covers, face coverings and gloves. Hard surfaces are sanitized between showings.

Kingdom said that industry professionals help put the minds of sellers and homebuyers at ease by providing virtual alternatives that follow public health guidelines.

“They rely upon the real estate professionals to do things the right way and to take good care of them through this, through the real estate process, but also especially during this time of COVID,” he said.

© 2020 BizWest Media LLC

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