Even as the curve continues to flatten in New York and conversations of economic re-entry have just begun, it’s safe to say that the economy of yesterday will not be the economy of tomorrow as individuals and businesses begin to realize the ease and efficiency of facilitating business-as-usual virtually. And that conclusion is crystal clear for both the residential and commercial real estate industry, especially in light of WeWork laying off staff. Businesses begin to realize one of the most painless ways to cut a budget is simply to cut the amount of workspace. But in addition to cutting costs, there are several other ways the real estate industry will transform itself for this new economy especially since the days of face to face negotiations will not be possible for the foreseeable future.
As an entrepreneur and real estate investor myself, I know firsthand how cumbersome the buying and selling process can be with hundreds of pages of documents shuttling back and forth between lawyers, brokers, consultants, inspectors and many others over many months. As we continue adjusting to e-closings, we are starting to see the benefits and trends of taking the process digital and how they are turning into simple, one-stop real estate shops.
One benefit is that virtual negotiations promote a level of trust rarely seen in traditional real estate deal-making and contract executions and can help eliminate those heavy layers of negotiations with other parties by showing specific changes in real-time. This, in turn, reduces the amount of time to conduct such transactions from weeks and months to just days. This also reduces the bureaucracy and administrative costs of facilitating and closing the deal at a time where the phrase “counting every penny” is paramount.
Next, the buying and selling of real estate are quickly moving towards all virtual in this new world of social distancing, which will lead to greater scrutiny on privacy and cybersecurity.
The rise of virtual meeting solutions and related platform users for videoconferencing has also led to an increase in vulnerability, giving hackers countless opportunities to take advantage and steal your confidential data. As business systems become more vulnerable to virtual intruders as we’ve already seen, virtual real estate will see a shift in the use of smart and secure, blockchain-based contract platforms, which in turn promote high levels of security, trust and transparency in the deal-making and transaction process.
One other key transformation may be a surge in secondary home purchases in suburban or rural areas outside metropolitan areas for individuals looking for additional space in less dense areas should there be another outbreak. Many individuals are currently staying in “secondary homes,” taking refuge in Airbnb’s and residences Upstate or out east and as social distancing regulations are slowly relaxed, businesses will likely alternate rotating days where individuals come into the office and others work remotely.
As the current narrative on Covid-19 centers on preventing a second wave of the virus, regardless of that wave and any social distancing restrictions, real estate won’t return to “business as usual” as many discover the cost savings and convenience of taking the buying and selling process onto the digital wave. Instead, what we will start to see is the evolution of real estate into the second wave of more individuals realizing the safety and economic potential of conducting their transactions virtually.
Chao Cheng-Shorland is the CEO and co-founder, ShelterZoom & DocuWalk—blockchain document and contract platforms.
