It’s that time of year again. Chestnuts roasting on an open fire. Jack Frost nipping at your nose. And Rob making ridiculous predictions sure to be wrong about the year to come. Welcome to the predictions for the Year After the Pandemic.
Let’s all raise a glass and forget that 2020 ever happened, and move on to 2021. As you probably saw, I went 0-for-7 in 2020, but I managed to deflect much of the criticism by blaming the pandemic. I don’t know that I’m going to have that excuse available for next year, but I’m sure that I could find some excuse or another should I go 0-for-7 again.
Now, one important event that happened to me and Sunny this year was that we watched Eurovision Song Contest: The Story of Fire Saga on Netflix.
I would blame the quarantine, but… I can’t. I just wanted to watch it. And honestly, I kinda liked the movie. I smiled plenty, and even laughed out loud a couple of times. Will Ferrell is a genius at least in short doses. If you haven’t seen it, I do kinda sorta recommend it. It’s a fun light movie, best enjoyed in jurisdictions where cannabis is legal.
But I knew then that my music theme for 2021 would be the Eurovision Song Contest. So sit back, relax, and enjoy some of the most… ah… fascinating… sights and sounds of songs and artists you have never heard of. Because you’re probably an American and therefore care nothing about Europe. (See, e.g., soccer.) That turns out to be a mistake when it comes to pop music, because… well… there is literally nothing like these songs and performances in America. Nothing.
That might be a positive to some, but we’re really missing out on the spectacle and what can be loosely described as choreography of Eurovision. Let us correct that while we explore predictions sure to be wrong, or your money back. (Does not apply to VIP Subscribers.)
1. Say Hello to Your New Lordi, Long Island and Elsewhere
Yes, I know this was #2 in my 2020 predictions… but COVID happened… and besides, we had the cringefest that was the NY State Senate hearings. So what was predicted for 2020 will get a re-run for 2021… except it feels even more likely than it was last year.
Here’s what I wrote in reviewing the footage of the hearings by the New York Senate:
We already know what legislation has already been enacted, and what bills are in the pipeline because of Long Island Divided.
New York Legislature has already enacted S6874A which was signed into law by Gov. Cuomo. That new law now allows the Dept. of State to fine, suspend or revoke an agent or broker’s license for discrimination and steering. But that’s not the end, and after this hearing, even the bills in the pipeline will not be the end.
The following are already in the legislative pipeline:
- S7625 — requiring annual secret paired testing of fair housing, to be funded by the industry (I imagine through taxes or additional fees);
- S8096 — institutes the Obama-era HUD AFFH rule at the state level;
- S7581 — increases required training on fair housing, and the State will regulate the content of the training courses; and
- S7632 — awards compensatory damages, and increased fines to the tune of $25K for first offense, $50K and $75K for subsequent offenses.
Those were already filed and in place before this hearing. After this hearing, I imagine we might see a few more bills filed.
I believe that we will see the dominos start to fall in 2021. The bills already in the pipeline are all but guaranteed, of course, but I think we see more in 2021. One of them, I’m confident, will be some kind of limit on how many agents a broker is allowed to supervise under his or her license. I pointed that out in the above post:
One of them, I am convinced, will be a bill to limit the number of agents that a broker is allowed to supervise under his or her license. Why? Because of this:
You can almost feel Cafarela pissing his pants when Sen. Thomas straight up asks him about limiting the number of agents he can supervise. Seeing as how this issue of too many agents under one broker is a consistent theme for Sen. Thomas, I think we can expect that he will introduce legislation in New York that does just that.
But the two that are even more interesting come from the fair housing experts who testified at the hearing:
- Require real estate brokers and agents to do data collection, to be shared with the authorities, as the mortgage industry has to do with loan applicants; and
- Provide consumers with all of the listing information, so that agents cannot steer them by sending different numbers of listings, or listings in different areas.
That first one will land not just on brokers and agents, but on the MLS as well.
The idea is a simple one: just like the mortgage industry is required to collect demographic data on borrowers, the brokerage industry will be required to collect demographic data on buyers and renters. That data will be shared with regulators, with academics, and with advocacy organizations.
We don’t know what that data will show, but we do have an idea, don’t we? Given the disparity between black homeownership rates and white homeownership rates, any kind of buyer demographic data will show disparate impact. And disparate impact will lead to further action.
The second idea will land right on the MLS. Not only will any limits on syndication and IDX be frowned upon, but I really do think that NYS will mandate further regulations on drip emails that come from the MLS. More than one agent blamed the MLS software as to why minority buyers were sent such different houses than white buyers; naturally, the government will get all up in your business to make sure that doesn’t happen again.
Where this prediction, sure to be wrong, goes further is that I think the heavy hand of regulation will not be limited to New York State.
State legislators talk to each other, especially if they’re in the same party. New York is a blue state, controlled by Democrats. I see no reason why they wouldn’t talk to their counterparts in other blue states: California, Massachusetts, New Jersey, Oregon, Washington, Illinois, etc. etc. Even those in red states can raise regulating real estate as an issue because nobody, and I mean nobody, is going to come to defense of racist real estate agents.
I imagine that no matter what side of the aisle you’re on, standing up against racism is a surefire political winner, and it’s really low hanging fruit. NAR won’t really be able to defend this, nor does it really want to.
Finally, a Biden/Harris Administration will absolutely be talking to the NYS Democrat caucus about their actions against systemic racism in real estate. If the Administration needs some quick wins to burnish its social justice credentials, and it just might, going after racism in housing seems like an easy slam dunk win.
All of this, then, points to a massive wave of regulation coming down on real estate. And maybe that’s not a bad thing given what we saw in 2019 and 2020.
2. UNO: Opendoor + Redfin Finally Happens
Let’s just be honest here; I’ve been predicting (incorrectly, whew) that Redfin and Opendoor would eventually get married for quite some time now. Last year, I threw in Move which owns Realtor.com as well, because it made a lot of sense. This year, we’re going to repeat the theme, except that I get to use this song as the lyrics fit so well: All you have to do is to be ready for some action now.
Well I’ve been ready for this action for years. C’mon now! Let’s make it happen!
It has always made sense for Opendoor, the pioneer in iBuying, to get together with Redfin, the little brokerage who could who also happens to have the #2 or #3 web portal for real estate. Here’s what I wrote last year:
Furthermore, and far more important strategically, Opendoor knows that it has a major competitive disadvantage compared to its arch-rival, Zillow: CAC, or Customer Acquisition Cost. Plainly put, Zillow spends next to nothing on marketing Zillow Offers, because it owns the real estate category online: over 196 million monthly uniques, which means basically everybody who is looking for a house either starts on Zillow or ends up there.
That command of consumer eyeballs gives Zillow a huge advantage over Opendoor that it simply cannot overcome. In such a thin-margin business like iBuyer, having to spend 2-300 bps on marketing that your competitor doesn’t is a big deal.
So Opendoor teamed up with Redfin earlier this year. In the announcement, Opendoor CEO Eric Wu said, “Redfin and Opendoor are bringing together the reach of the most visited online brokerage with the scale of the largest iBuyer service to deliver a comprehensive service for more customers.”
The reach of the most visited online brokerage was 35.6 million average monthly uniques at the end of Q3. That’s 18% of Zillow’s 196 million. Now, Realtor.com was at 71 million. Even assuming some overlap, combine the two and we’re at 100 million or so — more than halfway to Zillow’s 196 million.
Everything I wrote then still holds true, but we now have a new X-factor that changes things and makes the marriage even more likely and even more sensible: Social Capital and Chamath Palihapitiya. That Social Capital took Opendoor public by way of merger with its SPAC (special purpose acquisition company) is, I think, a game changer for a union. Let me explain.
Redfin is, of course, a publicly traded company already. But I can’t help but feel that being answerable to investors is crimping Redfin’s style somewhat. Over the past year or so, I’ve consistently noted that Redfin is starting to look and act a lot more like traditional brokerages, talking more and more about profitability rather than changing the world. I think Glenn Kelman and team would prefer not to have to meet investor expectations for profitability and growth constantly while they still have a lot of work to do to change how brokerage is done, with W2 employees offering a far more consistent consumer experience.
Perhaps having a majority shareholder like Chamath, whose entire philosophy is to invest in and create social enterprises where doing good is as important (if not more important) than making money, would let Redfin be a bit freer to pursue change instead of earnings.
Plus, the seller leads that Opendoor’s iBuying generates can be monetized much more effectively by Redfin, which is not only a full service brokerage but also a major lead referrer through its Redfin Partner Agents program. Sure, Opendoor can do the same, but Redfin has a long track record of already doing that business very, very well.
Social Capital can essentially buyout Redfin’s existing shareholders with one of its SPACs (or raise another SPAC for the purpose), then merge that SPAC with the Opendoor SPAC and create a single company with two brands: Opendoor and Redfin. Redfin Now would just be a white-labeled Opendoor program, and all of Opendoor’s brokerage services would be Redfin. And combining Redfin’s traffic with Opendoor’s iBuying has always made a ton of sense.
So, I say that happens in 2021. I would throw Realtor.com into the mix, as I did last year… except that I think something else happens with them (see below). If you’re an investor in either company, well, all you have to do is to be ready for some action now.
3. Compass Rises Like a Phoenix
Last year, I predicted that Compass would implode in 2020. Thankfully for everyone at Compass, that was proven wrong for a lot of reasons, including COVID that completely changed how “exclusive inventory” strategies would and would not work.
However… for most of 2020, Compass seemed to be very quiet for the first half of the year or so. When COVID really hit the industry, Robert Reffkin was on a few virtual panels sounding rather gloomy.
Then something changed over the summer. I don’t know what, and have no idea precisely when, but more and more industry insiders have been telling me that Compass has gotten far more aggressive in Q3. They’re going back to their recruiting playbook from before the WeWork debacle, and having enormous success with it. They’re apparently done laying off people, or closing offices; if anything, Compass is expanding and acting very, very confident.
Part of the reason has to be the absolutely record-breaking quarters that Q2 and Q3 represented for the top producing agents in the industry. Compass has a lot of them, and even at sweetheart splits, they had to have had a couple of very, very good quarters. Very good quarters help with….
I think that Compass has found a new backer (or backers) to step in for Softbank. Perhaps it’s another SPAC, or just investors who saw the results from Q2 and Q3 and decided to go all in on Compass. Either way, Compass looks rejuvenated, is acting fresh, and getting aggressive again.
Plus, I’m hearing from my Wall Street friends that Compass has retained some big hitters (like Masters of the Universe type of big hitters) as investment bankers for a possible IPO in 2021, based on how well they’re doing in the second half of 2020.
My prediction for 2021 then is that Compass returns, rising like a phoenix, to make life hell for Realogy, RE/MAX, HomeServices of America, and other traditional brokerages. Opendoor did with its Social Capital SPAC merger, and I see no reason why Compass couldn’t. For both Opendoor and for Compass, the only thing that changed in 2019 was WeWork imploding, which caused Softbank to implode. None of their core businesses, none of their core strategies, none of whatever made Softbank believe in them changed. And none of what happened was their fault in any way, shape or form.
So why wouldn’t deep pocketed investors take a shot at Compass, when the housing market is absolutely insane, and Compass has as good a shot if not better than just about anybody in residential real estate in becoming a scalable business? I think they did, and I think they will.
A rejuvenated Compass, with a fresh war chest of cash, and shares that are publicly traded? With a CEO from Goldman Sachs who has obviously watched the enormous growth of eXp who used its equity to grrrrreat success? Ah yeah, to paraphrase Conchita Wurst, the 2014 winner of Eurovision Song Contest, Compass will rise like a phoenix, out of the ashes seeking rather than vengeance, retribution. (Although, the two are synonyms?) You are warned. Once Compass is transformed, once Compass is reborn….
4. The MLS Runs Scared Away from NAR
Two of the biggest events of 2020 have to be (a) the Moehrl and Sitzer lawsuits proceeding forward, and (b) the DOJ coming after NAR. In both of those cases, the lawyers and the government went after NAR, and they went after NAR because of perceived issues with commissions.
Thing is, in both cases, they went after NAR because NAR controls the vast majority of the MLSs in the country through its MLS rules and policies, which then flow down to the MLSs because they’re owned by REALTOR Associations who have to follow NAR’s rules and policies. It’s kind of a “single throat to choke” idea.
Up until 2020, it felt as if the MLS was being protected by Big Daddy NAR with its deep pockets, national presence, lobbying prowess, and large legal teams. After 2020, it feels like for whatever reason (aka, REX), the outside world has painted a big target on NAR. Now it’s starting to feel like being too close to NAR is more of a risk than a reward….
Plus, the reward is kind of… skimpy today. Really, what the MLS gets from being under NAR is some liability insurance coverage with relatively low limits. I say relatively because… let’s put it this way: the insurance won’t cover damages from the commission lawsuit, which will be in the billions of dollars. Plus, there are insurance companies eager to sell some fat liability insurance packages to mid-sized and larger MLSs after all.
It isn’t that non-REALTOR MLSs are somehow immune from lawsuits or DOJ action; we know they’re not. And if DOJ forces NAR to do something — like allow lockbox access to non-MLS agents — then every MLS is well-advised to follow along, since you don’t want the DOJ to come knocking on your door.
The risk-vs-reward is that you have less of a chance to get dragged into the process if you’re not affiliated with NAR. For example, in the Moehrl lawsuit, the following MLSs are named/identified as “Covered MLSs”:
- The Bright MLS (including the metropolitan areas of Baltimore,
Maryland; Philadelphia, Pennsylvania; Richmond, Virginia; Washington,
- My Florida Regional MLS (including the metropolitan areas of Tampa,
Orlando, and Sarasota);
- The five MLSs in the Mid-West that cover the following metropolitan
areas: Cleveland, Ohio; Columbus, Ohio; Detroit, Michigan; Milwaukee,
Wisconsin; Minneapolis, Minnesota;
- The six MLSs in the Southwest that cover the following metropolitan
areas: Austin, Texas; Dallas, Texas; Houston, Texas; Las Vegas, Nevada;
Phoenix, Arizona; San Antonio Texas;
- The three MLSs in the Mountain West that cover the following
metropolitan areas: Colorado Springs, Colorado; Denver, Colorado; Salt
Lake City, Utah;
- The four MLSs in the Southeast that cover the following metropolitan
areas: Fort Myers, Florida; Miami, Florida; Charlotte, North Carolina;
and Raleigh, North Carolina.
Note that the largest non-REALTOR MLSs, such as NWMLS and MLS PIN, are not named here. Only REALTOR MLSs are named, because the plaintiffs are going after NAR, so want to go after MLSs that have to follow NAR rules and policies.
Similarly, the NAR-DOJ lawsuit-cum-settlement that just happened has a clause that requires NAR to appoint an Antitrust Compliance Officer. Said Antitrust Compliance Officer must then:
Within 30 calendar days of Management’s or the Antitrust Compliance Officer’s learning of any potential violation of any of the terms of this Final Judgment, Defendant must file with the United States a statement describing the potential violation, including a description of (1) any communications constituting the potential violation, the date and place of the communication, the persons involved in the communication, and the subject matter of the communication, and (2) all steps taken by the Antitrust Compliance Officer or Management to remedy the potential violation.
Practically speaking, what this means is that NAR has no choice but to ride herd on all REALTOR MLSs to make sure that they’re behaving and that all of their Participants are behaving. I’m not sure how NAR can do that without demanding all manner of records and information from each MLS.
That’s going to be a pain in the ass administratively speaking, no? You could be a Board member or MLS CEO who loves NAR, and still think that’s a major hassle. Is the hassle worth the insurance coverage? Only they can decide.
Finally, we can’t forget that a bunch of REALTORS were just told they were deplorables by their own trade association. (See #7 below.) I can’t imagine that won’t play into calculations as they think about the risk vs. reward of remaining a REALTOR MLS with the DOJ and lawyers breathing down NAR’s neck.
So, my prediction sure to be wrong for 2021 is that we start to see a number of MLSs take steps to distance themselves from NAR. The Board members, who have long been stalwart REALTOR defenders, will increasingly look for ways not to be rolled up in some lawsuit or discovery process or regulatory regimes that NAR will be.
The Associations might be saying, “Stay forever more! God, I need you, I need you!” and the MLSs might reply, “I’m running, I’m scared tonight.” There might even be backup dancers around for that duet.
5. CoStar Builds an Empire
CoStar’s entry into residential real estate by acquiring Homesnap (and bidding on Corelogic) is possibly one of the biggest events of 2020. But we need to think about things some more.
Andy Florance has historically built CoStar through acquisitions. Here’s just a partial list from Wikipedia:
- In April 2012, CoStar Group acquired LoopNet for $860 million.
- In April 2014, the company acquired Apartments.com for $585 million.
- In April 2015, the company acquired Apartment Finder for $170 million.
- In July 2015, the company acquired Belbex an online marketplace and information provider for commercial property based in Spain.
- In February 2017, the company acquired Westside Rentals.
- In February 2018, the company acquired ForRent.com from Dominion Enterprises for $350 million in cash and $35 million in stock.
- In October 2018, the company acquired Realla.co an online marketplace for commercial property based in the United Kingdom.
- In November 2018, the company acquired Cozy Services for $68 million.
- In February 2019, the company announced that Oxford Economics will provide the economic data and forecasts used in CoStar’s products.
- In June 2019, it was announced that CoStar Group would acquire Off Campus Partners, LLC, the leading online marketplace for off campus student housing.
- In October 2019, it was announced that CoStar Group would acquire STR, Inc, a global leader in hospitality data analytics, for $450 million.
- In February 2020, it was announced that CoStar would acquire RentPath for $588 million.
Entering the rental space with Apartments.com led to multiple further acquisitions, with Apartment Finder coming just a year later. Andy Florance has a history of building empires and quickly.
Why would we think he would behave differently in residential real estate? That would be so against character and history.
Which means… we get to think about things. Who makes sense for CoStar to acquire next?
The obvious answer is Realtor.com. If CoStar’s goal is to displace Zillow as the go-to portal for consumers, then buying the #2 portal seems like a necessary step. I mean, whatever Realtor.com would cost to acquire from News Corp is likely a fraction of what it would cost to do enough consumer marketing to overtake Zillow’s lead in traffic.
Furthermore, Florance said some very complimentary things about REA Group as CoStar entered residential real estate. Guess who is a co-owner of Realtor.com with News Corp? That’s right, REA Group, the company Florance so admires and whose business model and profit margins he would like to bring to the industry.
There is, however, a fly in the ointment: NAR.
To acquire Realtor.com, one assumes that CoStar would have to get the blessing of NAR, who owns the Realtor.com URL and the REALTOR trademark. There has always been a license agreement between NAR and whoever operates Realtor.com; I assume CoStar would need that license agreement as well.
Problem is… there is some history between NAR and CoStar.
See, back in 2012, when CoStar was acquiring Loopnet, the FTC jumped in and said Nyet… unless a key asset of Loopnet’s was spun off. That asset? Xceligent, which was the closest thing to CoStar’s core business of researched property records. So it was spun off.
Then in 2013, Xceligent got itself a big, big partner: NAR.
In order to provide commercial real estate information services, the National Association of REALTORS® (NAR) recently announced Xceligent as a new REALTOR Benefits® Partner. As part of Xceligent’s expansion into providing a national public marketing platform for commercial real estate listings, Xceligent purchased ePropertyData from Second Century Ventures, the strategic investment arm of NAR. As part of the REALTOR Benefits® Program, Xceligent will be the exclusive provider of commercial real estate information services with preferred pricing for REALTORS®. Pricing is also guaranteed to be lower than Xceligent’s competitors. The national public marketing platform will launch in early fall 2012 at CommercialSearch.com. We have included answers to some frequently asked questions below.
Over the years, NAR has tried very hard to get into the commercial MLS business, whether with Xceligent, with actual MLSs, or with CIE’s (Commercial Information Exchanges). HAR, for example, has long had a CIE called CommGate.
So it’s reasonably safe to assume that the relationship between CoStar and NAR probably doesn’t include a lot of Christmas cards and joint vacations.
If you’re CoStar, then, how do you bury the hatchet, smoke the peace pipe, let bygones be bygones… you know, and get NAR’s blessing on acquiring Realtor.com from News Corp?
Acquire RPR from NAR, that’s how.
RPR has been a white elephant for quite some time now, an albatross around Bob Goldberg’s neck from the moment he took office. He has clearly signaled that he intends to shut down RPR… but he can’t really do that without losing face or making his predecessor Dale Stinton lose face.
If CoStar were to make an outsized offer for RPR… say $100 million for it? Would anybody at NAR say no to that? Doesn’t that make everyone involved with RPR look like superstars? Note that CoStar recently acquired a German commercial real estate data company called Emporis, and said the price was…:
“It’s in line with the coffee budget, and lately we haven’t been using much coffee here at CoStar,” Florance said in response to an analyst’s question about the purchase price. “It’s a relatively small purchase price, small revenue stream.”
Keep in mind that CoStar paid $250 million cash for Homesnap, because of its relationships with MLSs and with BPP. Isn’t $100 million for RPR worth it for the relationship with NAR, and for NAR’s blessing to buy Realtor.com from News Corp?
I would think so. Especially when RPR has data relationships with numerous MLSs that either rival what Homesnap/BPP has or is superior to what they have… because REALTORS. And RPR has been trying to be a player in commercial real estate:
Recently, RPR has announced direct partnerships with Catylist and Brevitas, which further bolstered our commercial listing totals. Today, we’re pleased to announce another strategic listing partnership with CREXi, the industry-leading public marketing platform for commercial real estate listings.
That’s like killing six birds with one stone: make NAR happy, gain more MLS relationships, get even more residential data, put the screws to Catylist, Brevitas, and CREXi, clear the way to acquire Realtor.com, and gain an ally against potential competitors. Seems like a pretty smart move to me.
I can’t wait to know what Andy Florance thinks about things, but I’m predicting (sure to be wrong!) that CoStar builds an empire in 2021.
6. First Time Homebuyer Numbers Collapse, But Housing Market Booms
(I do have to point out that those costumes are from Dolce & Gabbana, and probably cost more than the median house in America.)
Most of us, readers and writers alike, are probably at an age where “date night” means going out to dinner with your spouse. The Pandemic was of serious concern, of course, but… not a lot of us were dating, right?
If you are in the younger generation, however… COVID made what was already treacherous downright impossible. From Vox.com’s story on COVID’s impact on dating:
Covid-19 has made dating harder and more laborious than it was before, singles told me in more than a dozen interviews. Apps are now one of the only ways to meet people, but it can take weeks or months to take a budding romance offline. Even then, promising relationships sometimes fail to go anywhere because people aren’t at their best right now: Being surrounded by disease, death, and financial instability takes an emotional toll. (This is partly why marriage rates plummeted during both the Great Depression and World War II.)
In some ways, the pandemic has only exacerbated problems with dating that had been bubbling up in recent years. Nearly half of Americans say dating is harder now than it was a decade ago. This coincides with the rise in dating apps, which are increasingly becoming the main way to find love: 39 percent of heterosexual couples and about 65 percent of gay couples met online in 2017, according to a 2019 Stanford University study. But although dating apps increase your pool of potential partners, many people say they can make dating feel impersonal, while also increasing the risk of being lied to or sexually harassed.
Couple this with the fact that millennials are delaying marriage or not marrying at all, which means they’re spending more of their life dating than previous generations. Millennials and Gen Z also have less sex than previous generations for many reasons — including that they’re less likely to be in a couple.
Covid-19 is amplifying all of these issues, and Glaser and Bui are not alone in their frustrations. As I reported this story, I spoke with single people in their 20s and 30s from a range of socioeconomic backgrounds and sexual orientations, along with researchers studying how the crisis is changing the dating landscape. They all described how the pace of dating has slowed down, making it harder and more time consuming to start romantic relationships. Now, singles are beginning to worry that it may have a domino effect on their lives, derailing their plans to marry and start a family.
And that’s just one story. You can do some research yourself on the impact of COVID on dating in 2020… and it wasn’t as if marriage rates were skyrocketing before the virus hit.
Millennials and Zoomers might have been swiping right a lot to try and connect while locked down, but the thing about dating is that there comes a point where you kind of have to meet in person. I mean… if you don’t dance the lasha tumbai with the other person, you have no idea whether you’re compatible or not, right?
So it seems obvious that we can expect a massive drop in family formation in 2021. Unless we return to some ancient patriarchal times with arranged marriages and such, no dating = no relationships = no marriages.
Of course, since family formation is one of the top drivers (if not the most important driver) of first time home purchases… we all can expect a significant drop in first time homebuyer activity in 2021.
However… there is a significant silver lining for REALTORS to this cloud.
While marriage numbers might be historic lows, divorce numbers are way up thanks to the pandemic:
The number of people looking for divorces was 34 percent higher from March through June compared to 2019, according to new data collected Legal Templates, a company that provides legal documents.
The combination of stress, unemployment, financial strain, death of loved ones, illness, homeschooling children, mental illnesses, and more has put a significant strain on relationships.
The data showed that 31 percent of the couples admitted lockdown has caused irreparable damage to their relationships.
And according to National Law Review, this spike in divorce and separation is entirely expected:
Relationship counselors consistently rank financial stress, boredom, disagreements about parenting, and arguing about household chores as the most common sources of relationship trouble.
With many couples stuck in the house, homeschooling children, and facing added financial uncertainty, it should come as no surprise that the coronavirus pandemic is placing additional strain on relationships that were already struggling.
Additionally, support systems have become more difficult to access. Venting to friends over coffee or spending a night out on the town just isn’t an option right now. If you’ve been using these outlets to manage stress—or, perhaps, to avoid dealing with deeper problems—-you may find yourself suddenly in the position of having to confront your difference head on.
It’s no surprise that given this, many marriages have reached their breaking point.
Why is this a silver lining for REALTORS?
Because marriage creates one transaction: the newlyweds buy a house. A divorce creates three: sale of the divorcing couple’s home, and the subsequent purchase of new homes for each spouse. To quote Verka Serduchka, ein, zwei, drei!
This is why I recommended six years ago that NAR acquire Ashley Madison:
“Most people understand that household formation is key to the real estate market,” said Bob Goldberg, SVP of NAR who oversaw the acquisition. “But most people only think of marriages when thinking about household formation. Since Gen-Y is simply not marrying at the rate we need for a robust first-time homebuyer market, burdened as they are with student debt, a terrible job market, and odd dating market dynamics, we knew that the real estate market was in trouble over the next decade or so if we just rely on these twentysomethings to get married and have kids. What people don’t realize is that divorce also creates households — in fact, it creates two households from one. We aim to encourage household formation, one way or another.”
Okay, that post was an April Fool’s joke… but it’s one of my favorites of all time, so… I had to repost it.
Of course, one sale and two purchases means even more pressure on inventory, which means home prices have to keep rising at its current rocketship-like rate. So more transactions at higher prices as we get fewer two-become-one and more one-become-two. What could be better for real estate?
So while singles might be isolated, depressed and lonely thanks to all of the lockdowns… maybe REALTORS will be dancing the lasha tumbai at the end of 2021. OK! Happy end!
7. A New Professional Association Forms
One of the more significant, but less talked about, things that happened this year was the new NAR Speech Code. I wrote about that pretty extensively, and proposed an alternative to what NAR was contemplating.
If you want the details, go ahead and read the post as I go through all of the proposed changes and what they mean there.
Well, to prove that yours truly does not deserve being on Inman’s Influencer List, NAR went right ahead and passed everything proposed. So now, we have a Speech Code at NAR that expands the Code of Ethics into a REALTOR’s personal life, personal conduct.
That by itself would not be such a huge problem… except that we live in 2020, in the midst of the Age of Cancel Culture, and society has never been more divided. I wrote in my post above:
Plus, Conduct Unbecoming clause is something that conservative REALTORS can get behind, without feeling as if they are the target. Rather than dividing REALTORS, it creates a far more unifying discussion among all REALTORS about what conduct is and is not so egregiously unprofessional and disgraceful as to deserve sanction.
There is no question that posting insults and epithets online to denigrate people on the basis of any of the protected classifications is disgraceful. I cannot believe that any REALTOR anywhere in the country would accept such behavior. At the same time, insulting other REALTORS as racist bigots or commie scum simply because of a political disagreement is also disgraceful and unprofessional.
I was trying to be nice, and not inflammatory. Because the truth is that conservative REALTORS were apoplectic. They really saw these changes as targeting them for their political and religious values. I won’t go through all of the social media commentary about these changes, because chances are, you’ve already seen them. They’re easy to find online too.
It actually doesn’t much matter whether their concerns are or are not justified. A lot of people spend time and energy arguing online about how even raising the issue is bad, or stupid, or bigoted, or whatever. None of that matters one bit.
What matters is how these changes make roughly half or more of REALTOR members feel. And I think it’s safe to say that most of them feel as if their own trade association, to which many have devoted thousands of hours of volunteer service and thousands of dollars of RPAC contributions, just called them a basket of deplorables.
That then leads some brokers and agents who don’t fit with the cultural movement du jour in Chicago and Washington DC to start asking themselves questions, such as: “Eye for an eye, why tear each other apart?” and “Please tell me why, why do we make it so hard?”
The conclusion they would reach is that perhaps what’s gone between them has come between them… and it is no longer worth fighting. Separation might be preferable to tearing each other down.
The MLS is the only real sticking point, but… as we noted above, there are some governmental and legal reasons for the MLS to be scared of being too closely tied to NAR right about now… which means…
A new trade association of conservative real estate brokers and agents in more conservative parts of the country, using a non-REALTOR MLS for their day to day business, could rise up in 2021. Something like the American Real Estate Brokers Association or perhaps the League of Real Estate Patriots.
Now, we know that real estate is often organized at the county level — MLSs are organized that way, because local REALTOR Associations are organized that way. Here then is the map of 2016 Presidential Election results by county:
(I couldn’t find a 2020 map worth a damn, since there’s still quite a bit of dispute happening about 2020.) The big REALTOR Associations, along with large regional MLSs, are in or near the blue counties, because that’s where the population is. But do brokers and agents in rural or exurban markets care whether they are in the same Association or the same MLS as the urban/suburban brokers and agents?
I don’t know, but I suspect they care less than we might imagine.
And perhaps what we see isn’t quite as big a step as leaving NAR itself; perhaps the new professional association is formed as an internal “party” within NAR itself. Think WCR or YPN type of a thing, except without official blessing from NAR itself; more of an organized bloc within NAR. I mean, if we’re gonna get tribal, then I assume we’re gonna get tribal.
This sort of thing has always lurked beneath the surface of REALTOR world. The difference in 2021 may be that the REALTORS on the other side might be happy to see the “deplorables” leave; in fact, they might try to actively push them out. Comments on social media to date suggest that REALTORS on the left are more than happy to excommunicate the REALTORS on the right.
However it comes to pass, I am predicting a new organization of real estate professionals forms in 2021 to provide a home for those political, religious and cultural conservatives who feel alienated from NAR. After all, divorce is only the second worst possible thing in a relationship; the worst is being stuck in one that produces only teardrops.
2020 was the Black Swan year of pandemics and imprisonment. 2021 will be better; it couldn’t possibly be worse… could it? In many respects, 2021 will be a far better year than what we just lived through. But in some respects, 2021 will bring us events that were merely delayed due to COVID. In other cases, 2021 brings us whole new events because of what happened in 2020.
Whatever happens, I know it will be yet another interesting year to live through. And since all of these predictions are guaranteed to be wrong, or your money back, I look forward to going another 0-for-7 next year.
If nothing else, I hope these predictions have mostly entertained you and maybe even made you think about things. And at a minimum, I hope they have introduced you to a whole new world of music, dance, sight, fashion and spectacle that is the Eurovision Song Contest. I leave you with one final… ah… sensation that could not fit anywhere else.
Until next year!