Buyers looking for home offices: CEO on real estate purchases during pandemic

Brown Harris Stevens CEO Bess Freedman joins Yahoo Finance’s On The Move to assess the future of New York real estate post-pandemic.

Video transcript

JULIE HYMAN: You're watching "On the Move" on Yahoo Finance. I'm Julie Hyman. Well, yesterday, we got some surprising new home sales for last month that showed an unexpected increase. But we've also been getting a lot of anecdotal reports about the flow of real estate right now and also how it's had to make changes to adapt to this new environment. We're joined now by Bess Freedman. She is Brown Harris Stevens CEO. She's joining us from New York City.

Bess, it's good to see you. So let's talk, first of all, about what is happening in New York City, because we have been discussing changes that urban areas like New York might be seeing in the wake of this-- whether it might accelerate sort of migrations, in some cases. Are you seeing a lot of new listings?

BESS FREEDMAN: No. I mean, as everybody knows, New York City has been on pause. So we have not been able to do showings. And agents have been hesitant to put listings on the market right now, because if you can't show them, they don't want to have that clock ticking for on the market. So we haven't seen a lot of new listings. I think once the pause is lifted and agents can show again, you're going to see a huge uptick in activity and listings.

ADAM SHAPIRO: Hey, it's Adam Shapiro.

BESS FREEDMAN: Hey, Adam.

ADAM SHAPIRO: Good to see you. I have a buddy in Chicago who listed his condo, and got an offer-- virtual-- over list, so good for them. But nationwide, there's this discussion of people leaving major metropolitan areas for more rural areas or low-tax states. What credence do you give to this-- legit, a real concern, or what?

BESS FREEDMAN: Well, you know, there was a migration even before the pandemic. You saw people leaving New York to go to Florida because of the tax issue. And I think you are going to see some flight from New York City. We've already heard of clients who want to list and sell and leave New York City. So you're going to have some of that. But that also offers opportunity, you know, for us to help them to sell, to rent, to whatever they want to do. So I think it's going to be a mixed bag. It's hard to tell right now until we get past this.

HEIDI CHUNG: Yeah, and, of course, you operate in the luxury space. So we're talking about a clientele and demographic that perhaps is better cushion to handle this storm and look for those opportunities. For the existing listings on your platform, have you seen price slashes? Have you seen sellers waiting to see if they can hold onto the prices at their current levels?

BESS FREEDMAN: Well, we have had-- we've been in a price correction even before this pause in New York City. And so sellers have taken a lot of their listings off of the market because they feel people are not really looking at it as much and they can't see it. So we're going to have to wait and see. But what we have seen is that the consumer is looking for different things.

We're seeing a huge uptick in people looking for outdoor space, home offices-- you know, people are looking at how they live differently because of this pandemic. And so we'll see a lot of that impacted more when the market opens up.

RICK NEWMAN: Hey, Bess. Rick Newman here. I know some people are wondering, is this going to be a fantastic buyer's market the way it was during the last recession when home values fell so much? So you know, this is not a recession triggered by a housing bubble, so it's not like that. But do you feel like there will be good bargains for buyers and there are ways to find them?

BESS FREEDMAN: I think it's an incredible opportunity market. And I think buyers-- I don't think sellers are going to totally cut prices. New York City, they won't do that. But I do think there'll be a further correction. And any buyers that have been thinking about purchasing, there's a lot of inventory so they can pick and choose. Rates are great, so I think that it will definitely present itself as an opportunity for a lot of people who've been on the sidelines.

JULIE HYMAN: Bess, talk to me about the virtual showing situation. How comfortable are sellers and buyers with that right now? How easy is it to set it up? I mean, because one would think you would have to have somebody come into your home normally and shoot it, but now you probably have to do it yourself.

BESS FREEDMAN: Yeah, I mean, it's-- we've done videos on listings, but we're really not supposed to even be doing this sort of virtual showings. We're not supposed to be doing any of that, because, as you know, in vertical living, it poses all these threats because you're going to elevators and common space. And so right now, we really can't even do that. So people see things online and photos, we can have FaceTime and speak to them. But I think it's going to be really hard to transact and sell until you can get into the space and show it and see lobbies and amenities and all those things.

ADAM SHAPIRO: We all have friends who are agents-- real estate agents. We know how hard all of you work, [INAUDIBLE] weekends. What advice do you have for people who might be considering this as a career change, especially with the job situation, and what will be pent up demand to do deals?

BESS FREEDMAN: I mean, I think if people have been thinking about getting into real estate, it could be a very good time to do that. There is a lot of opportunity out there, as people think about-- I've heard of a lot of situations where people [INTERPOSING VOICES]. And for us as professionals, it offers you a new opportunity to come in and work with them. But by the way, it's not an easy job.

Despite what that "Million Dollar Listing" shows you and all those other reality shows, it is a real hustle. And it's a lot of hard work. And the ones that do it well, they're not on TV, you know, pretending that it's something that it's not. So it's-- you really have to put your nose down and work hard to do well at this.

JULIE HYMAN: Bess Freedman, thank you so much for your time. Be well. Brown Harris Stevens CEO, appreciate it.

BESS FREEDMAN: Thank you so much. Be safe, everyone.

JULIE HYMAN: Thank you. You too.