Changes in Home Buyer Behavior: COVID 19 Edition

Thanks, everybody for being here. I've got Matt Hendricks with me. Other than my buddy, I forget, your official title was Zillow. What's your official.

I'm a director of broker relations, so I deal with our brokerage partners across the country. Like good people like yourself, Keith. I'm his least favorite.

So really excited that I wasn't sure when I reached out to Matt that we'd be able to. They're a publicly traded company. He's been really gracious in that he really. I sent him a list of questions and I'm going to ask all that I can if there may be some things that he can't answer. And I want everyone just to understand that that's because there are publicly traded companies and there are some things that they can only share on earnings calls. And if we let the cat out of the bag, then you could do insider trading and you could all retire, but Matt would get fired and that would be bad for him. So I'm going to, I promise I'm going to ask him all that I can and I'll ask him things that you guys want me to ask. But if he can't answer, it's not because he's being evasive, it's because he works for a publicly traded company. So with that as the caveat, this started as a conversation between Matt and I where I was really curious about changes in buyers behavior on Zillow and we started talking about it actually like on week one of all of this insanity. And it's been long enough now that I think they've aggregated enough data that they can really start to share some things and we can shed some light. So let's just start with some high level stuff, Matt, if that's cool. Like how do you think social distancing we've been social distancing, how's that permanently going to stick like long term with regards to residential real estate? Just from the data that you've seen and your opinion?

I think there's a lot of different fronts to that. We're going to see. We're going to see changes that have been enacted now because of the times that we're in that you can't put back into a box once we're done with this because there is no end date. There's so many different parts of this going on. And it's also going to be so regionalized that, hey, once we start going down this path, we can't just stop and go, oh, let's go back to the way it Was like even before this call, we were talking about how long are we going to have to wear masks for? How long is social distancing going to be in place? Whether it's San Francisco or New York City or where I live in Denver, we have to adapt to the masses across the board. And if that's meaning a totally different virtual experience while still trying to hang on as much as possible to that human experience, how do we make those two blend together even more in the future to make sure that we don't lose that human experience? Because none of us want to. I mean, I wish we were sitting side by side right now doing this. And I know that's how the majority of agents and brokers feel as well. Like when it's a human industry, this is a very relationship driven industry. So how do we tie in us not having to be right next to each other with that relationship, with those laughs, with that therapy, with everything else that goes along with all those transactions and that could be virtual open houses, tours, all these different things that we physically can't go out and do, how do we inject ourselves back into that so that it's not lost and it's not just a purely digital world?

So let me unpack that a little because what I think I heard you say was some of these things that.

May have been.

Not as common, they weren't uncommon, but they weren't ubiquitous. Everybody wasn't doing them right. It seems like over the last decade, I've been in real estate for 20 years and so I've seen it change. But it seems like more over the last decade, the consumer has gotten sort of further and further into the house. Right. Used to be they, you know, they got maybe to the neighborhood on their own, but they wouldn't get it all the way to the front door. And more and more through technology, through imaging, through virtual tours, through 3D tours, through all of these, this technology, they're now getting further and further into the home. And that is there and was sticking, but it's probably going to be there like unlike ever before. Or like, is that it? That's the new normal it will become? Instead of a nice to have and expected.

I think definitely there will be much more of that that's going to be unexpected. It won't take away from stuff that we will be able to get back to doing. But I think in the future, if I have the ability to go look through 50 houses in a purely digital way, before I even drag my kids and my spouse out to go see That I want to have that experience now. Yes, it was prevalent prior to all this, but now we've accelerated that, that, hey, there's not another way to do it for the time being. So, yes, that's what I mean by stuff. Some of this stuff sticking around. Like even parts of the transaction that are being forced by regulators to be digital by different states and everything else that it's going to force a lot of these people to look at the way things have been done historically because they didn't have a plan B. Like if a state closed, like the recorder's offices, when have they ever had to close before and they didn't have the ability to go work from home, those things. Now it is part of their contingency plan that a, if this happens again, we have to be able to still function. So it's, there's goods and bads that it makes everybody reassess what they're doing. But I think it also will drive, drive technology and drive preparation, planning for a lot of different things that we just didn't realize could actually be shut down.

And so for us, like, you know, I'm 48, not 28. I mean, I'm a real estate, not a technology guy. Like, I understand the value of technology. I try to be an early adopter if I think something's going to make sense. But what most of the time, what we're best at on the residential real estate side is the human aspect. Right. Working with the human beings. Do you think the pace of technology is going to speed up now or do you think it's going to slow down?

I think it's going to speed up for some of the reasons I just said. I mean, let's look at it just for an example. Let's look at any office that currently still relies on some type of paper system. Maybe they have wanted to change in the past, but it would disrupt their agents, it would disrupt the way they do business. Well, now you physically can't use that paper. So is this the time to make that hardship that you thought you were going to have to do years ago, but now it's being forced upon you? And does that make you more efficient? Does that make you better? And does that get all the people that have been doing it the same way for 30 or 40 years over the hump just to continue moving the business forward? And that's one small example of how that works. There's 100 more that we could discuss in this. In this time too.

Yeah. Okay. Okay, I'm gonna get to the specific questions like the real the data from your site. But I'd love to dig in on iBuying just for a second. You guys have an iBuying program? Did you stop your iBuyer program or is it still going?

It's on pause right now because we're dealing with a lot of shelter in place regulations. We're dealing with a lot of safety regulations. Obviously our employees are our number one priority in making sure that they're safe. But then our customers and the buyers and sellers out there are also a huge priority for us. If it's not physically feasible to make that continue moving forward, then we had to put it on pause. So multiple different reasons there, but it's for the safety of everybody around and we will see how those things start to open up in the near future.

But you still, you believe that there'd be something you'll continue to do is just hit the pause button for now, not gone forever. Do you think that that on the other side of this is ibuyer going to be more of a thing, less of a thing for sellers?

I see it especially in the near term being more of a thing because let's think about just our mindset that we're in right now. If I'm worried about people, about social distancing, about having somebody come and walk through my closets and my bathroom and everything else, what is the easier route there as far as do I want to deal with that now, a month from now, six months from now? I think there will definitely still be a great place for the ibuyer. I think it will be attractive to a different set than it was prior. This isn't, this is a life change, but it's not the life change or the ease and convenience that we had before this. I think it's an ease and convenience as to the way the world looks today. And I think the ibuyers will still be very prevalent. I think it will be a great option for people and you know, a lot more things may be an ibuyer on the.