Right now, the COVID-19 pandemic is still sending shockwaves through economies and societies worldwide. On the economic front, there’s been obvious damage to businesses both large and small. On the societal front, the damage is sadly becoming clear as the global death count rises. And as the pandemic continues to rage, analysts keep trying to predict the long-term effects the crisis is going to have on major business sectors. One that’s received plenty of scrutiny of late is the global real estate market.
Speaking generally, the outlook is something of a mixed bag. On the commercial real estate front, nobody seems to know what it’s going to take for businesses to safely reoccupy their facilities for the long term. And in the meantime, commercial property owners are taking a beating. On the residential front, analysts keep predicting that there’s about to be a massive slowdown of buying activity that will lead to a glut of properties on the worldwide market. The trouble is, the slowdown doesn’t seem to be materializing.
As it turns out, technology might be playing a key role in keeping the residential real estate market humming along. And, if SAP and Honeywell have anything to say about it, technology might also provide an answer to keeping commercial buildings safe and habitable in a post-COVID world. To elaborate, here’s a look at what’s happening.
Residential Real Estate at a Distance
There are two major factors that led analysts to predict that residential real estate markets were headed for trouble. One was that pandemic-related shutdowns were expected to curtail the buying power of those who were looking for property at the time the crisis started to unfold. The second was that the physical limitations imposed to curb the spread of the virus were disrupting the operation of real estate agencies, theoretically depriving them of opportunities for sales.
Now, several months into the pandemic, neither factor has made much of an impact. According to David Sessford, CEO of Ready Steady Sell, the reason is that analysts had misjudged the shape of the modern residential real estate market. According to him, “Home sales today are far less reliant on in-person dealings than they used to be. Today, a homeowner has multiple options to list their property for sale, but the one thing they all have in common is that they rely on the internet as a key sales tool. They use it for home tours, advertising, and almost every other aspect of the sales process.”
That meant that much of the modern selling process could continue despite the restrictions on in-person activity. And in most places, the realtors, notaries, inspectors, and others who conduct real estate transactions were quick to adapt to online-only operations. And at the same time, willing buyers kept on coming, too.
Some of that was due to the very same kinds of technology. Many businesses stood up remote work options in a hurry to keep employees on the job and continuing to produce. That mitigated the loss of buying power for many of the people who were in the market for homes. That has kept home sales moving at a brisk pace, despite high overall unemployment figures. It’s an economic anomaly that seems to be saving the residential market.
The Data to Reopen Safely
The world of commercial real estate faced a much different challenge than that of the residential market. In commercial real estate, long-term leases represent the bulk of industry revenue. When business shutdowns started becoming a key defense against the spread of COVID-19, the big question was how long business leaseholders would continue to pay for their shuttered facilities.
The answer was, not for very long. In the early days of the crisis, businesses started looking to building owners for relief as their sales revenue evaporated. That reality meant commercial property owners needed to do whatever it took to get businesses back to work and back to paying their monthly rents. To do it, they needed some serious planning help to make sure that their reoccupied buildings would be safe for all who returned to work in them.
That’s what was behind a newly-announced partnership between SAP and Honeywell. The two have come together to create a cloud-based facilities management platform informed by the myriad sensors and products that Honeywell has on offer. The new system provides building owners with the insight and controls they need to craft realistic and effective plans for stepped-up cleaning measures, floorplans with necessary social distancing space, and even to maintain a safe level of airflow to reduce the chance of a COVID-19 outbreak.
The system also gives building owners a data analysis platform that can help them to run more efficient facilities going forward. It provides an all-in-one system to integrate building automation, energy efficiency, and security hardware to reduce operating expenses. That will help building owners to offset the losses they’ve suffered during the pandemic, as well as to combat an expected occupancy drop as more businesses opt to continue large remote work programs instead of maintaining big office footprints.
A Light at the End of the Tunnel
Although the COVID-19 pandemic has been difficult for people and businesses alike, the global real estate market has avoided catastrophic losses due to some technological evolutions and innovations. What’s clear is that both the residential and commercial real estate sectors will emerge from the crisis looking quite different than their pre-pandemic selves.
The situation has revolutionized home buying by getting everyone acquainted with the tools that will likely power digital home sales well into the 21st century. It has also put real-time data and control of commercial buildings needed to operate safely in a post-pandemic environment into the hands of building owners and operators. In the process, both markets have become more resilient and efficient. And although none of it has happened in a way that anyone predicted, both evolutions will pay lasting dividends to everyone involved.