In the Media

My areas of specialty are real estate, land use, and local government law. I’ve been teaching real estate since 2004, when I took a chance and applied for a teaching position at a local community college. It was a bit of a risk, but I ended up loving teaching and applying what I’ve learned in representing clients to the classroom.

Figuring out to what extent we will go back to a pre-COVID workplace model. I don’t think anyone thinks it will completely go back to the way it was, so the question is, to what extent will workers come back to the office? To the extent they come back to the office, will they work full-time in the office or mix it up with working from home?

I’ve recently seen statistics on weekly occupancy rates of commercial property in downtown cores in various metropolitan areas around the country. California has some of the lowest occupancy rates in the country. One can easily see this in downtown San Francisco, which sometimes feels a bit like a ghost town. California’s economy is disproportionately weighted toward technology companies, and technology companies have been some of the most enthusiastic to embrace a work-from-home model. California may be slower to see a return to work of office workers than other areas in the country.

One only has to look at occupancy rates of commercial property. What remains to be seen is just how lasting this change will be and to what extent it will continue. Commercial landlords will have to adapt to a new model whereby people spend more and more time splitting their work from home and from the office. There also may be a shift of some commercial properties to be used for other purposes, such as medical offices, government offices or even housing.

It’s been interesting to watch the commercial real estate market recover from the Great Recession of 2008, do very well during the teens and then completely be thrown for a loop by the pandemic. I don’t think I’ve ever seen in my professional career such a drastic change to commercial real estate as we’ve seen in the past three years. Interestingly, residential real estate was not negatively affected by the pandemic for the most part. That’s partly due to the fact that so many people were working from home, so there was much more demand for housing, which meant there was less demand for commercial real estate.

I don’t think we’ll ever see occupancy rates as high as they were pre-pandemic. But, I do think more and more people are going back to work in the office. But, that also may be industry-specific. In the technology industry, the return-to-work ratios will probably be lower than in other industries, such as law, finance and other fields. Landlords will need to be flexible and understand that the commercial real estate needs of past tenants will probably be less than before, and landlords need to be adaptable.

Be flexible. Recognize that companies may be looking for more flexible space, more space for hoteling. We don’t know yet to what extent employers and employees will want to go back to the old model of having private offices. The open workplace plan may be unappealing to those who continue to have concerns about future pandemics.

Ventilation is key. Additionally, open workplace plans will probably not be as attractive to employees as they were before (although it’s debatable whether they ever were attractive to employees.) I also think having workspace that can easily be partitioned in the event there is another pandemic would be useful.

Uncertainty. It seems like the Federal Reserve will probably ease up on raising interest rates, but I don’t see interest rates going down. Like the residential market, I expect the commercial market to cool off.

I don’t think commercial real estate has ever faced such an uncertain future. It will be interesting — and perhaps painful — to see how many downtown cores are hollowed out by the trend toward remote work. Cities will need to be flexible [in] how they use their downtowns.

I think the answer depends upon how secure the person is in their housing and whether it's owned or rented.

For example, if they live in a jurisdiction with rent control then they probably don't need to downsize since they already have some predictability with their rent. Similarly, if they live in a home where they are quite comfortable paying the mortgage, there's probably not a need to downsize. But that's not to say people don't need to downsize. Many of us end up paying way more than we need to for space that we don't need at all.

Downsizing in general only seems to be seriously considered by people who are empty-nesters and/or retiring. But it can make sense for lots of people to get rid of stuff, particular the stuff they keep with them in their living units.

I think that's too soon to tell. No one really knows the long-term effects of pandemics on the residential and commercial real estate market. If anything, it seems like there is an outflow of people from major metropolitan areas into smaller suburban and rural areas because it's so much easier than it used to be to work from home. And housing is cheaper per square foot in the areas people are moving to.

In recent years there has been this move to simplify things, organize, cleanout, etc. So I think there is renewed interest in making your life simple and getting rid of possessions to some extent. In terms of categories of big city homeowners, as noted above I think empty-nesters and retirees are the most likely to consider downsizing.

It all depends on location, location, location. Real estate markets, in general, are pretty hot everywhere in the country right now but some places are crazier than others. For example, there are many Sun Belt and Western cities that are experiencing an influx of migration from big urban centers such as the bay area and Los Angeles. Cities like Boise, Phoenix, Tucson, Denver, etc. are all seeing increases in prices due to this influx of West Coast buyers with lots of money.

Another variable is to see just how much work from home will stick with us when the pandemic is finally manageable or over. It remains to be seen whether companies will be as flexible with full-time work from home employees. Some employees have moved to much smaller locales under the assumption that they will be able to continue to work from home for the long term. Not all major employers may let them do so. Other markets that tend to be hot are vacation hotspots within a reasonable distance of major urban areas. For example, home prices in the Monterey and Lake Tahoe regions of California are experiencing substantial increases in real estate prices due to people who are looking to escape big city life but still be within a reasonable distance of their home office.

Factors that any buyer should consider would be the year-over-year increase in home prices since the start of the pandemic. Also because interest rates have stayed so low that is also fueling demand. If interest rates start to creep up, I think we will see demand cool to some extent.

As noted above, no one really knows for sure how much working from home and the zoom lifestyle will be with us for the long term. Most companies will probably become more flexible about people working from home, but whether they will allow their full-time employees to work remotely 100% of the time remains to be seen. I think the demand for real estate in areas of the country that withstood the pandemic strongly, like technology or warehouse distribution, will continue to remain strong as there is no sign that those fields will diminish in demand. In terms of the coming months, I see the housing market perhaps cooling off, especially since we are entering into the winter months where the market cools historically.

To some extent although that trend seems to be cooling somewhat, probably due to the pandemic. On the West Coast, there had been a huge amount of interest from buyers in China looking for a place to park assets outside of their own country. In the southern Florida area, there tends to be more interest from Latin America.

I think it is likely that they will raise rates modestly, especially if there are creeping signs of inflation. Obviously the more expensive it gets to borrow money the more of a negative effect that will have on the housing market. In the short term, however, there may be a rush of buyers who feel like interest rates are only going to go up for the foreseeable future so they might as well get in now even though rates are starting to creep up.

Housing affordability has become much more of a problem for millennials than it was for their parents' generation. Additionally, millennials are competing with older generations that have lots of equity built up due to the rapid increase in housing values over the past 20 years. I also think that millennials may be uncertain of their long-term future and where they want to live. For example, do they want to stay in central cities, do they want to move out to the suburbs like their parents did, etc.

Jobs, jobs, and jobs! Obviously quality job opportunities are the number one thing that affects the desirability of housing. There is a reason housing costs are so expensive in the bay area and in areas like New York. Other factors that matter do include weather, traffic patterns, and length of commute, recreational opportunities, and the existing population.

I do not see drastic changes either positively or negatively during the rest of the year. Changes in the pandemic could of course cause havoc, but assuming that the Delta surge does not get much worse, I think the real estate market will stay relatively stable. Additionally, if interest rates are hiked substantially that could have a negative impact on the market.

Besides obviously paying attention to the rent, one has to consider how far the proposed apartment is from any potential job site. People tend to overestimate their tolerance for long commutes to get a bigger place. Instead, people need to really understand what the day-to-day commute will be like. For obvious reasons, apartments near employment centers are worth more than those far away. Additionally, one has to look at the amenities offered by an apartment, such as access to common areas, view, a balcony, modern fixtures, etc. What matters to some tenants will not matter to others. Finally, I think COVID-19 has upset some of our normal assumptions about what makes an apartment attractive. For example in the San Francisco Bay area, some of the steepest drops in rental prices are in apartment complexes near major employment centers like Google, Facebook, etc. This is because so many high-tech companies appear to be adapting to remote working, and there may not be as much demand for people to live near high-tech campuses anymore. If the renter has children, then obviously the quality of school districts also matters.

As noted above, overestimating their tolerance for a long commute. I also think people should evaluate apartment communities much like as if they were buying the property. They should visit the community at various times of the day and on various days of the week to see if the apartment is subject to a lot of noise from parties, traffic patterns, etc. Also, I think some renters may overestimate the amount of space they need. It's amazing what can fit into a small place if you do some organizing ahead of time. Sometimes, like purchasers of new homes, we fall in love with the place before really evaluating whether it's the right thing for us. Whether you are a renter or a homebuyer, all of us fall prey to our emotions sometimes.

1. Job prospects.
2. Average commute time.
3. Dependence upon one or two industries (you don't want to move to an area that is effectively a company town).
4. Price per square foot.
5. Supply of housing.

The flexibility of the lease term. Given the uncertain job situation and the uncertain nature of the pandemic, as a renter, you want the ability to have some flexibility to move to other cities or to other jobs. Additionally, the pandemic may make some renters reluctant to live in dense housing out of concern over the contagiousness of the virus. But only time will tell the true impact of current conditions on the rental market since these times are so unusual.

That all depends upon the individual market, the amount of rental housing, and the amount of land available for future rental housing. It also depends upon why is the city growing so fast. Is it growing due to broad-based economic trends? Is it only due to one new employer? For example, Las Vegas has quite a bit of available rental housing, but the pandemic has hit tourist-dependent areas like Las Vegas hard.

This is much easier said than done! The most effective way to provide more affordable housing is to increase the amount of housing stock. You're starting to see many cities consider various policies to accomplish that. For example, San Jose has a streamlined process now for people to be able to build accessory dwelling units in the backyards of single-family homes. Additionally, some cities are considering changes to allow 2-4 units to be developed as a matter of right on single-family lots. Cities are also pursuing the construction of various forms of affordable housing, but that is a very expensive and complicated process. In particular, existing homeowners are resistant to change, typically. There is a budding YIMBY movement (yes in my backyard), but that is the exception rather than the rule. One thing cities have to try to figure out is parking. Many single-family homeowners are concerned about the decrease in available street parking if significant multifamily housing is developed. That problem will be tricky to address.

To some extent yes, but ultimately real estate is a customer service profession. There will always be a need for professionals to help unexperienced buyers and sellers walk through the process. Real estate is the most complicated and scary purchase people will make, so it's understandable that people will not want to rely solely on technology to walk them through that process.

On the other hand, real estate agents must adjust to new realities. Today's real estate consumers (both buyers and sellers) are much more informed than they ever were 30 years ago. Therefore, real estate agents no longer control information about the market, what homes are for sale, etc. Additionally sometimes potential clients get the wrong idea by doing research on sites such as Zillow or Trulia. These are websites that are helpful but often not accurate. It can sometimes be difficult for real estate agents to explain to potential clients why the information they find online isn't always accurate.

At a most basic level, save money! But also keep in touch with prior clients, and continue to develop relationships with people who may turn out to be future clients. Even though you may have professional contacts that are not financially able to conduct real estate transactions now that doesn't mean they won't be in the future. It's important to maintain relationships with previous clients so they don't feel like you are just using them to make money. Continuing to develop new professional networks is the best way to ensure future success. It takes perseverance to keep putting yourself out there while no income is coming in, but you have to keep yourself motivated and keep going. Self-confidence and a positive attitude are important, but also it's important to have savings to get yourself through lean times.

Don't spend a lot of money on advertising. The best way to develop business for yourself is to go out there and put yourself into the community and to develop networks that can lead to future business. So for example become active in community organizations, charities, religious institutions, etc. The more people you meet the more likely it is that you will develop future clients. Almost everyone who is searching for a real estate agent does not select a real estate agent based upon an add on the back of the bus or the newspaper. They ask friends for referrals. So developing relationships of trust with people helps you develop your own referral network.

Finally, any new agent should realistically expect to not make any money for approximately six months. So they should have at least six months of living expenses set aside to get them through the time it will take to develop relationships and future business contacts.

If your are asking about career opportunities, that's a tough one. On the one hand you might think the cities with the highest home values (areas like New York, San Francisco, Seattle, LA, Silicon Valley) would be the best because the commissions will be much, much higher given the real estate values. However nothing attracts competition like lots of money and there are many, many agents trying to get a piece of the action of these areas. Additionally, because the cost of living is so high in such areas, it can be difficult for you to start out if you don't have a lot of living expenses in the bank. Therefore, it may be more difficult to develop clients.

What I would look for is how saturated is the market? If there are many, many real estate agents it's going to be hard to set yourself apart. Working in cities where there is less competition is a way for you to develop your own network. But you may want to start out where you live because that's where you have the most networks from either growing up there or from working in the area. I don't think one city is much better than another in terms of real estate opportunities, it often depends upon your own circumstances.

I think because of the election there's a lot of uncertainty now about how the market is going to behave. I think eventually the Fed will raise interest rates, particularly if the economic indicators continue to remain the same as they are or improve slightly. It will depend upon the strength of the economy and inflationary pressures. But I think everything is on hold probably for another six months until the Fed sees how the market reacts to the Trump administration.

The Fed has been sending out many indications for over a year that they would like to raise interest rates but they are a little hesitant to do so. Once interest rates are raised it will definitely have an impact on the real estate market because nothing affects the affordability of homes like financing. Real estate agents today should anticipate that the market will cool off, but how much depends upon the market in which you are operating. There's a big difference between Silicon Valley and rural North Dakota real estate markets.

I am a real estate attorney and a faculty member at West Valley College. I am the Chair of the College’s Real Estate Program. My mother was a real estate broker while I was growing up and my brother-in-law is a commercial real estate broker in Southern California. I’ve long had an interest in real estate-related matters and, while getting my law degree, I also obtained a Master’s degree in City and Regional Planning from UC Berkeley. I graduated from both law school and planning school in 1999. I worked full-time in San Francisco for a major law firm, handling matters involving real estate and public agency law. I’ve been teaching since 2004 and have been Of Counsel with the law firm of Colantuono, Highsmith, and Whatley since 2005.

It’s going to be very interesting to see how much demand there is for commercial real estate after the pandemic is over. So many companies and workers have adapted to working from home. I think there will be less demand for commercial real estate space, but it’s not clear yet how much less demand there will be. Additionally, I think the era of the open workplace will be greatly reduced due to the need for social distancing and increased hygiene practices.

The price of land in California. In the major urban centers of California — the Bay Area, Los Angeles, and San Diego — there is very little available land to develop within reasonable commute times of existing employment centres. We are seeing increasing interest in multi-story commercial developments in places that had originally been primarily suburban. For example, downtown San Jose has seen more commercial development activity in the past 5 to 10 years than it had seen since the 1960s.

Until “shelter-in-place,” the commercial real estate industry has been quite healthy, with a lot of development activity throughout the major urban centres. In terms of the profession, we have seen the CRE industry become a little bit less of an old boys’ network, with more women going into the field. Commercial real estate, however, still has a diversity problem.

Given there is so much we don’t know about COVID-19, it’s hard to say what will happen with CRE. There is still quite a bit of commercial real estate being built, but I wonder about projects that have yet to be funded. I would expect developers will be a bit more hesitant to seek funding for future projects. It probably makes sense to wait and see how much demand there will be and how the pandemic will affect how future office space is set up.

It takes a while to develop business in commercial real estate. Anyone who is contemplating entering the field should have some money set aside to live on while they pursue establishing themselves. Additionally, networking is extremely important in developing a book of business.

I think the market is and will be extremely stagnant. I don’t see the commercial market getting back to normal until there is a vaccine.

Like in residential real estate, I think most people in commercial real estate get their business through personal connections and not through online advertising. In general, when people are looking for real estate professionals, they ask their own networks for referrals. Additionally, it’s important for people to feel like they have a personal connection to a real estate professional, and you can’t really gather that from looking at an ad. On the other hand, it is crucial for any real estate professional to have a strong online presence and familiarity with the latest in web-based technologies because your customers will expect that.

I think the CRE market will be changed more by COVID-19 than any other phenomenon in my lifetime. The problem is, we don’t know exactly how it will be changed.