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A Tough Sell Digital home tours. Fevered bidding wars. Rock-bottom interest rates. Empty office buildings. Real estate experts Mitch Roschelle ’83 and David Missirian explore whether the pandemic will unpack permanent change for the industry. INTERVIEW BY KRISTEN WALSH The real estate business adapted to COVID-19 by digitizing buying and selling. H as it done enough? Mitch Roschelle: Real estate has been an analog business in a digital world for a long time. This period has gotten industry leaders to realize the value of digital in terms of how space is used, how they keep track of people and space, and how they determine space utilization. The user experience for commercial real estate and for residential real estate — all of that will change permanently and perhaps for the better. David Missirian: From a legal perspective,
the industry doesn’t like change and traditionally lags behind society. Even during the pandemic, our solution of what to do with the courts was to close them down and require people to mail documents. There’s a balance that has to be struck between efficiency and keeping the system safe. Legal documents need to be private and protected. With paper, it’s easier because there’s only one copy. If we use digital means, it’s easy for a sophisticated hacker to destroy things. When that happens, we have a huge issue.
10 | SUMMER 2021
MR: It costs banks a lot to invest in
technology to enable digital transactions — not just the bank itself, but the entire chain of custody of that mortgage loan. Residential mortgage closings and transactions are strong candidates for blockchain, for example, but that would wipe out an entire industry of title closers who make their money showing up at closings with paper documents for people to sign. There’s a lot of resistance to adopting technology in this industry because there are always analog businesses involved. DM: Another issue is that the real estate industry has different rules in every state and even from county to county. So adopting a universal closing system would be a tough sell.
Which changes in the real estate market have surprised you? MR: The falloff in the supply of homes for sale. It’s been staggering. I never anticipated this outsized demand for homes. Now we are in a vicious cycle: People won’t sell their homes because they don’t know if they’ll be able to buy something, because there’s nothing on the market. Part of that is low interest rates and part is cabin fever during the pandemic. In commercial real estate, what surprised me is the number of office tenants in cities who are putting a lot of their space on the market for sublease. They are going to need that space when employees return to the office.
