Happy Tuesday everyone.

I had an amazing conversation with one of my good friends last week. A Fraternity Brother and one of my Groomsmen in our Wedding, my buddy lives in LA and is in the entertainment business; so about as different a world as what I live on a day to day basis. It was a great conversation, he and his wife just had a baby, so they’ve been Quarantining with a NEWBORN as well as a 3 year old; tough times. He wanted to know how things were going, wanted my opinion on the economy, and where I think things are going to go, but mostly just a great time to catch up. I happened to be in the office for a bit, which surprised him. He also asked why we were able to work. I talked with him about it, and it really made me start putting together exactly how important it is what we are doing. Why is my industry considered Essential? That’s the blog today!

Why are we essential? Many people look at our industry and see a bunch of sales people. “You’re in Sales, you’re NOT Essential.” “No one NEEDS to buy a home during this time, why are you still working?” While some of this is true, other parts really need to be looked at deeper.

Real Estate has been, and always will be, an extension of investment, and a HUGE part of our assets as humans, corporations, etc. In this country, if you don’t own your home, condo, townhome, someone ELSE does. Not the government (for the most part), but someone, or some entity. We are talking about TRILLIONS of dollars of assets that are not stagnant. They do not sit idly. People buy and sell Real Estate as they Buy or Sell Stocks. We may be less liquid than the stock market is, but we’re worth a whole lot more! And not only are we worth more; when was the last time you were able to shelter yourself using a digital stock certificate?

The numbers are staggering when you look at them. According to some of the most recent stats I was able to find on the interwebs, the Market Capitalization (Cap) for the S&P 500 is right about 22 Trillion. That’s $22,000,000,000,000! That is a lot of Zeros. What is Market Cap? Take a stock, say Apple. Apple is currently trading at about $283 per share right now, and there are 4.4 Billion Shares! Multiply the number of Shares by the price per share, and you get the Market Cap, which for Apple, is right about $1.27 TRILLION Apple is one of, if not the largest companies, by Market Cap, in the world. It’s HUGE. Depending on the day and the trading price, the top couple shift. But three companies, Apple, Amazon, and Microsoft, each have a Market Cap over $1 Trillion. Trailing behind, but not far, is Google, at about $900 Billion, then we see a fall-off. I say fall-off somewhat tongue in cheek, because many companies are still worth Billions and Billions of Dollars. In the United States alone, each of the Top 50 Publicly Traded Companies is worth more than $100 Billion.

So we mentioned that the S&P 500 has a total Market Cap of $22 Trillion. Could you imagine if those companies, and that value, just vanished? That’s a lot of money. An unimaginable amount of money. Let’s now compare it to Real Estate. According to the National Association of Real Estate Investment Trusts (NAREIT), the estimated value of all COMMERCIAL holdings in the United States is roughly $15 TRILLION! That’s right, commercial buildings alone are valued at close to what the S&P 500 is. Crazy right? If you think that’s high, what do you think Residential Real Estate is valued at?

In their most recent market report, Zillow has placed an estimate of market value for Residential Real Estate for the United States at $33.8 TRILLION! You read that right… $33,800,000,000,000! Put that number together with Commercial Real Estate, and you have a total Market Value of just a tad under $50 Trillion Dollars!

This is why our business is considered Essential. Because for every dollar that is invested in the largest US Companies, more than $2 is invested in some type of Real Estate. The numbers do not lie. Real Estate is the biggest form of investment in the United States, and MOST of it is in Housing. So, while we have a Pandemic, things do need to continue. The Stock Market, as much of a roller coaster as it is, has not shut down. It’s open for business, because our financial markets are important to our economy. Heck, our financial markets ARE OUR economy. Removing the ability to buy/sell/exchange close to $50 Trillion in Assets simply, positively, can not happen, not if we want to try and get out of this battle against an invisible enemy.

With close to $50,000,000,000,000 at stake, professionals need to do our jobs. We are entrusted with helping our economy move forward. But we NEED to be doing it better, smarter, and more efficiently than before. We need to protect ourselves, and our clients, but also push to keep the economy moving. This is why MANY of us have shifted how we do our business. We’re spending MORE time qualifying our buyers. We are spending MORE time and resources to make sure our Listings look good, and have virtual capabilities. We are making sure that homes are CLEAN, and making sure we know who are buyers are before showing them homes. These are all GOOD things for the market in general, whether or not we are in the middle of a Pandemic. Learning to work better is the best way to survive and thrive. There are Realtors that do not know how to shift, that will NOT know how to operate in this new normal market. Thats unfortunate, but it’s also life. We’ve all learned to shift how we live our lives; if we can’t shift how we learn to do business, no one is going to wait for that person to catch up. We are all moving on, and moving forward.

So, from a purely economical standpoint, this is why Real Estate, and the affiliated businesses are Essential, and why we are here, making things work, to do our part to keep things moving. Tomorrow, I’ll spend more time talking about Residential Real Estate, which of course, is where we excel. Tune in tomorrow for part 2!

-GZ