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Peter Hunt discusses The State of Real Estate

A lot of homeowners are, at this very moment, wondering how they are going to pay their mortgages, now that they find themselves jobless. Because of that foreboding scenario, I began wondering how the residential home sales market was holding up. So I called up Peter Hunt, President and CEO, HUNT Real Estate Corporation, to ask him how this “new world market place” was treating his company.

I was surprised to hear that at the end of March, HUNT’s business was only off by 5% from last year, over all six of its coverage regions, from Arizona to Buffalo. “Yes, it’s a scary time, but we have seen no appreciable slowdown,” Peter told me. “People still want to buy and sell – they might be a little more cautious, but everyone is still figuring out how to do business. At the same time, April is going to be interesting.”

As much as Peter had an overall positive outlook on his company’s business dealings thus far, he said that he was more concerned about the mortgage market. He mentioned that he was aware that a lot of people were closing on their mortgages, and then not making their initial mortgage payments. He said that this is a national trend that no one is really talking about. People are buying the houses and then just assuming that due to the pandemic they don’t need to make their payments. They have a “who is really going to care?” attitude.

“These mortgages are immediately going into default,” Peter warned. “When people don’t make their payment (residential or commercial), the servicer (the bank, for example) must make the payment to the bond holder, unless it’s a portfolio loan. The servicers are going to get hammered, and the feds are going to have to step up – if the bonds go into default, it’s not good news for anyone. If the feds don’t provide liquidity to the servicers, they will lose a fortune; this is going to be a major league problem.”

The layperson in all of this, aka the average Joe, is not taking into consideration the chain reaction that would ensue. Peter explained that one of the resulting factors in all of this is that Hunt’s (the third largest mortgage bank) investors will ultimately demand higher and higher credit scores in order to justify issuing the loans. That would of course slow down real estate sales, which unfortunately would have an adverse effect on legitimate prospective buyers who would have otherwise qualified for the loans.

Moving away from the ledge, I asked Peter how his day to day business handlings were going, despite the current conditions. He told me that his team began to implement a process a few years ago that would allow them to seamlessly work via a virtual platform. Realtors can list a house, show it, negotiate, and write a contract, virtually. The final (real life) walkthrough takes place just before closing, when the house has been cleaned, and is vacant. A physical inspection also occurs, ensuring that everything is up to speed with the listing.

“Prospective buyers have access to a host of data and online visual experiences,” Peter said. “We are discouraging direct contact between the buyer and the seller. There’s a whole new set of rules out there; three weeks ago it would have been hard to imagine that we would be doing business this way. But we’re adjusting – once a month Senior Advisors from all of our branches meet virtually. We share a lot of stories. We’re meeting with Branch Directors online much more frequently. We also do virtual training every single day. This is how we function in this new world. It’s like a virtual town hall – we communicate and listen to our people.”

When asked if this “virtual way of doing business” might eventually be the new norm, Peter did not hesitate to say, “People will want to return to human contact as quickly as possible. They want to experience a walk through… it’s the sensory part that you can not duplicate – it’s an emotionally rich experience. I am of the belief that a person knows within the first ten seconds of walking into a house whether he or she wants it or not. Ten seconds makes or breaks a deal.”

Peter told me that his biggest takeaway from all of this is that “his people” want to continue to work and help clients. “They are educating them in a new way, which is not easy.”

I’ll be checking back with Peter in the near future (about a month’s time, which should prove enlightening), as the world continues to adjust to doing business in virtual settings. It will also be interesting to see just how rapidly we are heading towards another mortgage crisis, and if the federal government has any plans to avoid the disaster scenario. 

Written by queenseyes


Newell Nussbaumer is 'queenseyes' - Eyes of the Queen City and Founder of Buffalo Rising. Co-founder Elmwood Avenue Festival of the Arts. Co-founder Powder Keg Festival that built the world's largest ice maze (Guinness Book of World Records). Instigator behind Emerald Beach at the Erie Basin Marina. Co-created Flurrious! winter festival. Co-creator of Rusty Chain Beer. Instigator behind Saturday Artisan Market (SAM) at Canalside, Buffalo Porchfest, and Paint vs. Paint. Founder of The Peddler retro and vintage market on Elmwood. Instigator behind Liberty Hound @ Canalside. Throws The Witches Ball at Statler City, the Hertel Alley Street Art Festival, and The Flutterby Festival.

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