For decades, the name Alain Pinel has been synonymous with Silicon Valley's booming real estate scene. The French former journalist cemented his name in the industry in 1990 as the founding CEO and president of the luxury brokerage firm Alain Pinel Realtors.
The firm eventually grew into a Peninsula powerhouse and was among the nation's top 10 brokerage firms when it consolidated with New York startup Compass in March 2019.
During his 46 years in the industry, Pinel has launched and led several real estate companies around the world. In May, he is set to release "Real Estate Behind the Scenes — Games People Play," a business guide based on his years of experience in the international and national markets.
When he penned his book, Pinel said he thought he had seen it all — until now. He spoke with the Weekly on Tuesday to share his perspective on the coronavirus pandemic and its potential impacts on the market.
Palo Alto Weekly: Have you ever experienced anything that compares to the current situation that's going on with the coronavirus pandemic?
Alain Pinel: Never, not even close. Today, everybody, everywhere is concerned and in the dark. Uncertainty and apprehension are freezing major decisions, including buying and selling homes. There is little or no visibility on the horizon, so we all stand on the side of the road, waiting for something we don't even know and have very little control over.
Weekly: How do you think this is going to impact the local market?
AP: In our business, the wait-and-see attitude will unquestionably slow the activity and soften the prices. I don't know if, overall, prices will go down, but I know that they will not go up until the horizon clears up.
The market will pause, just like we all will because of new market dynamics and also in the name of basic security. Open houses are going to be rare or go away altogether for a while. MLS (Multiple Listing Service) tours of properties new to the market will probably follow the same path. Previewing or showing properties will be a serious challenge. Professionals are also human beings; they have the same questions as their clients, and they don't have more answers.
Weekly: How does this compare to the dot-com crash in the early 2000s?
AP: We knew back then that tomorrow would be another and better day. When the bubble burst, property values crashed 25% or more overnight, so to speak, in Silicon Valley. The fall precipitated the closure of some businesses, the loss of many jobs and the loss of those IPOs' millions of dollars that lots of tech employees had filled their pockets with during the previous two years or so … but nobody died then or got sick without knowing what hit them. Big difference. We'll take health and life over money any time.
Weekly: With the low interest rates, is now a good time to buy a house?
AP: In any market, good, bad or ugly, there are buyers and sellers. The market is always good for someone. With more affordability, more negotiable terms and cheap mortgage money, some buyers will do very well indeed.
Weekly: Do you think the declining stock market is going to have greater impacts on Silicon Valley's market, where tech workers often sell stock to accumulate down payments?
AP: I don't. More and more people will work from home and receive their checks as usual. Technology has never been more essential. It may very well prove to be the solution rather than a problem.
Weekly: You were among the earliest real estate leaders to incorporate technology into the home-buying process. How do you think technology is going to be leveraged in this new era of social distancing?
AP: Social media, for the good or for the bad, is now a communication medium far more common than a chat on the porch with a glass of wine. If nothing else, this concrete way of "social distancing" will further grow. No risk of contamination.
If you are interested …
Alain Pinel's "Real Estate Behind the Scenes — Games People Play" is set for release on May 1. A copy of the book can be pre-ordered on Amazon.com.
The book represents Pinel's take on all aspects of the real estate business and gives readers an expert look at industry strategies, tactics, challenges and controversies.
Pinel said lots of books have been written on the art of salesmanship, but he wanted to take a deep dive into the values and culture of the industry.
"Over the years, I got to wear different hats from sales associate to CEO," he said. "I figured that I finally knew enough about the business to tell all the pros out there what not to do, what to do."