Philip White, a 39-year real estate industry veteran, has been CEO and president of Sotheby’s International Realty for the past seven years, but his tenure at SIR began in 2004, when he started as COO.

Since then, he’s helped it grow to nearly 1,000 offices across 70 countries. “Our goal was to be in every major metropolitan market in the U.S., and ultimately every capital market globally,” he says.

First, the company focused on the Tristate area of New York, New Jersey, and Connecticut, “because those populous places have high-end homes, wealthy people, and they’re feeder markets. That was our immediate strategy, and we’ve expanded beyond that also to secondary markets.”  

The key, he says, was protecting the brand “because it’s a 275-year-old brand. It’s about expanding and not diluting it.”

The strategy going forward involves helping Sotheby’s International Real Estate affiliates acquire other local brokerages.

In early March, the company announced that its affiliated brokers and sales professionals achieved more than $114 billion in global sales volume in 2019, the highest annual U.S. sales volume performance in the brand’s history. Of that, $102 billion was achieved in the U.S., marking another record accomplishment for the brand.

Now, 2020 provides new challenges. But White, who led his company during the housing crash of 2008, may be particularly adept at handling this one.

“The high-end part of residential real estate helped rebound the rest of the market after the meltdown of Lehman Brothers. Generally, 2008-09 were the hardest hit years, but for the high-end market it was less than a year before things got better. Prices corrected dramatically. On the higher end, people still had money and were able to get some really great deals, and that ultimately pulled the market out.”

We checked in with White to discuss his expectations for the current downturn and much more.

PENTA: Obviously, the world’s turned upside down in the last few weeks. How do real estate brokers keep up with the changing times? Philip White: 

First, stay informed—as the situation is rapidly evolving, it’s important to follow the government and CDC’s (Centers for Disease Control and Prevention) guidance on what is safe. The more we support social distancing, the faster this will be behind us.

Second, embrace technology and leverage the time they’re working from home to learn new skill sets. Business is still happening as brokers leverage virtual solutions. Brokers are hosting virtual open houses and home tours on social media, helping clients de-clutter and prepare their homes for sale using video messaging, FaceTime, virtual staging technology, and other inventive solutions.

Are there lessons the real estate industry has learned from 2008 that can help with what’s going on now?

There is no playbook for this situation. The biggest difference between 2008 and today is inventory. During the financial crisis, there were more homes for sale that helped to depress prices. Today, there is much lower inventory in many markets.   

Additionally, those who endured the financial crisis in 2008 had to adopt a growth mindset and learn new segments of the business as foreclosures, REOs [a term used to describe a class of property owned by a lender], and short sales became commonplace. Today, we need that same growth mindset to leverage technology and virtual tools to help our clients meet their needs while remaining safe. We’re continuing to see agents be creative and think of out-of-the-box tactics to keep business moving.

When this is all done, do you suspect buyers’ tastes will change?

I suspect it will, as the situation has proved to all of us that we can work from home more effectively than we ever thought possible. We are seeing some clients express interest in permanently relocating to resort or rural locations that were typically considered second-home markets. I suspect some buyers may remember working from their dining room table and prioritize homes with dedicated home offices or look for a home served by the fastest fiber-optic internet connections and other technological amenities.

Others, however, will remain incredibly loyal to their same neighborhoods. As we shelter in place, many of us have been reminded of how much our sense of home extends beyond our four walls to the coffee shops, restaurants, and farmers markets in our local communities. I know many, myself included, look forward to reconnecting with everyone that makes our individual communities so special.

How have luxury buyer tastes since you’ve been in the real estate industry?

I’ve seen them change many times. During the downturn, opportunistic buyers came out. They bought properties they never thought would come on the market, and they got properties in great locations for pretty good prices. They had the financial wherewithal to do that.

Along the way, we’ve seen more demand for design and architecture. There’s more of an interest in openness, and contemporary spaces. 

We’ve seen the redesign of kitchens and baths and the creation of spa baths and gyms, and large garages for car collectors. The yoga studio, all kinds of wellness attributes, are more important than ever. We see basketball courts inside the house that have evolved.

People, in general, are willing to sacrifice square footage for great design.

Any particular locations people are gravitating toward?

Florida is growing because of the weather, the lifestyle, and the fact that there’s no state income tax. In particular we’re seeing interest in Jacksonville, Fla., and a very small island called Boca Grande, and Destin, Fla., on the Gulf Coast. There’s a lot of construction going in on the water with really nice architecture. Naples is a very attractive market for the northeast. People buy their second homes and then ultimately move there permanently. Miami is still a draw with its great design, and beautiful projects going up.

Texas has emerging luxury markets—Dallas, Houston, San Antonio, Austin (lots of pretty new construction being built out there).

Then we have people moving to places like Boise, Idaho, and Reno, Nev., from California. Those are about taxes. 

Colorado is still very attractive to people—Denver, Boulder, and Colorado Springs. Also, ski areas—Vail, Steamboat, Breckenridge, Aspen, et cetera.

The Boston area, where the university system is second to none and there are major companies that operate out there because of the colleges, is also seeing a lot of growth.

What about internationally?

There are a number of countries that offer Golden Visa programs, like Portugal. For a reasonable investment, you can get a visa and also travel to so many other countries within the EU. Portugal also has a lot of Chinese buyers. Malta is another one, and Cyprus too. 

The Caribbean and the Bahamas are very international. The British Virgin Islands and the Bahamas attract Americans, Germans and Europeans. 

I was recently in Mallorca, since we sponsored a Rafa Nadal tournament there. That’s a very international place. They have four official languages.

Besides Covid-19, what are other factors affecting the real estate market?

We’re starting to see this huge transfer of wealth from the baby boomers to their children. That’s going to be a driver, and it may already be. They’re going to inherit money or their wealthy parents are going to transfer money to them, allowing them to move up the property ladder.

We’ll start to see the millennial buyer, once they start a family, buying more real estate. 

The millennial buyer who is so high tech doesn’t want to be a commuter, and technology allows them to work more remotely. Some of these suburban markets will be more attractive. They will get more for their money, and raise their children in a nicer environment. It’s about quality of life and seeking education for their children. They’ll get more for their money than in a place like New York City.

Originally published in April 27, 2020 by Lucy Cohen Blatter