Real Estate

Dot-com crash 'not even close' to what's happening now

A Q&A with real estate legend Alain Pinel

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?

What's local journalism worth to you?

Support Palo Alto Online for as little as $5/month.

Learn more

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?

Stay informed

Get daily headlines sent straight to your inbox.

Sign up

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."

Craving a new voice in Peninsula dining?

Sign up for the Peninsula Foodist newsletter.

Sign up now

Follow Palo Alto Online and the Palo Alto Weekly on Twitter @paloaltoweekly and Facebook for breaking news, local events, photos, videos and more.

Dot-com crash 'not even close' to what's happening now

A Q&A with real estate legend Alain Pinel

by / Palo Alto Weekly

Uploaded: Thu, Mar 19, 2020, 7:00 pm

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."

Comments

Fatty no longer
Barron Park
on Apr 18, 2020 at 4:50 pm
Fatty no longer, Barron Park
on Apr 18, 2020 at 4:50 pm
Like this comment

I think social distancing will even out the real estate market. No longer prestige neighborhoods because people cant mix in them.
Why bother paying 20 times the price, if you cant have folk over to show off your home to. We all just need a safe environment and a good internet connection.


Jenna
Another Palo Alto neighborhood
on Apr 18, 2020 at 5:02 pm
Jenna, Another Palo Alto neighborhood
on Apr 18, 2020 at 5:02 pm
4 people like this

I guess our Gov. has no appreciation for the quaint downtowns like we have in PA, and Mt.View, Willow Glen, etc. He may take notice when property values steeply decline due to the ghost towns that no one will want to live next to. He is beyond foolish for not being proactive to save our downtowns and all the small businesses, let alone all the dentist office, doctor office tax revenue those TRUE ESSENTIAL businesses provide. Hope he opens up CA ASAP


Anon
Another Palo Alto neighborhood
on Apr 18, 2020 at 5:30 pm
Anon, Another Palo Alto neighborhood
on Apr 18, 2020 at 5:30 pm
12 people like this

Posted by Jenna, a resident of Another Palo Alto neighborhood

>> He is beyond foolish for not being proactive to save our downtowns and all the small businesses, let alone all the dentist office, doctor office tax revenue those TRUE ESSENTIAL businesses provide. Hope he opens up CA ASAP

We're not sheltering in place for fun. We are sheltering in place because this virus is particularly contagious, and dangerous. That isn't the fault of the governor, or any governor, or the President. It is a very dangerous virus. We don't want high-contact businesses to open up, and we can't handle returning to the old high-contact social norms until we get everybody vaccinated-- after we develop a vaccine, which people are working very, very diligently on. The problem we are up against isn't the governor, the problem is a highly contagious virus.

What should government(s), and, landlords, do regarding small, independent businesses? I don't think there is one answer.


Jenna
Another Palo Alto neighborhood
on Apr 18, 2020 at 6:08 pm
Jenna, Another Palo Alto neighborhood
on Apr 18, 2020 at 6:08 pm
6 people like this

[Portion removed.] There are lots of Low Risk businesses that can begin to open now...especially with mask protocol and social distancing.


@Jenna
Mountain View
on Apr 18, 2020 at 6:45 pm
@Jenna, Mountain View
on Apr 18, 2020 at 6:45 pm
12 people like this

We should lift shelter in place now? Why? We're not even close to the peak number of cases in Santa Clara County yet. And unless there are enough test kits available to do an actual screening program, lifting restrictions will only increase the number of COVID-19 cases -- and deaths.

[Portion removed.]


Jenna
Another Palo Alto neighborhood
on Apr 18, 2020 at 7:00 pm
Jenna, Another Palo Alto neighborhood
on Apr 18, 2020 at 7:00 pm
1 person likes this

[Post removed.]


Anon
Another Palo Alto neighborhood
on Apr 18, 2020 at 7:12 pm
Anon, Another Palo Alto neighborhood
on Apr 18, 2020 at 7:12 pm
6 people like this

Posted by Jenna, a resident of Another Palo Alto neighborhood

>> Anon stop the fear mongering

Fear mongering? As of yesterday morning, -at least- 33,288 people in the U.S. died from the virus. Web Link.


@Jenna
Mountain View
on Apr 18, 2020 at 7:14 pm
@Jenna, Mountain View
on Apr 18, 2020 at 7:14 pm
2 people like this

[Post removed.]


Susan
Midtown
on Apr 18, 2020 at 7:18 pm
Susan, Midtown
on Apr 18, 2020 at 7:18 pm
6 people like this

Given that the mortality rate is much lower than originally thought for those without comorbidity issues, I don't see why we cannot begin to open up business for most people, while still employing social distancing and masks and general hygiene, etc. At the same time those who are at greater risk continue to shelter in place and avoid visitors (including grandkids, etc.). I am 70 years old, and I would continue to shelter in place. But our economy simply cannot continue to be paralyzed.


Jenns
Another Palo Alto neighborhood
on Apr 18, 2020 at 7:30 pm
Jenns, Another Palo Alto neighborhood
on Apr 18, 2020 at 7:30 pm
3 people like this

[Post removed.]


Jenna
Another Palo Alto neighborhood
on Apr 18, 2020 at 8:34 pm
Jenna, Another Palo Alto neighborhood
on Apr 18, 2020 at 8:34 pm
2 people like this

[Post removed.]


@Jenna
Mountain View
on Apr 18, 2020 at 8:44 pm
@Jenna, Mountain View
on Apr 18, 2020 at 8:44 pm
14 people like this

[Post removed.]


Anon
Another Palo Alto neighborhood
on Apr 19, 2020 at 11:46 am
Anon, Another Palo Alto neighborhood
on Apr 19, 2020 at 11:46 am
Like this comment

I strongly encourage "deniers" to look at this web page, particularly, the graphs at the bottom which are set to look at rates (per population).

Web Link

Compare New York and California. This has been a mass-casualty emergency in urban metropolitan New York City (including New Jersey, etc.). Absolutely devastating. Don't tell me that it is worth risking that here just so we can keep restaurants and bars open for business. On April 7th, the death toll from COVID-19 in NYC topped that of 9/11. Since then, the death toll has climbed, with a confirmed death toll of 8,811, and 4,429 more "probable" (died of same symptoms but no test done). 13,240 people. I'm OK with keeping social distancing in place as long as it makes sense.


Insane
Mountain View
on Apr 19, 2020 at 12:00 pm
Insane, Mountain View
on Apr 19, 2020 at 12:00 pm
3 people like this

@Anon I absolutely agree that we need to continue best social distancing etc. but can you explain why it’s OK for Diddams, a party supply store, can stay open while SummerWinds, a place we can buy plants and seeds to grow our own fruits and vegetables, is not allowed to have pickup orders?

It is INSANE. Complete and total lack of common sense.


S_mom
Community Center
on Apr 19, 2020 at 12:45 pm
S_mom, Community Center
on Apr 19, 2020 at 12:45 pm
Like this comment

I hope that after May 3 the new shelter in place orders bring more nuance. Construction, yard maintenance, and other outdoor-based employment should be allowed to resume with proper protective procedures. People should be allowed back into open spaces (including our own neighborhood parks!) as long as they are not gathering with other households. Even retail could be opened back up I think if they limited the number of people inside based on the square footage, and required masks and encouraged no contact sales where possible.

I agree we shouldn't be allowing gatherings in large numbers or longer-term indoor activity (like movie theaters or seated dining in restaurants). But I just think given how low our numbers are (am I reading right that Palo Alto had one new confirmed case of coronavirus last week?) we should be considering some measures that promote the economy and well-being of our citizens, rather than doing exactly what we are now. Really, as strange as it sounds I think we should be aiming for a little more hospital utilization (given that having people catch the virus eventually is unavoidable unless we stay inside for 18 months) so that we don't draw out the amount of time we have to stay at home and cause these terrible economic outcomes. I don't know if this is the right move for the whole county, but I think Palo Alto's numbers justify opening up a bit.


Anon
Another Palo Alto neighborhood
on Apr 19, 2020 at 12:47 pm
Anon, Another Palo Alto neighborhood
on Apr 19, 2020 at 12:47 pm
Like this comment

Posted by Insane, a resident of Mountain View

>> can you explain why it’s OK for Diddams, a party supply store, can stay open

No, I cannot explain that.

>> while SummerWinds, a place we can buy plants and seeds to grow our own fruits and vegetables, is not allowed to have pickup orders?

I can't explain that, either, but, I wouldn't lump the two cases together. I would expect that any such order that we have had will have some irrationalities and inconsistencies. I could mention more, myself. I can only say that the situation really was an emergency, and, ill-considered things always happen in emergencies. People are fallible.

I never shop at Diddams, anyway, myself, so it will be easy for me to avoid contracting coronavirus there. I also agree that it makes sense for open-air nurseries to stay open.

Coronavirus is transmissible via a salt shaker, Web Link , so, any contact during the process of commerce can be a risk. I don't envy the public health folks who have to decide what to allow open.


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Not sure?