More than $3.9 billion in pandemic relief loans have been issued to single-employee real estate entities, according to a new report. Nearly 80% of this amount has been forgiven.
Some agents who have thrived financially during the pandemic have also had tens of thousands of dollars in COVID-19 relief loans forgiven, according to a new report.
Real estate entities that said they had just one employee have received $3.9 billion in loans through the Paycheck Protection Program, with nearly 80% of that already forgiven, according to a new report this week by NBC News.
While the typical loan was small — just $13,000 on average — 146 property companies received at least $90,000 each, the government’s Pandemic Response Accountability Committee reports.
And some of those canceled funds went to agents who likely earned six or seven figures in real estate sales commissions, NBC News found.
To all appearances, these loans were granted and canceled in accordance with the law.
These forgivable PPP loans were intended to help businesses that would have otherwise struggled to maintain their payrolls in a disastrous pandemic business climate.
But a few weeks after the closings, the real estate recovery was already in full swing. Historically low mortgage rates have led to a prolonged rise in housing demand, pushing transactions and selling prices to new highs.
Using data from Zillow, NBC News took a look at Santa Barbara luxury agent Gary Goldberg. The year before the pandemic hit American shores, Goldberg sold $31 million worth of homes. That number dropped to $27 million in 2020, then jumped to $82 million in 2021.
Goldberg’s single-employee operation also received $95,832 during that time, NBC News reports. Under the program, he met the eligibility criteria and did not have to repay the loans.
Goldberg declined to comment on their story.
For many agents who received PPP loans, the early weeks of the pandemic represented real uncertainty about the future, Erin Stackley of the National Association of Realtors told NBC News.
Stackley defended these officers, most of whom received relatively small loans from the program.
The program was intended to be lenient to businesses requesting loan forgiveness. Agents who received the money in good faith and followed the guidelines of the law were doing “what the SBA and Congress intended to do,” said Stackley, NAR’s senior policy representative for trade issues.
But it wasn’t long before the real estate market began to recover.
While open houses stalled in March and April 2020, they had begun a rapid rebound in many parts of the country as early as May of that year, NBC News reports.
The boom in the housing market in the months that followed also increased the pool of commissions available to real estate agents, according to the report.
Real Trends partner Steve Murray told the news agency that even in the first year of the pandemic, commissions increased year on year. Commissions rose from $76 billion in 2019 to $86 billion the following year. In 2021, they reached nearly $99 billion, he said.
At least one agent who received a PPP loan said she was uncomfortable asking for loan forgiveness after having a successful year.
Austin agent Phyllis Patek received an $83,300 loan in 2020, a year she sold $10 million worth of homes. Almost half of that loan has been canceled, according to government records.
She told NBC News she also intends to repay the remainder.
“I’m almost done paying,” she told the news agency. “It ended up being a crazy year because I’m in Austin and I didn’t feel right asking for forgiveness.”
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