Ups and downs are a natural part of the business cycle. Supply and demand can only be out of balance for so long before something must change. That’s where we are today—in a shifting market. The boom of the past few years is slowing, and we’re transitioning to a more normal environment.
Some worry we’re in a housing bubble like 2008, all set for a similar burst and the subsequent fallout; we’re not. We’re in a markedly different situation for three primary reasons. First, homeowners are experiencing the highest amount of equity in their homes than any time in recent history. Second, most mortgage loans have been underwritten and approved using strict calculations for ability to repay—a factor that wasn’t required prior to the 2008 housing bubble. Last, most homeowners have low-risk fixed-rate mortgages, instead of the many exotic programs prevalent in the 2000s that allowed borrowers to buy now but required to pay more in the future.
Many experts also worry about real estate businesses being able to operate in a more normalized housing market, versus the robust market of the past couple of years, and rightfully so. The real estate industry is over a decade into an expansion—that’s double the time in which a correction usually occurs. During this time, the housing industry has had many new entrants, often referred to as disruptors. These new players have struggled to prove viable even during the past couple years. They have never operated in a more normalized market, let alone shown an ability to survive a downturn. That shift is happening now, and the real estate landscape is changing.
Operating in a fiscally responsible and disciplined manner—as Long & Foster has done throughout its history—is how a company stays strong, stable and secure. In the more than 50 years that Long & Foster has been in business, we have learned how to survive—and thrive—in recessions and booms, in sellers’ markets and in buyers’ markets. We’ve done that through strategic planning and innovation—a prime example of which is our all-inclusive business model, a diversified approach to real estate that not only strengthens our business, but also even better supports our clients.
Working with Long & Foster agents, consumers have access to all the services needed to buy, sell, rent, own and invest in properties—real estate, mortgage, title, insurance, property management, inspection, moving, even vacation rentals. People want the convenience and simplicity of an all-in-one experience, and we deliver. In a shifting market like ours, the strength and stability that our diversified and all-inclusive approach brings, truly stands out.