Originally Published in Long & Foster’s Luxury Homes Magazine
Long & Foster Real Estate Presidents Boomer Foster and Gary Scott sat down with Long & Foster’s Luxury Homes Magazine to share their reflections on the real estate market during the coronavirus pandemic.
Here’s a recap that conversation. You can read this article plus other exclusive insights and features from our team at longandfoster.com/luxmag.
Tell us how the real estate market has been affected by COVID-19.
Scott: There’s still demand for housing, although some consumers have hit the pause button on purchasing or selling a home. Anytime there’s a drop in the stock market, people’s confidence wavers and that puts a halt to real estate transactions. With the pandemic, it’s natural for people to wait on a housing decision, but the demand has not gone away.
Are you seeing any impact on lending?
Scott: It varies across the industry. Some mortgage companies have closed their doors and others have greatly restricted their lending policies. Our partners at Prosperity Home Mortgage, LLC, remain as strong as ever. They still offer most loan products available in today’s market. Although mortgage guidelines are changing, conditions are favorable for qualified buyers and interest rates remain low.
How does that compare to what happened in 2008?
Scott: Many people relate today’s situation to 2008, but they’re different. The 2008 recession was caused by easy access to mortgage credit, with risky products like interest-only and balloon loans fueling the crisis. The housing market has been in a much healthier place in recent years, and in fact, the economic fundamentals were stronger than ever just before the pandemic. Real estate contributed 15% to the GDP in 2019, and it’s a driving force in our economy. As we look ahead, housing will lead our way out of the crisis.
In what ways does real estate support the overall economy?
Scott: Simply by serving the needs of consumers, we help fuel the economic engine, saving and retaining jobs for the good of our clients, our communities and our country. Unlike 2008 when housing caused the financial crisis, housing can help stabilize our economy and lead us back to prosperity.
What type of market do you expect post-pandemic?
Foster: We’ll come out of this with a more balanced market. Real estate is all about supply and demand, and over the last four years, demand has far outpaced supply. With some potential buyers moving to the sidelines, it gives more space for serious shoppers to get what they want.
Does that mean it’ll be less busy?
Foster: We’re still expecting an active market, even with less demand. Interest rates remain at historic lows and that’s not expected to change. Even today, people who are serious about buying and selling are doing so. Credit is available and qualified buyers have purchasing power, though doing business virtually, as most are currently, presents a new set of challenges.
How has Long & Foster navigated this virtual world of real estate?
Foster: Long & Foster has an answer for all the pieces of the home-buying and selling process that protects the safety and interests of our clients, so we can navigate a transaction completely virtually, if needed. Our agents also have access to a wealth of tools, resources and technology to ensure they can help consumers buy and sell homes, from home. And they’ve been doing just that throughout this pandemic, taking their clients from contract to close, safely and securely.
To what do you credit this success?
Foster: Many factors contribute to our success. The professionalism, resolve and training of our agents makes them better suited to succeed in any market. It’s also the confidence consumers have placed in us, as well as the tremendous support we receive from our partners in mortgage, settlement, insurance and more. Now more than ever, Long & Foster’s integrated network of services makes a difference. While others have watched sales fall apart, working with our partners gets clients to the (remote) closing table.