In the following interview, Jeff Detwiler, President & COO of Long & Foster offers insight and strategies for surviving today’s tumultuous market shifts.
Nick Caruso: What stands to shake up the market in the coming months?
Jeff Detwiler: First-time homebuyers may play a bigger role in the real estate business this year, especially if we see some changes in credit standards. First-time buyers are mostly millennials, and the mortgage financing changes hit them harder than other market segments. With those restrictions loosening up, we could see more millennials considering homeownership.
The luxury market, in particular high-end homes in urban areas like Washington, D.C., will play an important role in our business, as well. This past year, we’ve seen a shift in the luxury market: suburban luxury is moving more slowly, but high-end urban areas are selling quickly and at higher prices. That transition will not only change existing-home sales, but also have an impact on new-home construction.
In addition, this year is poised to bring many boomerang buyers back to the housing market. According to RealtyTrac, an estimated 7.3 million people will become eligible to finance a home again over the next eight years, including 1 million in 2016 alone.
NC: What are your biggest concerns path forward?
JD: Rising interest rates have been predicted for the past couple years, and higher rates—albeit still below 5 percent—are projected by both the National Association of REALTORS® and the Mortgage Bankers Association to arrive in 2016. So many people took advantage of refinancing into the historically low rates (sub-3.5 percent) that we might see some hesitation to give up those rates and move.
Additionally, many economic forecasters are predicting increased volatility in the stock market this year, which could create unrest among consumers. If there’s an unstable equities market, consumers might hesitate and sit on the sidelines.
NC: What is your company’s approach to growth?
JD: Long & Foster maintains a disciplined focus on growth within our existing markets in the Mid-Atlantic and Northeast regions. Our objective is to rank as No. 1 in every major metropolitan area in which we operate, and following that, we predominantly concentrate on suburban and urban markets. If we’re present in such a market and aren’t ranking in one of the top two positions, we’ll evaluate acquisition opportunities to increase our presence.
We also execute on strategic initiatives to grow our business by taking advantage of market trends. Vacation home sales, for example, have seen tremendous growth in recent years, and we expanded our company through acquisitions to better serve clients shopping in vacation destinations. Condo living in urban settings has become more popular the past few years, and that has driven us to expand our areas of expertise.
Strategic organic growth is another way we build our business. We attract both accomplished and novice agents through targeted recruiting efforts.
NC: How does your company help agents succeed?
JD: We listen to our agents and develop strategic plans following those suggestions. In recent years, our agents have asked us to help them grow their business and simplify their lives. Those two requests have been echoed time and again in our annual Sales Associate Satisfaction Survey and during our weekly sales meetings. Whenever we’re evaluating a corporate initiative, we ask ourselves whether that project will simplify our agents’ lives and grow their businesses. It’s following that approach that we decided to invest in Moxi Works, a real estate tech company based in Seattle, Wash., last year. It’s also why we chose to offer our agents a company-paid subscription to Moxi Works’ productivity and CRM system, Moxi Engage.
NC: How are you appealing to the needs and wants of millennials?
JD: We’ve increased our focus on technology, recognizing both the power it provides our agents and company in terms of growth and its appeal to millennials. Our investment in Moxi Works positions our company and our agents on the leading edge of real estate tech—a place you’ll find many millennials.
We’re also preparing for the launch of our new mobile app and website, both of which will expand our digital presence. We’ve also built several features into our website to appeal to millennials. Our new site will make it easy to connect with us via text and social media, as well as email and phone. It will feature engaging lifestyle content, which talks about what it’s like to live in certain areas and appeals to the sense of community many millennials want to have.
In addition, urban walkable communities rank high amongst millennials, and we’re building our presence in those areas to better serve them. Condominiums and smaller housing options attract the younger generation, so our teams are growing their expertise in these areas.
For more information, please visit www.longandfoster.com.