“THE MARKET HAS STOPPED GOING DOWN!” Skeptics today see those words as the sign of a charlatan or snake oil salesman. And it’s no wonder, developers and marketers have been crowing this claim like clockwork since the beginning of the collapse in late ‘07.
Two weeks ago I hazarded those same powder-keg words in a very public forum – a Crain’s article. But I based my observation on HARD FACTS and observations after witnessing 43 units (over $11 million dollars worth of real estate at about $278 per square foot) sell in 90 minutes. 90 minutes!
Yes, it was an auction. And yes the average purchase was 25% below last asking price. But the sheer momentum indicates something exciting is afoot. Namely that SOME people are very interested in buying real estate again.
Garry Benson: Are You Insane? That was the question posed on the Crain’s comment board by one Ryan C, arguing that I sound like a “snake-oil salesman,” as if I had some sinister ulterior motive, as if we in the industry are all in cahoots trying to hypnotize the buying public with disingenuous bullishness.
My answer to you Ryan is if I’m insane, it’s the good kind of insane…insane for loving this topsy-turvy industry, even the downturn, because the challenges energize the hell out of me. I don’t make my declarations lightly. If there’s a “buy now!” conspiracy going on, I’m not part of it. In fact, half my day is spent advising certain clients NOT to buy, at any discount.
And stop focusing on the deep discount, Ryan. It’s the fact that people bought at all. A good old-fashioned buying frenzy. That speaks volumes about that particular market, and other related markets, in my opinion.
My opinion doesn’t matter? Fine. But look at the CASE-SHILLER Home Price Indices that have shown an upturn in most major markets. Does it mean we’re in for sunny skies in Detroit? No. (Let me know if you want a link to the study, I’ll email it to you.)
FINAL ANALYSIS The auction is merely proof of this: some people are buying up real estate AGAIN, with a hunger and urgency I haven’t seen in a while. These are our SAVVIEST buyers and they are not waiting. I’m clearly not alone in thinking things have stopped going down, Ryan. I’m joined by a mob of people who put their money where there mouth is to the tune of 11 mil.
Ryan and other detractors, let me know your objections to my logic, if any, and I’ll be happy to continue this conversation right here.
Best,
Garry
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