Once again, my Mayfair International colleague in London, Nick Churton, has taken a moment to assess the first few weeks of real estate market activity in 2009 and suggests that while the economic picture may still be grave in both the US and Europe, local market activity in the housing sector seems to be far from moribund . . .
The shiny chrome pinball of bank failures on both sides of the Atlantic still crashes around the machine, ringing up eye-watering losses as it goes.
Newspaper headlines sensationally remind us of the effect this is having. But some media can often be out of step with breaking real estate market news. Experts as they may be, news reporters are not working day-by-day in real estate offices and they are often the innocent mouthpieces of received wisdom. Real estate statistics and trends do not have the immediacy of the stock market, they take longer to filter through and then distort the up-to-date truth.
Fortunately each piece of negative media news makes one fewer bad headline in the future. This downturn will end, just as certainly as the Great Depression of the 1920s ended. Already, in 2009, there are signs of increased activity in the real estate market. These are not ‘green shoots' - heaven forbid one should announce that just yet! But there are signs that people who have to move are getting on with it. These signs also show that many sellers have brought their hot price expectations more into line with cold reality.
It is never easy to come to terms with a loss of some equity in one's home - especially for those who have never had to come to terms with this in the past. But before long the desire to move on in life overcomes even the most steadfast seller when faced with the proposition that getting on may be better than holding on - especially when what they are holding on to might still be sinking. It's rather like asking comfortable passengers on the Titanic, before it hit the iceberg, if they would like to freeze in an over-laden lifeboat and then asking them again after the collision. Same question. Different answer.
We are living through a dramatic piece of economic history that will be mentioned as much in the future as the Great Depression has been in the past. Indeed it is probable that the two events will be forever linked as classic examples of modern cataclysmic economic and commercial breakdown.
But those of us living through such shattering events are being forced to make decisions that few of our grandparents and great grandparents ever had to make. Mass home ownership, we have all learnt, can wear two masks - one of comedy and the other of tragedy.
Much depends now on how quickly that shiny pinball comes to rest. But meanwhile there are sure signs that the real estate buying and selling public are fed up with this recession, they are not prepared to put their lives on hold while the governments across the world get their policies sorted out, or until the banks get their houses in order or even until price correction ends and property regains its upward momentum.
Buyers are visiting real estate offices in greater numbers, checking online and inspecting homes. And why shouldn't they be? There is great choice, prices have come down dramatically and those with the finance can enjoy some of the lowest interest rates ever.
Thank you, Nick, as always for your fortifying perspective on the real estate world. We are experiencing the same surge of interest in most of the US market. I wish you warmth and sunshine from sunny Fort Lauderdale!
cheers!
Julie
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