In “Extraordinary Popular Delusions & the Madness of Crowds” by Charles MacKay, we are told, “Men, it has been said, think in herds; it will be seen that they go mad in herds, while they only recover their sense slowly, and one by one.”
Happy New Year! Here’s to recovering our sense, however slowly, one by one. Thank God 2008 is over. It started out like a dream, but ended like a nightmare, one that lingers and haunts us.
Without a doubt, the last year was tragic and the list of nightmares extensive: Madoff, Bear Stearns, Lehman Brothers, Fannie Mae, massive foreclosures, Macklowe and more. The result? Plummeting real estate sales volume and falling prices here in the city. But New Yorkers will survive, as they always do, scars and all.
After Sept. 11, New York City witnessed one of the worst economic downturns in its history, but only shortly after embarked on one of its greatest booms. In a recent conversation I had with one of the city’s smartest billionaires, he pointed to this phenomenon of New Yorkers becoming more motivated to lift themselves up after a fall. He told me that a new wave of millionaires will be made in the next few years, and their successes will be the result of finding opportunities during these dire times. Wise words from a rich man — nothing is more valuable than that. This month we look back at some opportunity seekers who made their fortunes in down markets in years past. Check out the story on page 29.
The fundamentals of this downturn are clearly different from ones we’ve had in the past, and of course the market’s reaction is also different from what we’ve experienced before. In this issue we look at how the game has changed with a series of stories on how buyers are exerting their newfound dominance over sellers. We examine how buyers are terrorizing sellers with insultingly low offers, in some cases 20 to 40 percent below asking price.
In the same series we also have a story on how brokers have abandoned shell-shocked Baby Boomers and are now increasingly targeting Generation Xers as their primary clients.
I am constantly reminded by top company executives that our recent news coverage has been negative. My response to them: We are in a recession and to try to report otherwise would be stupid. The only other approach would be the tack that some of my favorite newspapers and blogs in the city are taking, which is to cut back on their real estate coverage. That is not acceptable to us. So I am proud to say that when it comes to real estate news, The Real Deal is still the only must read in town.
With many commissions lost and staff layoffs piling up, many of the larger brokerage houses felt it was prudent to cancel their holiday parties. In the face of so much gloom, we thought the industry could use a little lift. Typically our own holiday parties are reserved just for our staff, but this year we thought it would be a good idea to open our doors to some of our friends and supporters in the industry and have a rocking party for 1,200 guests. In response to the stellar attendance, we plan to hold more events for networking, including forums and seminars, in the coming year. Be sure to check our events calendar for updates in 2009.
Here’s to a productive New Year!
Amir Korangy
P.S. Also, be sure to look for our annual Data Book 2009 next month. As always, the book is filled with all the data and research you need to get a leg up in the challenging market.