It’s Official San Mateo County. The R Word Has Been Said. Will It Affect Us?

Inman Connect NYC

We’re in New York City right now attending the Inman Real Estate Connect where we’ve learned about what other real estate bloggers are doing and then what the big guys of the real estate industry are seeing from other parts of the county.  Brad Inman, the man behind the great real estate news site online with his name on it, started the whole conference off by telling us that the 2008 real estate market is in a “World of Hurt.” Short, but sweet, or perhaps bitter sweet, depending on your perspective. Inman tells us that global wealth today sits in New York City and London and then went on to talk about how the Rule of Law in real estate broke down under the last two presidential administrations with the lax underwriting standards allowed both within Wall Street and the mortgage industry.  Overall the real estate industry allowed sloppy disclosures and now we’re in this big mess that is rippling around the world.

Real estate runs in cycles of approximately 10 years with half of it up and half of it down.  This past cycle was longer than 10 years but Inman believes that the downward slump began in the fall of 2005 and that today we’re about half way through it.  There are similarities with the real estate cycles that took place around 1978 and 1982 and if you’re old enough to remember what went on with the real estate business then, you’ll understand.  If you’re not, as your parents to tell you about the 22% interest rates for mortgages that took place then and what people did to buy and sell homes.  Not pretty my friends.

Whether Inman is correct on his assessment is something we’ll find out about in the future, but the R word was on the lips of a lot of people.  If you’re interested in knowing what the real estate industry is thinking go the Inman web site and read some of the great stories they publish.  Brad Inman has been covering the real estate industry for a long time, formerly as a newspaper reporter and then founding several companies so his perspective comes from years of observation.  I’ll be talking more about what we’re hearing here in the Big Apple tomorrow.