Luxury Insider: When is Good Too Good to be True?
I am a sucker for good news. Aren’t we all? We function on good news or the hope of good news. It’s an addiction we cannot shake off. I too am addicted…up to a point. When a consensus starts building that happy days are here to stay for a long while, that’s when I start worrying. Must be my European “glass half-empty” upbringing. In the old country, good news cannot be rationalized and excess optimism is often synonymous with ignorance. Good news happens though, thank you, but you are always on the look-out for what happens next. Watch out…
During the ever-exciting Luxury Portfolio International Summit in Las Vegas, at the end of February, the thousands of real estate professionals in attendance heard nothing but good news. Plenty of them, all pretty convincing. The market is great, sales are up and so are prices. The high-end market, particularly, is hot. Exceptional homes are in demand and luxury items are fleeing off the shelves. Rolls Royce reports a 59% jump in annual sales. Sales of luxury goods doubled in Brazil, Russia and China. Times are good. Proof? The number of millionaires was up 85% last year, etc.
Don’t worry, be happy. No clouds on the horizon for the balance of the year.
Now, you might ask, what about next year, and the next one, and the one after that? Well, according to a number of smart and eminent brains at the meeting, all well versed in both real estate and economics, we are in for something like 5 years of heaven. One theory is that the recession cycle had been so much longer than normal this time that the upswing will also last longer than the usual 4 years or so. Nice to hear, even though some quick minds remarked that the “recovery” started about 3 years ago (even 5 years if you use the bull market on Wall Street as a reference) Not that much time left when you look at it this way, but who is counting?
We’ll see how good the real estate market will be next year and beyond… When we get there. I am not good at guessing past 12 months… And I am not sure anybody else is either at that kind of scientific guessing, no matter how pertinent and substantiated their prognostics may be. You just never know what can happen from one year to the next. I got burned once, in the early 90’s, when everyone predicted a lasting boom and got a bust instead, one that took most “experts” by surprise. I have been humble ever since.
You see, we, as Realtors, don’t “make” the market -no offense to those who believe otherwise. We just deal with it as best we can for the benefit of our clients and our own. However, when the market has been good for a while and getting better, we take success for granted. We are just so good. Invincible; nothing can go wrong because we master our craft, right? At the age of selfies and “in Me I trust”, those thoughts and feelings get quickly to the brain. We become complacent. Well, over-confidence can be hazardous, especially when we have zero control over what’s going on in the marketplace.
Don’t get me wrong, it is very-very possible that we are going to celebrate happy days for years to come. All I am saying is, let’s take the market one year (or even one month) at-a-time. It is what it is. With this in mind, may I remind everybody out there, looking to sell, that the conditions, today, are just about ideal? Timing is everything!