S.E.C. Real Estate Observer

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Normally, during the summer months of a presidential election year, the ongoing top news story is about the candidates and the upcoming party conventions. This year, however, there is one ongoing news story that is topping the charts above politics: the price of oil and its effect on all products made from oil. Of course, the most immediate and recognizable effect is the price of gasoline! I will not quote that price because it will only be a few hours before it can change. The only price I can relate to is what the price of gasoline was at the “service station” I worked at in high school: 30.9¢ and of course you got your oil and tire pressure checked along with a cleaned windshield. Even that was too much for my friends and me because we could buy at another place in town for 19.9¢ but you had to be willing to pump the gas yourself! My how times have changed!

Change is something that we all have to accept as part of life and it’s especially true in the real estate market. After seeing a healthy and stable real estate market for most of the ‘90s with cap rates in the range of 10, the last few years we have been a part of a booming market where cap rates dropped between 6 and 7. Such change was, of course, opportunity for some and increased risk for others. The markets were flush with cash, lenders with pockets full of money to lend at favorable terms, more loans that became securitized, and buyers with a 45-day time clock ticking — “I’ll buy anything”!

Today we all know that change is again upon us in the real estate market — change that we will work with and adapt to. For real estate professionals, creative real estate marketing has always been at its best when change is occurring — especially when the change is toward a slowdown in our market. Last week I attended the annual marketing meeting of the New York Commercial Association of Realtors (NYSCAR) and I could not help but be thankful that creative marketing groups are available to assist our profession in finding creative solutions to our client’s real estate related problems. The founder of the Society of Exchange Counselors, Mr. Richard R. Reno, believed that “there is no bad real estate, only untimely or inappropriate ownership.” How true this is in our current market as we know that a particular building or land tract did not change, but other factors affecting the owner did change.

Rest assured, real estate is still the best place to invest and part of any investment vehicle is cycles. I look forward to new opportunities in the real estate market and I know of no better place to be a part of those opportunities than in local, regional and national marketing groups that focus on creativity. I have set my sight on attending more exchange and marketing meetings in the next couple of years and I hope to see you at some of them. Together we might just create a solution to a problem by creating an opportunity for someone else!