I have a lot of friends in real estate and lately many of my coffee, lunch, and wine dates have been catching up with my favorites of those friends. One of the most common themes in our conversations is about how eerily the current real estate market conditions feel exactly like it did in 2007…right before the Great Recession arrived.
Even with friends who weren’t working in real estate at that time, many of us have known, for quite a while, that we are seriously overdue for a correction. Right now, we all agree that it seems the long-awaited market correction might actually (finally) be arriving.
In fact, even non-real estate, but business owner and finance industry friends have recognized the echoes from the past heralding change. From a birds eye view, the signs are all amassing and growing stronger.
It’s common to be driving around Charlotte and do a double take, wondering “where did that come from?” which is closely linked to “wait, where did that go?” Construction has been going like crazy all around this area and the construction industry has been behaving as though it’s drunk on profits.
The thing is, unfettered growth is not natural, nor is it sustainable. It is unnatural to expect a perpetual season of summer. I’ve been saying for years now that the Charlotte real estate market feels eerily similar to the way it did all those years ago.
In early September of 2008, the day that Wachovia failed, you could feel the major shift arrive as Charlotte joined the rest of the country in the recession. Up until that time, we’d been plugging along and watching what was unfolding in other areas…thinking we could avoid joining in the economic mess.
Until we couldn’t avoid it any longer. Back then, I had a house listed for sale and it was getting great interest. One buyer intended to make an offer, then their agent called me to say their fully pre-approved financing had been denied. The day that Wachovia failed and went first to Citi and then to Wells Fargo, the city of Charlotte took a collective gasp. One of the funniest captions of that day said, “I’ve worked for three companies today and never moved my desk.”
More than a recession, this area faced an identity crisis of: “If we’re not bank town, then who are we?” None of which was fun. Yet for years we’d been growing, and just kept building, building, building; thinking we were immune from the economic forces already impacting so much of the country.
That house for sale ended up not selling until years later, with another agent. Because my then-clients held me responsible. I am many powerful things: single-handed creator of local or global economic conditions is not one of them.
My intuition isn’t often wrong, and so many of us with intimate knowledge of the past are acknowledging that we may finally be starting to see the market correction that is sorely needed. The echoes of the past just keep getting stronger, while construction just keeps merrily forging ahead, seemingly oblivious to them.
All of that said, I don’t believe the coming correction will be as severe as the last one. But who’s to say? Back in 2007 those of us who had never experienced a market correction had no idea what we were about to encounter; it’s probably for the best that we didn’t know.
In a very personal reminder of echoes from the past, I just allowed myself to reschedule two social gatherings. While I really did want to go to both, the reality is that right now I simply don’t have the energy for them. Allowing myself to speak up and say that I need rest rather than quality time is still not comfortable; but I’m getting better at it. That intense lesson arrived about a year ago and I’m still learning to lean into it.
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