2013, here we are! The champagne came & went. Time to go back to work. Glad, actually, to get back to a busy groove, however hard it may be after too much time off & too many calories. So, here is the traditional January question: what is 2013 going to be like in the real estate luxury market? Any guess? Anyone?... Don’t look at me. My crystal ball is a bit blurry. These days, the economic outlook, as it pertains to real estate, is about as predictable as the weather in Boston. Not an easy bet. The good news is that both the economy in general and the real estate business in particular, are trending in the right direction. Last year, as we said in the previous blog, has been a good one, right from the start. Mid-year, the top end woke up and accelerated through the end of the year. It is a great omen. When the wealthiest among us are back in waves, buying those multi-million dollar properties, I feel pretty good about the market. These buyers know what they are doing and they have enough money to prove it.
We are starting the New Year with plenty of momentum. Consumer confidence is up from last year and it is showing as consumption keeps on climbing. We gained good traction over much of 2012 and should rightfully expect what has been referred to as an “economic renaissance”. We are ready for it. Too bad politics are still in the way, somewhat clouding the horizon.
Frankly, as optimistic as I am about this year, I must admit that we have, at best, 6 months worth of visibility. The real estate activity, at the high end, promises to be great through the spring and probably well beyond, but we can’t see that far at this time. The Fiscal Cliff saga reminded us that long term planning, at the federal level, may be a thing of the past. We know that we need a complete overhaul of our fiscal system and a new vision of how we should distribute the money we don’t have. That will not happen anytime soon. In fact, the way that the kids are behaving in Washington, it might be better –and definitely safer- to keep on working out more short term fixes with rubber bands and scotch tape, than to attempt a major reform…
There is another reason why, in spite of the above, that I am optimistic about this year in the luxury market. Even though the economic picture in our beloved country is far from perfect today, it looks pretty good considering what’s going on elsewhere in the world. The US is still incredibly attractive to buyers looking for a safe-haven, a safety net for long term real estate investments, a friendly land to create a business and a wonderful place to live and raise a family. Whether because of political & financial turmoil, or property rights, or buying & selling restrictions, the US is a real estate heaven and will be even more so in the years ahead.
Yes, everything is relative… Ask the thousands of buyers coming from afar with cash in hands to invest in a home or a business. Last year, their impact on US real estate sales and rising median prices has been considerable. Foreign nationals are largely responsible for the sometimes frantic real estate activity that we have observed all year on the two coasts in the high end. Together with the progressive economic recovery which spread wide in the country over the last 12 months, this phenomenon is expected to continue fueling the real estate demand this year. I look forward to a great start in 2013. Let’s have another glass of champagne!
Happy New Year!