Real Estate Market Update- 9/2/10

"Are you seeing any improvement in the market?"

That's the most common question we hear from people lately– inside and outside the real estate industry. Here are some of our observations based on market data, first hand accounts and listening to OPO (Other People's Opinions). We don't recommend using this to re-balance your retirement account, but at least it will provide a glimpse of what we're seeing and hearing.

• First things first, without question we've seen an uptick in search activity this year. It's not surprising when you consider the meltdown of 2008-2009; it would be hard not to post a respectable gain. Regardless, our search activity for the four months of May to August was reminiscent of the go-go years of 2006 and 2007. We actually broke a sweat!

• Is this a sign of a recovery? Who knows. Our search activity remains confined to a small group of builders and developers who cleared the impairment hurdles or were lucky enough to sidestep legacy debt issues. In several of these instances, they are hiring in multiples: one client retained us on five searches YTD, another on four. It's been a long time since we've seen nine searches from two clients.

• "Confined to a small group..." could also read "which leaves a large group sucking wind on the sidelines". Some appear to be highly cautious and conservative, others paralyzed by the lending freeze that blankets our industry or from being boxed out on land positions by the big builders. How much longer they can withstand these challenges remains to be seen.

• Meanwhile, a hiring campaign has been underway at the regulatory agencies (FDIC, FNMA) and the subcontractors they work through (RAC's). For many in our industry, this could prove to be the safe harbor (employment-wise) while waiting for the storm to pass. We posted on these job opportunities (and how to pursue them) twice before. If you missed them, here are the two links: FDIC Part I and FDIC Part II

• Another common trend during market corrections is the rise of small start-ups. Weak employment motivates many real estate professionals to create their own opportunities, usually by banding with a handful of peers to offer turnkey solutions to banks, institutional owners or by raising seed capital to do deals under the new basis thresholds.

• One thing is becoming clear: to survive (prosper?) in our industry today it helps to have an alternate strategy. For some, that might be a Plan B or C... and some of which have yet to be defined.