Update from LA LIVE – Sotheby’s International Realty Global Networking Event 2013
On June 2 – 5, 2013, I was fortunate to be among 1,400 Sotheby’s brokers from 26 countries who attended the Sotheby’s International Realty Global Networking Event and Conference in Los Angeles, CA, which was illuminating and encouraging, to say the least.
Some immediate takeaways provided by Richard Smith, Chairman of Realogy Holdings (the country’s largest real estate firm), along with Henry Howard-Sneyd, Vice Chairman of Sotheby’s Auction House, revealed some reassuring conditions across the world.
More specifically the insights we received at the event included the following:
- By all conclusions the recovery in real estate is substantive, widespread and sustainable with continued growth and demand across all major metropolitan areas
- Despite meteoric growth in prices in places like San Francisco and Miami, most growth is far more balanced in its price/ inventory ratio
- The demand crunch caused by a lack of inventory in many markets can be attributed to an under-supply of new housing stock, combined with a percentage of properties still under water relative to value. With continued demand, increased prices and the return of new housing stock, the markets will provide greater inventory to meet the foreseeable demand
- Unemployment rates will remain higher in the immediate term, but new household creation will help absorb inventory
- Tax havens like Florida and Texas are benefitting greatly from the onerous income & state taxes being levied in places like California, New Jersey, Connecticut, New York and Massachusetts
- Growth will be uneven in the years ahead as Midwestern states such as North Dakota, Indiana and Nebraska will see the greatest broadening of their economies, and have clean balance sheets and low-levels of municipal debt. Meanwhile, cities in California, along with a city like Detroit, will face municipal bankruptcies if solutions for overarching debt is not approached more deliberately
- Texas, with its booming economy which can be attributed to the growth in the energy sector, along with other energy supply-side states, such as North Dakota, will see continued job growth, as America’s push toward greater energy independence brings continued windfall to these areas and their related economies
- Second-home markets have seen notable recovery, though it’s been less consistent quarter-to-quarter. Markets like Palm Beach, Montecito, Naples, FL, Nantucket, and The Hamptons have all seen strength across all market segments; while the mountain states saw great pockets of strength in Q3/ Q4 of 2012
- Telluride and Durango, Colorado both saw consistent strength in the beginning of Q2 and we each anticipate a strong summer with Texans again driving the market’s vitality across all market segments and price points
This information was re-enforced by the following article describing the return of vitality to the second home market on Bloomberg’s Market Watch site: http://www.bloomberg.com/news/2013-06-14/u-s-vacation-home-rebound-lifts-hilton-head-to-hawaii.html
See additional photos from the Sotheby’s International Realty Global Networking Event 2013: https://www.facebook.com/TellurideEstatesBillFandel#!/media/set/?set=a.367884809978584.1073741831.281367361963663&type=3