A year ago this week, our lives came to a screeching halt. We closed our offices, our children came home from school and began the scary uncertainty of quarantine. New York City was immediately crushed by the pandemic, more so than nearly any place in the world. Every night, I read the news hoping that the infection rate would go down, only to see it go up. I would wake up most mornings hoping that this was a bad dream, only to realize that we were living in the worst pandemic of our lifetime. It was surreal. The world froze.
Now, if there’s one thing that will destroy a real estate market, it’s a deep freeze. COVID-19 was the deepest freeze I’ve experienced in my almost three decades in the business. I had seen markets rattled before. In the ’90s, 2001, and 2008, as far as New York City real estate is concerned, 2020 was on another level. During each down market, I would always think of Warren Buffet’s quote, “Investors should be fearful when others are greedy, and greedy when others are fearful.” In my experience, this made sense, and during each downturn, a few ballsy people would implement this strategy and do very well with it.
Markets tumble because people are terrified and become paralyzed. Then the typical cast of characters shows up.
The Doomsayers – The city is dead! It will never return! Abandon the ship and move to Florida!
The Heeldiggers – I will never leave. Everything is fine, and my $3M apartment is still worth $7M in my mind.
The Lurkers – (These people are the reason I keep Tylenol close.) I have money and want to buy, but I want to wait until just before the market turns and then hop in! Also, I will be really mad when I miss the downturn because I screwed around too long – oh, and I will blame my broker.
The Opportunists – I will buy now while all these people are freaking out, and I will not wait for the last second because that is impossible to time.
The market turns in a second – as we have seen in the last two weeks. Trying to predict it is futile. The turn is like a gun being fired. Instead of moving before the gun is ever fired, people try to wait for the time between the gun being fired and it hitting its target. That time is short, and that is the time we are in right now. (However, the target is getting closer, and the market will back to pre-pandemic numbers sooner than you think.)
Most of the incredible deals we saw three months, even three weeks ago, are gone. There are a special few deals left. And, of course, the lurkers are pissed. The doomsayers are beginning to think that summers in South Florida might not be so great, and they will show up to buy in June and July when the market is back to normal. The heeldiggers feel vindicated and are flashing their vaccine card and heading back into restaurants to eat. And the opportunists are doing what they always do – counting their money.
My experience has shown me that New York is never out. It may get brought to its knees, but it always comes back – and always with a vengeance. The opportunists know this. And I know that every person I sold to during COVID-19 will make money on that deal. Every one. Thank God that these situations don’t come very often, but the most successful people buy before the gun is shot. They capitalize on a weak market WHILE it is weak. They don’t wait for the very bottom to hit as that is impossible to determine. We hit bottom probably a month ago. Now the bounce back has begun. So if you have a REAL buyer, they missed the bottom, but if they don’t get their shit together, they will surely hit the top. The time is now. It will not get better than right now.
So, Lurkers – are you in or are you out?
Brokers, if you aren’t busy 24/7 right now, then you need to find a new gig. This is as good as it gets. The next few weeks will be a wild ride. Fasten your seatbelt and hang tight.
And I will leave you this week with a great quote from Charles Darwin that says it all:
It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.
Let’s do this.
-Shaun