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IAN BLACK
Partner and Co-Founder
Ian Black Real Estate
Sarasota
I did actually see it coming, absolutely. I say that because at the time, things were whacko. Just absolutely whacko. I saw a lot of people getting into real estate that shouldn’t have been, amateur investors who didn’t know what they were doing. I knew people who were buying three, four or five houses or condos with no money down and without the income to support such purchases and I remember thinking ‘This is just not sustainable.’ And it wasn’t, and inevitably, the era of easy money came crashing down. The next time we have a recession — and make no mistake there will be a next time, though I know people who seem to believe we won’t again, at least in their lifetimes — I believe we’ll have more of a correction than a full-blown recession, and I say that because the market today is not behaving in a way that would lead to it. Unlike in 2008, I don’t see investors who are highly leveraged, and the banks won’t allow them to be. That’s a significant change. I see real estate, whether it’s residential or commercial real estate, continuing to be a healthy option for investors, especially in this part of Florida. Now that said, it could be impacted potentially by the oversupply of certain sectors of the market, certain product types.
NICK DEVITO II
Partner
Ian Black Real Estate
Sarasota
In 2006, I was actually in the jewelry business, but just like real estate, at the time things there were over-exuberant. I began to see things changing around then, sales that shouldn’t have been occurring taking place, a lot of it on credit, and over time I concluded that I had to do something else, because just as Ian said, it wasn’t sustainable. I knew something was going to crash, it just had to, because the fundamentals weren’t there. So I went into real estate, not realizing that it would be impacted the way it was. But now, everything that I see and hear, the people I talk to in various kinds of businesses, all signs point to continued health for commercial real estate in this part of the state. I don’t see any signs of a bubble forming in the same way that I did thirteen years ago.
MICHELE FULLER
Partner
Ian Black Real Estate
Sarasota
I don’t know that I saw the last recession coming, per say, what I remember more was just how shocked I was at how quickly the recession hit and impacted seemingly everybody in the real estate business and just swept them in. And then of course it lasted much longer than anyone believed. As for the next downturn, I don’t see us experiencing a recession quite like the last one. I don’t foresee any sort of crash, the way things went at the conclusion of the last cycle. Instead, I think what we’ll see in Southwest Florida is a more normal correction. I think we’ll have a leveling off, rather than falling off of a cliff.
JAG GREWAL
Partner
Ian Black Real Estate
Sarasota
I did not see the last economic recession coming, not at all. For context, I had just moved to the U.S. from the South Pacific in 2000 and gotten into the commercial real estate business here. In 2006, when I was with Coldwell Banker, I was part of a team that was number five in the world. In the world! Business was great, we were making deals, everything seemed to be humming. In 2007, by contrast, we had just one closing all year. I was stunned. Deals began dropping off left and right. We couldn’t put anything together or keep it together. Suddenly transactions that made perfect sense couldn’t close for various reasons. In Australia, where I am from, by contrast, things don’t ever fall off the proverbial cliff the way they did here more than a decade ago. Instead, cycles there tend to glide to a stop. So it was a real education. But in terms of the next recession, I think the only real threat to the U.S. economy is going to come from outside this country. It could be a trade war, it could be escalating tensions with another country, or something else. Who knows? But what’s clear is that the rest of the world isn’t doing as great economically as we are, and that could spur problems. Still, all that said, I don’t see any signs right now that we are headed into another recession.
STEVE HORN
Partner
Ian Black Real Estate
Sarasota
In October 2008, we knew that there was something seriously wrong in the market, and everyone said ‘we’re in a recession.’ Ok, true. But then look what happened over the next two years — we moved forward. Florida and the Sunbelt in general were the weakest link in the nation’s economy, we had an oversupply of housing and foreclosures and high unemployment. But today, Florida is one of the strongest links in the national economy — maybe the strongest, in terms of job growth, population growth, etc. And now, we’re not overbuilding, I don’t see people being overleveraged the way they were in 2008. Everyone, or nearly everyone, remembers what those days were like and they are acting accordingly, and as a result, I see us in Florida and Southwest Florida as being somewhat insulated from what happens in the rest of the world.
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