“Let us never negotiate out of fear, but let us never fear to negotiate.”
– John F. Kennedy
Well another month of our Goldilocks economy – you know, not to warm but not too cold. It’s as if the economy is starting to deliver meat and potatoes growth, but the stock market only wants assurances that the Kool-Aid hasn’t run out! Let me tell you, I am tired of fighting over if the glass is half empty or half full. I just want to know who the heck is drinking from my glass!
I will say that I am very concerned that the stock market is overvalued and due for a correction at the same time the fed is looking to remove stimulus, all the while business and consumers are waking up to the realty of the new Healthcare Tax (for most of us it is a 30% – 100% increase in rates). Additionally, Dodd Frank regulations will fully kick in starting in January and will likely make as many as half of potential new homebuyers unqualified. Lest I sound like I am full of Bah-Humbug, we are in recovery but it is sluggish.
We have created 7 million jobs in the past four years, but this is in light of 8 million job losses. Overall the unemployment rate has continued to fall, however, labor participation rate has not. Fifty-eight percent of adults have jobs – we need to be closer to 62% – 65%. Commercial real estate transaction volume nationwide is up 27% over last year but this is mostly due to larger transactions. The under $1 million market only turned this year.
Our numbers are all up this year over last year but we still have lots of landlords and tenants who are suffering with vacancies and low income. So again, it is not whether the glass is half full or half empty, it’s that you still have water, right?
Think of it this way, if one person tells you that this is the most challenging market they have faced and that 35% of the transactions are impacted by lenders or other uncertainties – are they wrong? If another person tells you that the Wall Street Journal just declared an end to the housing bust, that the housing affordability index is at an all time high, interest rates are low, vacancies are dropping and no time in history have we been able to communicate easier or faster – are they wrong?
Of course they are both right but the real question is which of these belief systems benefits you? In short, when you believe that a certain percentage of your deals are destined to fall apart because that is the way the market is right now, that is going to affect how hard you work to keep them alive. But when you believe that you are in an amazing market with more opportunities for those that work hard, when your deals start to go sour, you are going to do everything possible to keep it alive because at your core you don’t think it would be normal for one of your deals to fall victim to this market.
The team at CDC Commercial daily strive to know our market and the value of the properties in it. We work to confidently tell this information to our clients and prospects. In addition, we always project to our clients and prospects that what we stand for above all else, is looking out for their needs and protecting their best interests at all times. We hope that everyone wants to work with a broker like that!
During the Holiday Season more than ever our thoughts turn gratefully to those of you who have made our progress to success possible. We at CDC Commercial hope you find a season where time with loved ones are the most important appointments on your calendar. May what you scatter tell more about your life than what you gather. Happy Holidays and enjoy the story.
I was at the corner grocery store buying some early potatoes. I noticed a small boy, delicate of bone and feature, ragged but clean, hungrily apprising a basket of freshly picked green peas. I paid for my potatoes, but was also drawn to the display of fresh green peas. I am a pushover for creamed peas and new potatoes. Pondering the peas, I couldn’t help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to me.
“Hello Barry, how are you today?” “H’lo, Mr. Miller. Fine, thank ya. Jus’ admirin’ them peas. They sure look good.” “They are good, Barry. How’s your Ma?” “Fine. Gittin’ stronger alla’ time.” “Good. Anything I can help you with?” “No, sir. Jus’ admirin’ them peas.” “Would you like to take some home?” asked Mr. Miller. “No, sir. Got nuthin’ to pay for ’em with.” “Well, what have you to trade me for some of those peas?” “All I got’s my prize marble here.” “Is that right? Let me see it” said Mr. Miller. “Here ’tis. She’s a dandy.” “I can see that. Hmmmm, only thing is this one is blue and I sort of go for red. Do you have a red one like this at home?” the store owner asked. “Not zackley but almost.” “Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble”, Mr. Miller told the boy. “Sure will. Thanks Mr. Miller.”
Mrs. Miller, who had been standing nearby, came over to help me. With a smile said, “There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn’t like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store.” I left the store smiling to myself, impressed with this man.
A short time later I moved to Colorado, but I never forgot this story of this man, the boys, and their bartering for marbles. Several years went by, each more rapid than the previous one. Just recently I had occasion to visit some old friends in the Idaho community and while I was there learned that Mr. Miller had died. They were having his visitation that evening and knowing my friends wanted to go, I agreed to accompany them. Upon arrival at the mortuary we file into line to meeting the relatives of the deceased and to offer whatever words of comfort we could.
Ahead of us in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts…all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband’s casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her and moved on to the casket.
Her misty light blue eyes followed them as, one by one, each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the mortuary awkwardly, wiping his eyes. Our turn came to meet Mrs. Miller. I told her who I was and reminded her of the story from those many years ago and what she had told me about her husband’s bartering for marbles. With her eyes glistening, she took my hand and led me to the casket.
“Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim “traded” them. Now, at last, when Jim could not change his mind about color or size…they came to pay their debt..” “We’ve never had a great deal of the wealth of this world,” she confided, “but right now, Jim would consider himself the richest man in Idaho.”
With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shiny red marbles.
Happy Holidays from Team CDC Commercial
Don, Nick, Matt, Nancy & Cheryl