Here are observations you can be making now to prepare:
For most professionals, there is some sense of downturn related changes or crazy aggressive terms in the background of the marketplace, and they may not be obvious. They’ll be subtle, and drowned out by the “it’s different this time” background noise. Particularly, for developers, who are die hard optimists and focused on execution of their deals, this can be lost in the background.
Now, our team at Urban Pacific is exceptionally sensitive to the small signals, as well as, we have better cycle tracking tools that we use, and review regularly. Most importantly, we have more powerful networks of people in other markets, and other locations, that we regularly speak with to see what they see and are experiencing from their standpoint. We share our insights with them also.
Ultimately, when you haven’t been through a downturn (2008 was the worst in a generation from my conversation with long time professionals) you cannot know what a downturn really is. It is surreal, unbelievably good, while at the same time lots of people are saying “it’s different this time” and you believe you want to believe it so badly, to ignore the possibility that the market can turn down.
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