We always believe in putting things into perspective – sometimes zooming out and other times turning back the clock to revisit yesteryear’s perspectives.  If only to reinforce humans’ weak predictive skills, we think there’s always a lesson in there.

So where did everyone think we’d be right now?  This time last year, we thought we’d be in a different place.

  1. Inventory:  to start with, most prognosticators believed we’d have far more supply hitting the market.  With prices being as robust as they have been, surely sellers would finally be moved to list more property, right?  Wrong.  Inventory has only dipped lower.
  2. Credit:  with the financing markets remaining tight since the 2009 downturn, many believed that banks would need to begin loosening their credit standards in order to a.) maintain mortgage volumes and b.) maintain their own profitability.  Yet, no, this hasn’t happened either.  Stringent lending standards have persisted and this has done nothing to improve volume or property prices.
  3. Rates:  the idea of the Fed keeping rates at such simulative levels for so long brought out the incredulity in many “experts”.  And still, to this day, it looks like December is the earliest that a rate increase may occur.
  4. Prices:  we have seen year on year gains to be envied in most national and international markets.  Some have even ventured to call the market frothy.  Yet when you consider that half of all transactions are cash, the overleverage that would be necessary to create such froth is unsubstantiated – it just ain’t there.  It’s understandable that people had predicted a plateau to property prices.  Yet underlying supply and demand dynamics have prevented any such calming of the market.  Records continue to be set, medians continue to rise, and the pipeline for new supply is but a trickle.

So what are we to make of these predictions?  First, the market continues to be far more resilient and dynamic than most thought.  Never underestimate the power of NYC real estate.  Second, there’s a certain momentum or inertia to things (take your pick of which angle you choose).  Things rarely change as quickly as we want or believe them to (except when bubbles pop).  Third, we as humans have an awfully hard time looking out to and processing an accurate future.  For now, we would humbly offer: stay calm and work with the market at hand.  The goal is not to predict it, rather to have the agility to react as needed:  appropriately and with the discipline to benefit from wherever it takes you.

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