The economy cratered—to use a term in popular parlance at that time—in September, 2008, with the collapse of too-big-to-fail Lehman Brothers. While the measures undertaken by the federal government and the Federal Reserve averted complete financial meltdown—it never reached the point where we had to transport the necessary dollars to buy a loaf of bread in a wheelbarrow, as happened in Italy a few decades ago—the last few years have been a litany of ominous economic indicators. Unemployment: in the double digits. Consumer confidence: an oxymoron. The Dow: mostly down. Property values: down from the highs of just a few years ago. Foreclosures: way up. About the only positive is the interest rates, which hover near all-time lows. Mix in the mounting deficit, the Moody’s downgrade of U.S. T-bills in mid-2011, and a growing populist uprising centered around income inequality (and camped out downtown in Zucotti Park), and it’s not a boon time for much of anything to do with real estate—even in the Big Apple.
Economists and real estate brokers alike seem convinced that 2012 won't break much differently than 2011. When the good times return, they will do so slowly. How does the bleak economic outlook affect the property management industry, in the New York City metropolitan area and across the U.S.? Let’s take a look at the situation in various markets across the country.
Slow & Not So Steady
Like the rest of the economy, the property management industry remains sluggish.
“Our industry is not growing,” says Tara Miller, sales & marketing manager with First Choice Property Management in Boca Raton. Florida. “The economy took a nosedive. New buildings stopped being built. We don’t have new communities to target. There are 500 communities in Palm Beach County, and 200 management companies vying for the same communities. It doesn’t mean we’re not taking on new clients, just not as many as I’d like.”
That ratio can be good for the properties, as we’ll explain shortly, but grim for the health of the industry. And the lack of new communities is only part of the problem—the extant ones are also hurting.