With a good price, you get a dealWith a huge price, you (might) get a… meal

Romanian Real Estate market, Autumn 2008

(All Time Classic, 02.09.2008)

“What happened, did you find anyone, damn you?”. It was 06.32 in the morning and I had forgotten my mobile switched on. The sound of the sms woke me up (good sign, means I was not snoring…) and I took it in my hands with a mechanic move. I didn’t really understand what was the meaning, I thought it was a mistake. Later on, after my fresh orange juice, I realized that this sms was sent by a friend of mine, a very important businessman here in Romania, who has a land to sell in Bucharest. He bought it in a high price and still fights to sell it in an extremely high price, although I told him many times that it’s not possible. No, for him and thousands of others, the problem is not his price…

This summer was the craziest of the last 60 years (at least), in terms of money spending. Romanians did their best to break any possible record, ranking first in Europe in the increase of consumption comparing to last year (I think +27,3% in the first 6 months of the year). Hundreds of thousands of people (some say millions) feel rich, mainly because of the price they evaluate their properties. But the reality has nothing to do with their wishes…

It is true, last year there were many exaggerations in the Romanian Real Estate market. Who is responsible? Not just one, but for sure check all the ones who are complaining non stop for the high prices now, usually they are the ones who pumped them. Today the market has many directions, not the one of endless rise.

The clients do exist and the demand is strong, but not anymore for whatever crazy someone might propose. I was always saying that I want my clients to know, not to be “blind”, buying whatever existing, without any market study and any strategy. I am happy to notice that nowadays most of Romanians and foreigners are more careful, more serious, maybe even defensive, searching for the real values and reasons of an investment.

For many “professionals” today, this investor’s behaviour is a problem. For me it is a blessing. We are not doing business just for one day, thus we want to see the circle of the investment closing successfully. This is why now the transactions are less, but they have better basis. The demand is strong and it will continue to be, but it is also the time to “punish” who doesn’t respect any rules and to appreciate the ones who follow at least the basics of Real Estate.

So, trust me, when you sell a property and your price is good, there is nothing to be afraid of, you will get your deal, there are plenty of buyers waiting. They should also not be afraid of anything, because the future of Romanian market is bright for all serious investors. On the other hand, when you search the stupid, when you are like the hunter who waits with the gun for endless time, hidden in the forest, you have 1% to find this crazy investor, but 99% to end up without him. Now this happens already for 10 – 12 months for many owners with huge prices and, believe me, it will be the same in another 12 or many more. The best they will get will be a potential business… meal, discussing with the client, before he discovers they want to squeeze him.

Romania has a great future in Real Estate, but from now on only for the serious ones.

2010. This was my approach in 2008, few days before Lehman Brothers exploded and we all realized that the economic crisis had arrived. Now, after almost 20 months, try to remember how did you think back then. Then compare it with how do you think nowadays. At that time this article was maybe “too pessimistic”, “too dramatic”. How does it look now?