Black Friday and Real Estate

Mary Hance, better known as The Tennessean’s Ms. Cheap, aptly describes it as the retail equivalent of the opening of deer season.

Shoppers Shelia Gad and her sister Sandra Baxter were camping out at Rivergate Mall in Nashville as early as 3 a.m. Friday. (Last year the mall had unplugged the coke machine so they could juice up their space heater to stay warm).

 

Mary Hance, better known as The Tennessean’s Ms. Cheap, aptly describes it as the retail equivalent of the opening of deer season.

 

Shoppers Shelia Gad and her sister Sandra Baxter were camping out at Rivergate Mall in Nashville  as early as 3 a.m. Friday. (Last year the mall had unplugged the coke machine so they could juice up  their space heater to stay warm). 

 

Best Buy and Circuit City customers are now paying others to stand in line for them.  The going rate: $100.  One man actually paid $200 for the #10 spot at the Best Buy near Hickory Hollow Mall.  But those are the polite shoppers.

 

You almost had to have an MBA in business to understand some of the ads and rebates.  The craft store, Michael’s, had one of the most complicated ads.

“$5 Turkey Buck + $10 Turkey Buck  on purchases over $65 only for the hour between 9am and 10am.”

 

Honestly I couldn’t even see  the fine print on their giant 25% off coupon.  It was a list of all the stuff not included in the sale like Christmas trees.        

 

Something’s amiss when you hear comments like this describing the  Green Hills Mall at 7 a.m.  “There wasn’t hardly anybody there.  We pulled into a parking spot,” said Crystal Walker.  She later ventured on to Cool Springs Mall  in spite of a broken ankle.

 

It’s all about Black Friday.  Anybody in the retail trade can tell you if you don’t get out of the red the day after Thanksgiving, it will be a very bad year.  I grew up in retail and I can certainly testify to that.  But I made a vow to myself at age 13, that as soon as I was able, I would never go anywhere near a mall  during the  [tag-ice]Thanksgiving [/tag-ice]weekend.  It’s been 18 years now since I realized that goal.     

 

Maybe a better title for all this shopping fanaticism  could   be “Black and Blue Friday”.  There have been shootings, beatings and trampling in some areas.  It’s pretty bad when stores need  police back-up, not for shoplifters but for customer control.

 

So I guess that’s where a “customer experience manager”  like Bryan Zudel of Best Buy,  comes in.   He was lining up [tag-tec]customers[/tag-tec] with a megaphone at 5 a.m. outside, not inside, the Antioch, TN store. (I’d rather be cocooned in my toasty featherbed I once  got on  a regular sale).    

 

So what does that tell us about the real estate market? 

 

More than you may think. 

 

Have real estate markets experienced similar craziness over the last year or two?  

 

It’s pretty bad when gang members in Chatsworth, California are writing in graffiti, “New Homes in the Low Millions”.  That sign was recently reported to  the  Ben Jones’ Housing Bubble Blog.

 

And yes, expensive homes have been  sprouting everywhere, even in previously bad, off-limits  neighborhoods.  They were  like kudzu; that  sci-fi spreading plant now  plaguing much of  the south.

 

Noise, traffic, constant construction,  and  neighbors close enough to sniff your morning coffee… no one seemed to care.  A family with  baby triplets pays top dollar for half a house.  No yard on a busy street  and they still  think they’ve gotten a bargain.  Older, not so charming homes, that sold for half a million less than ten years ago are now priced   over the million mark. Who would have ever thought?  

 

After all, your home is inflation -proof, right?   So what if you have to take some cash out  of it?  Isn’t that how it’s done?  What could possibly  go wrong? 

 

Could it be the  buying frenzy was just that.  A buying frenzy?  Everyone else was jumping  into the market before prices went way up.  There seemed to be no end to it.  Get in now while you can. You would  never have these  golden opportunities again.

 

So what has really happened?

 

The markets are slowing down.  We know that for a fact.  Why is that surprising?  Ever spend  the first Tuesday of the New Year working in a mall?  You’ll find more activity in a cemetery.  Where are all those people who were waiting in the dark and the cold to get in the stores at 5 a.m.?   Are they still  fighting over flat  screen TV’s? Hardly.

 

The homebuilding sector has already slowed down.  We talked about that a few posts ago.

 

Copper production is down because that market is easing.  Why?  Fewer orders for copper in pipes and wires.

 

The younger, newer real estate agents who’ve never experienced a slowdown are having to take side jobs.  Is that really earthshaking?

 

My predictions are that contractors will get easier to deal with over the next year.  They’ll be looking for more work as past jobs phase out.  That may possibly have an effect on the immigration situation as labor needs subside.

 

Inventories will rise.  There will be even more houses on the market and buyers will have more choices.  But I still hold that prices in many areas will not crash.  That’s as long as the government holds the war on terror in check and people maintain the confidence to continue to do business. 

 

Incidentally,  my family spent Black Friday together  feasting on  my sister-in-law’s succulent  Thanksgiving turkey.  I’ll take that over Michael’s Turkey Bucks  any day.

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