Economic hard times have befallen many a large US city after the global economic crisis. Those cities which had extremely high growth rates during the building of the real estate bubble, ended up crashing the hardest – I speak of areas like Las Vegas, Florida, Riverside County California, and Phoenix for starters. Not long ago I was reminded of the situation, when I talk to an acquaintance in the Phoenix area, he stated;
“[Dear Sir,] I live in the Phoenix metropolitan area and have operated a real estate investment company and environmental company for the past 20 years. Unfortunately both of those businesses are history with the awful economy we now have in Arizona.”
In a hearing of this familiar plight, I sighed, I’ve heard it before, and yet I was concerned, because he mentioned environmental work, and we were told that anyone in environmental services would be doing good in our new economy, as we pushed for a cleaner environment. That’s not necessarily so, because if the economy is so depressed that no building is going on, and no money is flowing, then no business is being done, regardless of what it is. Nevertheless, I asked him this question;
“Why is your environmental company doing poorly, it seems this is a big trend right now?” It turns out this environmental business is coupled to the real estate sector. If no homes are selling, and no commercial real estate is moving, what’s a guy to do? The reality is that Real Estate will come back, what are the cycles there; 10-years or so? You have to admit Arizona had a great run!
Quite impressive, I was blown away with the growth there, and at the top of the market I watched projects like Trillium and others completely change the landscape, heck it looked like Case Grande to Buckeye was going to be solid civilization along I-10. The projects of Anthem and others like it were equally as stunning with regards to residential real estate.
Heck of a market there, of course when that bubble burst it took down the fast movers hardest, you should be lucky you are not in Las Vegas or Florida? Ouch. We must expect boom and bust cycles, and business cycles, and sector rotations in various industries from time to time, that is the nature of things; that is the nature of business.
No, that doesn’t make it feel any better, and it certainly doesn’t make anyone happy who cannot stay in the money flow of a job, career, or profession, but it is the way of things. It is my belief that the city of Phoenix, and the Greater Phoenix area will return to power, it’s just going to be slow going right now. Please consider all this.