Real Estate News and Market Moves Week 46

In this week’s blog, I am turning it over to Cole Thompson, Asset Manager at Auben Realty, Partner/Principal at Auben Capital Partners and President of Auben Development. He uses his 25 years of experience to offer insight on the parallels between the market during 2007-2012 and today’s market.

 As a seasoned professional in the residential construction and development industry in the southeastern United States, I have witnessed firsthand the rollercoaster ride of economic ups and downs over the past 25 years. Reflecting on the similarities between the financial challenges of 2007-2012 and the current market conditions of 2024 sheds light on the resilience and adaptability required to thrive in this dynamic landscape. 

During the tumultuous years of 2007-2012, the southeastern US, like much of the country, faced unprecedented financial turmoil. Mortgage-backed securities were not a common household term, yet the collapse of the housing market and the onset of the Great Recession sent shockwaves through our industry. Consumers were left reeling from plummeting home values and credit markets tightened. Homebuyers struggled to secure financing, while construction companies grappled with stalled projects and diminishing demand. In these pressures, we saw the consolidation of the American Household. By this, I mean multiple generations under one roof. We must not forget the impact of gas prices, post hurricane Katrina. In the Charleston, SC and Columbia, SC MSAs (Metropolitan Statistical Area), it was business as usual until Hurricane Katrina. It was like a lever was pulled on purchases and buyer confidence. It was a scary time to say the least. When you look for advice and 40-50 industry veterans cannot help, it is a lonely place.  

Fast forward to 2024, and while the economic landscape has evolved, echoes of those challenges persist. Today, consumers continue to face uphill battles in securing affordable housing and navigating the complexities of mortgage lending. The ripple effects of global events and economic policies reverberate through our region, influencing interest rates, inflation, and housing affordability. With this uncertainty, gas prices are once again on the rise as inventory numbers plummet in secondary and tertiary markets.  

However, amidst these challenges, there are also signs of resilience and opportunity. Developers and construction companies have adapted their strategies (Build for Rent), embracing innovation (light gauge steel construction) and diversification (new product types) to meet changing consumer needs and market demands. Collaborative partnerships and strategic alliances have become paramount, enabling industry players to weather the storm and emerge stronger than ever. 

As we navigate the uncertain waters of 2024, it is essential to draw lessons from the past while remaining agile and forward-thinking in our approach. By staying attuned to market trends, leveraging technology, and fostering a culture of adaptability, we can position ourselves for success in the face of adversity.  

In conclusion, the parallels between the financial challenges of 2007-2012 and the current market conditions of 2024 serve as a powerful reminder of the cyclical nature of our industry. By embracing change, fostering resilience, and maintaining a relentless focus on innovation, we can overcome even the most formidable of obstacles and continue to build a brighter future for our communities in the southeastern US.

Cole Thompson is Partner/Principal at Auben Capital Partners, Asset Manager at Auben Realty and President of Auben Development. As the Asset Manager at Auben Realty, he oversees the sales strategy and operations for a growing portfolio of residential and commercial properties in all of Auben’s markets. Cole has more than 20 years of experience in the real estate industry, with a proven track record of delivering results and exceeding expectations.