I just returned from our national network conference, Leading Real Estate Companies of the World. We comprise the greatest share of real estate sales in our association of excellent independent companies, exceeding all franchises. Although the focus of the conference was mostly on residential, a few things were clear in the commercial arena.
First of all, we are all using less space. I sat next to the manager of a huge company, who told me that they saved 40% of every rent dollar over the past couple of years. Every time they had a lease come up for renewal, or they had a chance to renegotiate, they paid 60% of what they were paying before. Sometimes that meant that they took 60% of the former square footage; sometimes it meant that they just paid 40% less for the same space. And we aren't the only industry seeing those trends. Everyone (except, apparently, Yahoo) will be using less office space per employee in the future.
We also saw that money was being made through cutting costs, more than from increasing profits. Margins in our industry are notoriously low, but most of us had very good years. Most of the people I asked said that they made more than half of their bottom line from saving money, with the balance from an improving market. Again, we are not alone in this statistic, either.
Finally, it was obvious that Connecticut is lagging in this recovery. Other markets have switched over to being sellers' markets, with homes getting as many as 50 offers, due to lack of supply. We haven't seen that yet--our averages across the board are closer to a year. That puts us in a very different selling climate in residential, and it tells you that we don't have the jobs here to stimulate housing demand. We certainly can predict, however, that it will improve here, especially as workers transferred in sell their houses elsewhere, often for high prices. Good things come to those who wait.