Posted by Leonard Steinberg on June 3rd, 2012
I had lunch the other day with a REALLY successful, wealthy guy who pretty much has his pulse on the planet, especially financially. Out of this conversation I extruded good news for the luxury market in Manhattan. His belief, as is the belief of many, is that the high end real estate market will continue to grow, more so than we could even anticipate. With technologies making commerce much more efficient, the concentration of wealth into the hands of the wealthier ‘controllers’ seems inevitable. These efficiencies allow for much smaller companies to make sizable profits, without the need for large, costly staffing and physical infrastructure.
My clients big complaint was how the sense of pride in so many workers seems to continue to fade, and the sense of entitlement without it being tied to performance is sometimes astounding.
Unions have done a great deal of good for sure, but they have also fueled some really bad attitudes amongst many workers that encourage ownership and management to replace them with machines. Or send their jobs to other states and countries. How many cars are being manufactured in North Carolina and other states besides Michigan? Did Michigan’s unions become so extreme that they self-destructed the industry they were protecting?
In a global economy that is instantly inter-connected, some things can be easily shifted and replaced that in the past were unthinkable. More efficient companies, with a growing global economy will lead to much larger profits.
While the economic figures released last week were disappointing, the chances of gas prices dropping as Iraq starts pumping more oil may be the only good news for the short term and could help significantly for the average American trying to make ends meet. Second quarter earnings are certain to disappoint too, but who measures an economy only quarterly to get the big picture?
The system is a bit cruel, but it is what it is and it will only be modified slightly over the near future. The concentration of wealth is here to stay for a while, and the wealthy sector will grow significantly over the next 10 years. Their demands on quality in real estate will grow significantly too……so those developers who actually deliver A-grade quality will be handsomely rewarded.
Tags: Economic news