The Big Short is a movie that’s due in theaters on Christmas Day. It stars Christian Bale, Steve Carell, Ryan Gosling and Brad Pitt. The movie is based on Michael Lewis’s 2010 book entitled “The Big Short: Inside the Doomsday Machine“.
Some of us in the real estate industry saw the impending collapse of the real estate market happening in slow motion but most of us didn’t lose millions or, alternatively, make millions of dollars on the banking industry’s collapse. Some guys on Wall Street did lost or made billions. I hope the movie does a good job in showing the highs and lows of that time through the use of foreshadowing. Maybe they licensed the Jaws theme?
Personally, I remember two properties in particular wherein the imminent market crash was immediately affecting the potential sales of properties that I represented.
- 30 Julian Street, Dorchester – I was the listing broker of the newly rehabilitated three-family. It was early in 2006 and the buyers wanted to back out of the purchase of 30 Julian Street, Dorchester but their mortgage contingency had expired so the seller had the right to their sizable deposit. I knew that I would never be able to get the same amount of money for the seller if we had let the buyers out of the agreement. This was the one time in my real estate career where I advised the seller to threaten the buyers to either close the deal or risk the loss of their deposit. We eventually ended up getting $525,500 for the property. The buyers lost 30 Julian Street to foreclosure in 2007.
- 45 Temple Street, Mattapan – I was the listing broker of the newly built townhouses. The developers were getting upset with me because the units weren’t selling after being on the market for longer than they had expected. The developers were pointing fingers in my direction but I knew that the market didn’t feel quite the same. I had to dress down the developers because I was working extremely hard on getting those condominium units sold. I was pissed. I had to show them that the market was in the early stages of collapsing. They didn’t believe me at first but then I think the reality set in with them. This happened during the late winter and early spring of 2006. The two townhouses ended up selling for $365,000. Both owners still own their units and should do just fine if they were to decide to sell them today.
The market, as we all now know, collapsed shortly after the sales of these properties.
I’m going to go see the movie. Are you?