"We're not really in a 'credit crunch.' I think we're in a 'confidence crunch,'" said Zell, funder of the Samuel Zell and Robert Lurie Real Estate Center at Wharton. "I would argue the excess liquidity that existed eight weeks ago still exists today. It has a different risk premium on it, but the actual amount of liquidity has not changed."
Zell said the slump should come as no surprise: "Over the last three years, people were flippant. They bought anything they wanted and were proud that they didn't do due diligence. I think they have all been chagrined and are scared out of their minds."Bingo.
Sam also made me think about some things. Maybe I am overexuberant about real estate. It is what I do, after all. But "looking around the corner" is what sets the big boys from the others. And as a lawyer that is an especially important thing to keep in mind.