NJ Liquor License Sale Breaks Previous US Record Price Of $1.2 Million But Is the Bubble About To Burst?

On June 28, 2006 a liquor license sold for $1,500,000.00 in Cherry Hill N.J. setting a new US record. Some say the sale marks a frothy top in this clandestine, little known market that won’t be repeated for many years, if ever.
 
When a local business opportunity agent asked my opinion about the soaring prices of liquor licenses I replied that the so-called ‘investor’ will probably never get his money back. When the agent asked me why I felt that way I told him that, in my opinion, the price for which it sold, $1.5 million dollars, was based on the ‘Greater Fool Theory’ and pure speculation. I told him that the price bubble was about to pop.
 
          For the last several years liquor license prices in many states have been hitting record highs but, like the real estate market, cracks are starting to show up all around the country.
 
According to many license brokers the increase in the price of liquor licenses has been tied to rising prices in real estate. Now, with that market cooling down, many in the industry are predicting that license prices will follow suit.
 
I’m advising my clients who can wait to be patient. Based on the volume of seller calls we’re receiving, lower prices and a buyer’s market are just around the corner.
 
If I’m right, somebody in New Jersey is about to have the mother of all hangovers.
 
 
Jon Mejia can be reached at 800-711-2114 ext 350. You can also visit The American Liquor License Exchange’s web site at www.Amlex.com