Market News January 4, 2010

Auld Lang Syne

On New Year’s Eve, a bunch of us were talking about the true meaning of that song… the one we kind of know the words to. It starts like this, “Should auld acquaintance be forgot and never brought to mind?”

We figured that may be true at times but, in general, not in our industry. It is the people we meet and serve that we hope will never forget us. And it is the relationships we cultivate and honor that actually keep us in business. From that standpoint, I’m an optimist by nature… glass half full guy. I’m not naïve, nor am I Pollyanna, but I truly believe 2010 is going to be better. I think we bottomed out in 2009. Don’t get me wrong… it won’t be a skyrocket this year, but there are encouraging signs.

  • The first-time home buyer tax credit was extended and there is a new limited credit available to existing home owners.
  • Interest rates are reasonable and lenders are lending.
  • Jumbo loans are showing signs of coming back.
  • Our own inventory of unsold homes has shrunk dramatically in the past six months.
  • And yes, homes that are realistically priced are selling.

I told a story recently to a group of our brokers about a sailing trip I took years ago from Victoria to Maui. The route takes you down the Pacific Coast, almost to the Bay Area, and then you turn right. The trip down the coast is brutal. Continuous storms, freakish winds and generally bad weather. You wonder if you’re going to make it to the turn and if you will ever see good weather again.


And then you turn and head out across the Pacific and pick up the trade winds. From then on, it’s an easy ride to Maui.

I think we are getting close to the Bay Area. We are still slogging through it and will for awhile, but smooth sailing is on the horizon.