So, how do we feel as we ponder the year that is passing and the new one ahead? Our mood may depend upon our relationship to the big story. That big 2006 story is about the residential real estate marketplace, which has widespread impact. Descriptions have included "slowdown," "downturn," "bust," "catastrophe" and-most aptly-"correction." Most knowing people consider our current situation a much-needed adjustment. Prices and activity were growing at too rapid a rate. So here we are in what clearly is a short-term negative situation, but most likely will not be a long-term one.
Disappointingly, so many of us have become short-term thinkers looking for instant gratification, expecting immediate sales and profits. The voices of doom-and there are those voices-will characterize our current residential real estate situation as nothing but gloomy. Gloom can be contagious, but intelligent optimism can be more so. Not Pollyannaish optimism, but cautious optimism. The facts of the current situation are readily evident, but the cause seems less so. Stepping back and putting this marketplace into perspective might affect attitudes.
The New York magazine cover story in October was How to Navigate the Finally Turning But Wacky & Confusing, Upside Down Real Estate Market. The operating word in this article is "finally," inferring that it was expected after so many boom years, which it was. As it should have been here.
Also in October, Donald L. Kohn, the Federal Reserve's vice chairman, was far more sanguine than the doomsayers, labeling the current marketplace as a correction. He went on to say, "The reported declines in house prices in a number of areas should help facilitate the rebalancing of supply and demand in those markets." Mike Moran, chief economist of Daiwa Securities America, went further by accusing certain media of overly dramatizing what is a normal and long-predicted cyclical rebalancing.
And while some realtors and builders have cut their image marketing, hunkering down with low profiles, others have wisely continued to strategically position themselves to buyers and sellers. When robust real estate activity returns-which it will-these long-term-thinking marketers will benefit by being top of mind with consumers. Yes, there are immediate cash flow issues-and I'm not being cavalier regarding the challenges facing realtors today-but perhaps there are overriding future revenue considerations.
Sondra Guffey, vice president of communications and marketing services for LWR Communities (Lakewood Ranch), said it perfectly: "There may be a real estate slowdown, but we're not showing up." We need more of that optimism as we transition into 2007. Positive thinking, creative solutions and progressive action can help us successfully navigate through difficult or challenging times. Isn't our long-term success dictated by how effectively we deal with change and the ups and downs of our respective marketplaces?
Here's to reflecting on this past year from the right perspective and feeling cautiously optimistic about this next one. Happy holidays and best wishes for a healthy, fulfilling and successful 2007.