RIDING OUT THE REAL ESTATE ROLLER COASTER IN 2008
One of my fondest childhood memories was riding the classic wooden roller coaster at Steeplechase Park in Coney Island. My sister and I would run as fast as we could in our blue or red Keds to beat the crowds and maneuver ourselves so we could ride in the first car.
I remember the thrill of climbing up the long, steep hill and never tiring of the "clap clap" sound the car made on the wooden frame. The view from the top was breathtaking for a 12-year-old who thought she was on top of the world. Once the car started its quick descent, I screamed my lungs out and braced myself for what seemed to be a bottomless pit. But alas, it wasnít, and once I brushed the hair from my face, I knew the best part of the ride was over. All I had to do now was hold on tight for unexpected twists and turns and occasional bumps along the way to the end of the ride.
Somehow this story reminds me of the real estate market. We had our ride to the top in business at the beginning of the decade, there was a quick descent in 2006, and now we are enduring the long ride to the end so we can start the ride back up again. Just as the avid amusement park junkie delights in the best part of the ride and is bored, even annoyed by the need to ride out to the end, so too are we, as we wait for this ìdown marketî to end so that we can start uphill again.
The question is: how long do we have to suffer through these nauseating bumps and sharp turns until this never ending ride is over?
The pessimist and doomsday predictors say the worst is yet to come; the optimist and realist say the worst is behind us. I prefer to make my own predictions based on common sense, hardcore data and market fundamentals.
2008 will be an interesting year. The subprime foreclosure mess will continue, especially in overbuilt markets such as Miami and Las Vegas. The Federal Reserve will work overtime to balance the need to fight inflation, while keeping the threat of a recession in the wings. The pent-up demand for buyers to buy and sellers to sell will hit a peak, and, in some markets such as ours, the real estate roller coaster will once again begin its climb.
So in 2008, I will follow the advice of one of my favorite actresses, Bette Davis: "Fasten your seats belts; it’s going to be a bumpy ride"!
Christine M. Todd, CAE,
RCE
Chief Executive Officer, NVAR
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