Are We There Yet?

December 30, 2010

I just did a quick review of my postings since 2006 for the last week of December. It was enlightening to review the observations on the year just ending and the hopes for the year going forward. In 2006, there was a feeling that the bubble had burst. In 2007, 2008 and 2009, there was the hope that the market was no longer deteriorating. Some of these posts were truly interesting. If you can, you might look them up.

For this ending of the year 2010, Dorothy's comment in The Wizard of Oz seems fitting, "Are we there yet?"

To answer this question, one would need to define "there". Where is it that we would like to be? Back in the irrationally exuberant boom? Probably most of us would like to be in a stable economy with continued low interest rates, prices that are somewhat better than a year ago and a decline in the rate of foreclosures. If the latter is "there", we are not yet "there".

In reflection, it seems that 2010 was a "teaser" year. One month the market improved. The next month it deteriorated. Up/down/up/down. Hence my description of the real estate market as "bouncing along the bottom". Not doom and gloom - just a market in the process of adjusting to the new financial environments.