Bob's Thoughts About Everything

The balloon may have popped. The bubble may have burst. The high flying jet may have crashed. The analogies that describe the real estate market since the end of 2005 are numerous and colorful. But there's light at the end of the tunnel.

I am always amazed at the myriad of analogies that surround real estate. If you listen carefully, you can hear the trends just by paying attention to what the media reports in their headlines and articles.

Today's Wall Street Journal reports "Don't look for the housing market to improve until the daffodils bloom next Spring." They end the article with a quote from James Glassman, a managing director of J.P. Morgan Chase & Co. who said, "The wheels aren't coming off the wagon." He reported that the current quagmire is due to creditors overreacting to the subprime mortgage crisis. He also reported that overall, the American economy is sound and the crisis will eventually subside as credit becomes freer and home prices stabilize. None of that would have been as clear unless he used the wagon wheels analogy. Ending a doom and gloom with a positive analogy was beautiful. Thank you Mr. Glassman.

I am writing about this because I heard the perfect current real estate analogy yesterday. It describes what I am seeing in the Phoenix Real Estate market recently. The current market was described as a few green plants  poking through the burned forest floor.

As I discussed this with some buyers yesterday, they expounded on the analogy. They feel that the burning of the forest was needed to control the overgrowth. They understand that the market will be so much healthier now than before. The government is providing some fertilizer to promote this new growth. The media tends to throw a shadow on the new plants which doesn't allow the sun to give the appropriate nutrients for growth. The public is out there with their weed-eating tools trying to make sure they don't buy a bad plant. And the real estate agents are praying for more rain.

Without the protective ground cover, we are all weary of a flood. As the Wall Street Journal reported, the Daffodils will eventually bloom. Let's all hope and pray for a full double rainbow at the end.