Thursday, March 01, 2007

Oh, those Ups and Downs

Inevitably, the big story of the week was the largest drop in the stock market in nearly six years, when the Dow plunged a teeth-grinding 416 points in a single day. Shocking? Yes. Unexpected. No.

Most of the time the numbers don’t lie – but it’s always healthy to look at the big picture before jumping out a window. For instance, this huge drop has to be viewed as a single shockwave from huge mood swings in the Asian market, as opposed to the beginnings of a recession. Not to mention, the overall trend of the past five years has been one of confident, positive climbs. One bad day a depression does not make.

But that is the nature of markets – of all kinds. Highs, lows, sudden drops, huge gains. Until this week, the real estate market has been the economic whipping boy du jour. With so many analysts adopting the doom-and-gloom outlook on the housing crash, more than one investor (or homeowner) has begged the question, “Did we hit bottom yet?”

My answer: yes.

Bubble burst, dramatic slowdown, necessary economic adjustment – call it what you will. The truth is that the market trend is improving and many of us see clear skies on the horizon.

Speaking of clear skies, I told my friend and partner, Jim, as we looked out the window on a perfect Seattle day, “The suns shining, I guess people will come out and start buying houses again.” He laughed. Now the rain and snow is back again – and so will the buyers be back.

Yes, maybe weather has a slight effect on the real estate market. So do mortgage rates, macro and micro economic hiccups, inventory. But if you ask me, the two major factors that influence the market are employment and interest rates. No matter how many beautiful homes are out there, no matter how strong a buyers market, no one will feel safe buying their dream home without a solid job market.

And that’s one of the reasons I have hope. Overall the economy is strong. Jobs are growing – and in new and exciting areas. Investment in high tech innovation is growing across the country. New companies are competing in arenas never before tapped. Bright young minds are pushing US economics to new heights.

A friend of mine confided in me his worry after losing his job with a local company due to a merger. Within a week he had two solid job offers. The next time he consulted with me was to discuss which of these amazing offers he could afford to let go.

The big players are reawakening and with them the real estate market will follow suit.

So once again I am bullish on the market – especially here in Seattle. A neighbor of mine told me about multiple offers she’s received on her property in Queen Anne. New developments are popping up all across the area. Jobs are plentiful, money is ready to be made, and maybe – just maybe – we will see some sun peeking through the clouds.

As always, discover the latest in IDX tools from and keep up with Seattle real estate news at


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