Patience

- Do not be desirous of having things done quickly.
- Do not look at small advantages.
- Desire to have things done quickly prevents their being done thoroughly.
- Looking at small advantages prevents great affairs from being accomplished.


Confucius
(551 B.C. - 479 B.C.)

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I am re-publishing this quotation because I think it speaks to how we should approach the coming year.

We all know that our country is in a "crisis of confidence" (to quote Jimmy Carter in 1976): consumer optimism is the lowest it's been in 50 years (source: MarketWatch) and there appears to be another big hit to take place in the real estate market place. (See my blog post from 12/16)

It will be very easy for us to "hunker down" and focus on "tiny victories" on a "day-to-day" basis. But I'd like to offer a different opinion. I remember a time in my career that I focused completely on "doing whatever it takes" to be financially successful; making phone calls, searching for new products/services, preparing competitive reports, prospecting for new vendors.

In fact, I remember hearing and living by the adage, "it's all a numbers game". According to popular goal achieving gurus, you can reward yourself each day after achieving your daily goal of cold calls, presentations or visits.

Well, I'm not so sure that works. 2500 years ago Confucius understood this. By focusing so closely on the day-to-day stuff, we lose our vigilance for the big picture; we prevent oursevles from doing our job thoroughly. We need to work together to get out of the collective situation in which we find ourselves. And it will take a LOT of work and lots of patience.

As we look toward 2009, in the light of our culture's prediliction for immediate results, I hope that you begin the year with a large picture and vision for your life and the lives of those for whom you care.

Have a safe and peaceful New Year!

Jim

Here Comes Another Bump In The Road

This chart from Credit Suisse via the IMF shows the heavy subprime resets in 2008, plus it shows the reset problems with Alt-A and Option ARM loans in later years.

Although many of the homeowners in the 2009 to 2011 reset periods will refinance (if they can), this shows that the problems in housing will linger for several years. What is especially concerning is all these Option ARM resets in 2010 and 2011. Most of these homeowners are selecting the minimum payments (negatively amortizing) and many homeowners will be upside down when the ARM resets.

Hopefully, our Northern California area will not be hit as hard as other areas of the country. But, we won't know. We need to face this challenge "head on". Talk with your clients. The professional real estate industry - in some instances tacitly, in others actively - participated in getting us into this situation. But it can lead us out of the mess we're in.

It's the right thing to do.

The Old Rules Don't Apply

A look back... September 29, 2007. The following is a segment on the Today Show. Jim Cramer and the President-Elect of NAR Charles McMillan "spar" on whether to buy a house. Mr. McMillan was KO-d.




The "new conventional wisdom" was that, as Matt Lauer says at the beginning of this clip: "Whatever happened to that pot of gold that not too long ago if you put cash into the real estate market it was pretty easy money." We can debate at a different time whether the consumer's perception of the real estate industry is shaped by segments like these or whether these segments reflect the perceptions of the marketplace.

What I believe needs to be addressed is how real estate professionals responded then (and respond now) to the "real estate market collapse". Mr. McMillan didn't really address the fundamental issue here: Real Estate was NEVER supposed to be an "investment vehicle"! The unprecedented property value increases were aberrations, NOT the norm. This type of response, as well as the availability of property data from a variety of sources has created a wary and demanding consumer that professionals in the real estate industry must address. And address them on the consumers' terms.

The old rules don't apply.