A Resolution: Simply Faith and Hope in the New Year

From “All Things Real Estate,” Volume 1 Issue 1

By Rey Post, Managing Editor of “All Things Real Estate” and Associate Broker, Sotheby’s International Realty

If faith is defined as “something believed with strong conviction” and hope is “to value a wish with expectation of fulfillment,” then I suspect most of you will join me in seeking a big helping of both in the New Year.

Combined with hard work, a bit of luck and the view that embracing pessimism is simply not an alternative­, then I think the stage is set for 2011 to be a better year than the one to which we have just said a fond farewell.

You’ll note that we have a new look to our monthly newsletter. On November 30, 2010 Sotheby’s International Realty acquired Santa Fe Realty Partners, bringing together the established local presence, global reach and brand recognition of  Sotheby’s International Realty and the well known performance and perspective in Santa Fe of Santa Fe Realty Partners. Under the Sotheby’s International Realty banner, our combined team of brokers share considerable optimism about the future of the real estate market in 2011.

Nationally, the Wall Street Journal reported in December that 55 economic forecasters predict growth for the U.S. economy in 2011 at around 3 percent. This kind of growth isn’t bad in normal times, but as journalist Kevin Hall of McClatchy Newspapers reports, the economy tends to grow at twice that rate when coming out of a typical recession. This simply underscores, as Hall observes, that our recent recession was worse than normal ones and with a mild recovery, the jobless rate will remain uncomfortably high for some time.

In spite of this observation, there is reason to have faith and hope that the economy in 2011 will continue to trend in the right direction which suggests that things will continue to improve in the housing market.

As evidence:

•    The Institute for Supply Management recently reported that its index of manufacturing activity came in at 56.6 for November and any reading above 50 indicates economic growth. In addition, a new survey from the Federal Reserve shows that in 10 of its 12 national banking regions, the U.S. economy is growing. ADP Employer Services reports that employment at private companies this past November showed the largest increase since November 2007. Retailers report that 2010 holiday sales were among the strongest in many years.

•    Fannie Mae, the secondary mortgage market lender, recently released the second installment of its national “2010 Own-Rent Analysis” and reports that despite the housing crisis, Americans maintain a strong desire to own a home.

•    The tax relief package passed by Congress and signed into law in December by President Obama contains provisions that, among other things, should have a direct stimulative effect on the economy. As New York Times journalist Jeff Sommer reports, “Besides extending jobless benefits to the long-term unemployed, by cutting the 6.2 percent Social Security payroll tax, net savings of up to $2,136 for each worker should be realized in 2011.”

•    Survey results by RISMedia show home builders around the country are pointing to an uptick in business in 2011. Many see the following as trends to watch for in the New Year:

– Home building in close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet new buyers (sounds like Santa Fe!)

– Jim Chittaro, president of Smykal Homes predicts that the idea of a home as a short-term moneymaker is gone, “…when people do buy in 2011, they’ll do it with the intention of staying put for closer to 10 years rather than two to three.”

–  Not only will new homes be more “green” in their design and the features they offer, but they will also be healthier in 2011 (enhanced in-door air quality, low VOC paints/adhesives and all-around healthier materials). In addition, with the average size of new homes decreasing for the first time in decades from 2008 to 2009, there is general consensus that this trend will continue in 2011.

Perhaps the spirit of faith and hope in 2011 is best exemplified by a recent quote from incoming chancellor of the New York Public Schools (and former head of Hearst Magazines) Cathleen P. Black: “I’ve never been afraid of people who say something is never going to make it. If it’s got the right investment and the right market, it can make it!” If I had to make a resolution for 2011, it would be to suggest we take Ms. Black’s positive perspective and make it our collective mantra for the New Year.

So, until next month (and for the rest of 2011!) I wish you good luck and fortune in “ALL THINGS REAL ESTATE.”

Thank you!
~ Rey Post, Managing Editor of “All Things Real Estate” and Associate Broker, Sotheby’s International Realty