Can you believe another year has gone by – again! As you already know, 2007 was one wild roller coaster ride in the real estate marketplace. The first part of last year took off with a bang, especially in the upper end housing markets. By summer, the initial warnings about the soon to come sub-prime fiasco took the market in a different direction. From August on, homes sales have slowed.

The strength of any real estate cycle is dependent on how consumers view their long term economic future. Given the amount of uncertainty and volatility in the equities and bond markets, the blows delivered to the financial sector and the unrelenting barrage of negative media, current market conditions are no big surprise. This economic perspective is due in part to the disappearance of easy qualifying financing and the significant appreciation of real estate values.

Good news is that homes are still selling, but at a much more muted rate. This is actually typical for this time of year. Multiple offers are becoming a thing of the past and buyers are less willing to go over list price. High-end buyers are still purchasing homes, particularly in the West and North Bay areas.

According to Laurence Yun, chief economist for the National Association of Realtors, 2008 will be a year of opportunity where there will be serious, healthy business. Furthermore, Yun predicted that the market returns to normal by 2009. In fact, nationally, 2007 was the fifth best year ever on record. So it’s actually a lot better out there than the media would have us believe.

Happy New Year from The Harrison Team! We’re toasting to you and to a peaceful, healthy and prosperous 2008.