Where We Are Now: May 4, 2020
Work From Home — Day 49
Never Bet Against America
The first 45 days of SIP were mentally and emotionally demanding on me; Friday, May 1, 2020 was somewhat transformative. Friday represented two breakthrough events. We completed the second re-forecasting of our business, and it was day one of our ability to safely and cautiously show properties.
From all my listening posts this weekend, the relaxed showing guidelines have brought tenacious buyers out of the woodwork. Is this demand a function of our previously constrained buyers and sellers? Is the demand from new buyers and sellers who realize after SIP they live in a home they do not particularly enjoy? Time will tell.
This renewed activity and the closings in the next 20 days will define our markets for the spring and summer months. Please remind your sellers, it’s always better to set the comparable sales vs. react to them. Move on bids now and set the comparable sales vs. listing in June or July when the delayed spring inventory may join the market.
As a foreshadowing of our new business outlook, our forecast for May closings is up 100 percent from our previous forecast. More details this afternoon via the Closing Bell — Pending, New Escrows, and Closing Report. This business confidence lifted my spirits in a meaningful way. Friday late afternoon, I was out on San Francisco Bay and enjoyed some relaxing time — away from it all!
On Saturday, I listened to the 2020 Berkshire Hathaway Annual Meeting. It’s long, it does not move fast, but neither do most investors that are 89 years old. Warren Buffett was simple in his schooling and advice. He shared his perspective dating back to his birth. Of course, his perspective has always been long-term.
He must have said five times “Never Bet Against America.” The fortitude of America has a stellar track record. He advised against using debt or margin to invest in equities and to look at equity investments as long-term partnerships, not daily trades.
He likes the S&P as an indicator of future earnings (he does not invest in indexes), and is certain equities will outperform the 10-year treasury. Fascinating perspective in the middle of this crisis. He will continue to invest over 10 to 20-year horizons. Amazing for a legend 89 years old.
Residential real estate in California went into SIP healthy and strong. I expect our financial sector to lead the path forward.
Details via the Closing Bell including our updated Curve chart for year-end 2020.
This is Where WeAre Now.
Mark A McLaughlin