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March 07, 2008

Is it Time for Some Tough Love?

Housing, Bank Troubles Deepen

We've all seen and read the news... Foreclosures have hit an all time
high, home sales are slowing and property prices continue to slide...

No getting around it, things are a mess... Now the government is
coming up with endless plans to slow foreclosures, keep folks in the
homes and, without saying so, prop up housing prices.

Consumers spend when they feel wealthy, and nothing makes a consumer feel
better about finances like rising home prices.

But I am a firm believer in free markets and Darwinism so I wonder should we
be rescuing the housing marketing? Because isn't the government interventions
really just a short term solution that will do more harm than good?

Part of what brought the government involvement, not only in San Francisco,
but elsewhere was that housing prices were at the point were more buyers were priced
out... Yes, adjustable rate mortgages take some of the blame, but it
was buyers desperate to make any deal to get into an overpriced home
they thought would never go anywhere but up....So now prices are
falling... Whether that's through foreclosure or short sales, it seems
it's the market's way of naturally correcting itself.

So I ask you, does the real estate market need a hand out or a does of
tough love?

Posted by Jeff Brooks on March 7, 2008 10:04 AM | Permalink

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