Economists (and other people smarter than the average politician) are starting to make noise about government spending to jumpstart the real estate market, and the economy in general.
Did you see the article this weekend in the New York Times? If not, here’s THE STORY.
The dilemma: More government intervention in an attempt to revive the housing market? Or sacrifice now for a quicker recovery? After billions spent by the Obama Administration to jumpstart the economy, with few results, number crunchers are calling on lawmakers to lay off and let it crash.
Last week, HUD Secretary Shaun Donovan told CNN the administration might consider another home-buyer tax credit to get the economy moving. Even though the last tax credit prompted existing home buyers to simply purchase earlier and didn’t create the expected influx of new buyers. The White House shot down Donovan’s idea as untenable, but isn’t that how these things tend to get started? Fly that trial balloon to see which way the public winds blow?
The White House says it’s got enough to handle right now just trying to launch the billions of dollars worth of stimulus programs that have yet to be rolled out.
Economists say such programs in fact simply elongate the misery. They say the economy needs “shock therapy”! Essentially, get to rock bottom sooner in order to begin the arduous climb back up.
What if the market were allowed to correct itself? Could it really be any worse than it is or has been thus far? We’re on track for more than 3 million foreclosure filings in 2010. The number of home sold dropped more than 25 percent after the tax credit expired. There quite possibly are 3.5 million homes in shadow inventory (depending on whose opinions you subscribe to). And we haven’t reached the peak yet — 5-year option arms don’t finish resetting until September 2012.
All this despite billions and billions and billions and billions spent to artificially prop up the real estate market. Kind of reminds me of those two guys in the movie “Weekend at Bernies.” You can put sunglasses on it and tie a string to the wrist, but on Monday, the guys’ still dead!
Can programs like those we’ve seen truly change the course of a world economy, or are they just arrogant attempts to manipulate that which cannot be manipulated?
At what point should the free market be free?
(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly atBrian@DreamBigRealEstate.com.)
Brian Bean
Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com
Short Sale Genius Elite
I’ve been specially trained to negotiate short sales with an emphasis on Deficiency Waivers
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