John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... The New York Times on Sunday had an article titled Housing Woes Bring a New Cry: Let the Market Fall.
The article notes that after trying just about every way possible to stimulate the housing market, maybe it is now time to try the opposite strategy. In short, let the market crash.
Mike Rinner, of the Genesis Group, and Byron Koste, the emeritus executive director of the CU Real Estate Center, on Monday made similar points to me. They both would rather see the market recover on its own, without more government stimulus. Jeff Bernard, of Bernard Analytics, however, argues that the government spending programs, such as the expired $8,000 tax-credit program for first-time home buyers, and most recently, the $14 billion plan to help homeowners who are “under water” – that is, whose loans are worth more than their homes – do work and should continue.
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John:
Your question is presumptuous. Why are you assuming the housing market will fall? I see plenty of interest and demand, but all we get from the seemingly endless supply of media, experts and consultants is negativity and doom and gloom. None of them have any more idea of what will happen in the future as anybody else, but a sure way to influence what does is with this constant nonsensical beat down that has been going on now for almost 5 years. It’s time to stop.
I agree Steve. Gone are the days when media etc. was in the business of reporting the news, now they sensationalize it for entertainment value and to stir up controversy. Real estate markets are locally driven yet national media lumps every region in with the poorly performing ones. Argh we are doomed, the sky is falling – kind of a self fulfilling prophecy when generating a mass panic. There was a recent blog post on this site putting prices up 4.2% across 20 MSA’s.
You both hit the nail on the head. Catastrophic scenarios are simply selling well and people in media know that. And what’s the result? Thousands of potential buyers being scared away from the market, eventually deepening the crisis even more, preventing it from restoring its health.
LET the market crash??!!?? HELLO!! Anybody home?? In some parts of the country (Florida) for example, reports are stating that real estate prices have fallen 60%-70% from their peak. Isn’t that a crash!!?? And that in spite of the miserable failed attempts from the Feds. First, disband Freddie Mac and Fannie Mae and let banks actually have to eat their own bad loans. Bingo, we’ll be back to the days you could only qualify for a mortgage if you…..well, qualified! What a novel concept!!
@ellie, bruce & steve, really??? Let’s not try and spin this for something it’s not. The market(although depressed) is still over priced for most people in most areas. This market has been artificially propped up and sooner or later we will have to pay the piper. You all sound like over optimistic realtors! I can’t stand your kind! Buyers are not scared away by media! They are scared away by the lack of affordable housing!! By the way, I am a broker… Bruce, prices are only up in those MSAs because of worthless government intervention! WAKE UP!!!!
There will always be activity in the real estate market, however, we got into this mess by being untruthfull, (lying) and we will only get out of it by telling people the truth. It may be painful and it might be lengthy, but it will happen with or without government interference.