Bill Morris: Let the market heal!

Let the market heal!

I wrote several days ago about the effects of two rounds of homebuyer tax credits:  how much they distorted seasonal demand, and how difficult it is now to predict how long the post-incentive lull will last:

Tax Credits End, Sales Slow Down -- Surprised?

Today, an article from the Los Angeles Times appeared in the Austin American-Statesman:

Despite the government's best efforts, the housing market remains mired

It includes discussion of whether/how the government might continue trying to help, but as I ended my post on the subject (Stop helping!), this article concludes with excellent advice:

"Leave housing to market forces, let prices fall until buyers are motivated to come in, and hope that the economy can stand one final cathartic wave to clear the excesses of the bubble."

This seems completely obvious to me, but then I have argued against these tax incentives since the very first rumor in 2009.  With very rare exceptions, markets are inherently smarter than the bureaucrats who seek to control them.  I have no doubt that the more the government tries to help the real estate market, the longer and deeper this downturn will be.  Let's just let it be.  This too shall pass! 

Bill F. Morris, ABR, CRS, CDPE, e-PRO, MBA
RE/MAX Capital City
Call or Text:       512-785-3345
Toll-Free:           1-800-692-8784, x 162
Email:                 
bmorris@remax.net
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Comment balloon 3 commentsBill Morris • September 07 2010 05:34PM

Comments

Hi Bill,

This is the only sure way to heal the economy.   Sales are low in my neighborhood and foreclosures have dominated the market. We are seeing a new wave of foreclosures on the market this week.  I look forward to the progress, but it has been a slow go!

Posted by Jennifer Pirkle, Dahlonega, Dawsonville, Cumming, GA (Harvest Realty 678-617-0715) about 9 years ago

Bill - I have to say that I agree with you.  Once the tax credit expired it was almost immediately that the buyers stopped calling.  I think a lot of them are waiting for the "next tax credit".  I agree that usually that the government trying to help just makes things worse.  And after all , where is all that money coming from to provide those tax credits?  

Posted by Jim Patton, Realtor - Stanislaus ,Merced, San Joaquin Counties ( Aspire Home Real Estate 209-404-0816) about 9 years ago

Bill,

I agree.  The more they talk, the longer it will take.  Throwing money out to solve problems when you are already in debt, never works.  Sounds to me like, they need a Coach, to teach them budgetting. Have you heard the idea about more money for the infrastructure?  Yikes!

In Connecticut, we have a millionaire running for Congress in our district.  I cannot wait to vote for her!  If she can run a business and balance a budget, to cause her to have millions of dollars, I want her in Washington, DC!

Posted by Frances C. Rokicki, Broker-Mentor,CRS (Fran Rokicki Realty, LLC) about 9 years ago

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