More stimulus (i.e. use of your tax dollars to pick winners and losers; aka 'subsidies,' or 'transfer payments'). If you missed out on any government cheese, just wait; it'll all come back around again, and again... http://www.bloomberg.com/avp/avp.ht...//media2.bloomberg.com/cache/vzkvWe.yGqKQ.asf
If homes were allowed to fall to sustainable levels they wouldn't have needed the first time home buyer tax credit because they would have fallen to a level where first time buyers could actually afford to buy a home but considering the banks were holding a large inventory of homes they couldn't possibly let that happen.
The government will do "round after round of stimulus"... always with the explanation, "we have to keep doing this until the economy get traction and is self-sustaining". Problem is, the economy won't be doing anything like "self-sustaining growth" for DECADES... All of the jobs are going to Chindia. By the time the tri-weasel of Obama/Bernanke/Geithner get's it figured out, our mountain of debt will be... well, A MOUNTAIN OF DEBT.
We're just re-inflating the bubble. Next year (Q1) will be interesting.....lots of ARM's are due for rate increases, and this can easily cause another severe round of foreclosures. I don't care what the market has been doing.....still very bearish over here.
maybe this is the wrong place to post this, but considering the eventual destruction of the dollar isnt it good public policy to try and get people into homes?????
EXACTLY RIGHT. They wont just let the prices fall where they should, fu$k no, why not let prices fall where they have to, lets try and put a floor underneath housing and keep prices inflated where they should not be. IF they let the market decide where housing prices could be they would on average be 25% cheaper, but no, lets continue to stimulate housing and keep prices propped higher.
Housing won't heal up until the average home can be bought with the average wage. Considering that middle-class wages are disappearing... houses need to fall significantly further to be affordable and for the market to be sustained. But of course the thought of this terrifies governments at all levels.
i am here in phoenix, az. it is just beyond belief HOW many houses are out there for sale, in foreclosure AND houses owned by banks. the banks, have absolutely NO incentive to keep lower prices whereby the marketplace works, and investors and buyers who can afford come in and reduce the monster inventory. banks have an incentive, to keep the bad stuff on their sheets (in general) because they know the govt. will keep rolling out programs, so why lower prices even more?! orginally, the bailouts to these big banks was enhanced BY not getting ride of houses on their books! it is simple. it is going to grind and grind for many many years, more. the real question will become WHEN will longer term rates move considerably higher? 2-3 more years, down the road IF/WHEN that unfolds and inventory is still rock solid... ouch! ticking time bomb, imo.