Monday, September 22, 2008

Could the Goverment Take an Interest in Housing Prices?

This morning I read a saucy article about the United States of France online at Time Magazine. It got me thinking about another angle to the looming mortgage, banking, and finacial crisis facing our country. (Why is everyone so suprised by the way. This was thouroughly predicted and reported on by NPR four years ago.)

As the title of my blog would suggest, could the sudden vested interests of the Federal goverment into the debts of major financial institutions cause those number crunchers in WashingtonDC to reconsider the free market of home buying. Could home prices fall under new legislative considerations and be held back or cranked back by a goverment unwilling to over see so many $300 thousand plus loans issued in so many regions of the country.

Will residents of Los Angelos, California or Rockville, Maryland see home prices held down and let the renters of the world finally by in. I suppose it is possible. Of course right now the powers that be will probably declare that we are all free to buy and sell homes as we choose for what we choose. The bottom line however is that in less than a decade regulators in govermant and official at banks will have swapped chairs enough times that none of the will be sure who to route for. With the taste of financial colapse still lingering on their tougues mortgages will start to control the markets. Don't believe me, call a realtor and ask how business is going these days. The likely answer will be lousy, lousy because even though there are buyers, no one will issue mortgages these days, and the local house prices don't mean squat if no one is buying.

Think your house is worth $400,000 after a nice renovation? Think you bought a house in a solid community, with a easy commute, good schools, nice parks, and a high number of police residents coupled with extremely low crime? Sure you did, and you made a smart move, but you won't be able to upgrade or retire right now. The fantasy that you house can get roughly three times its value over ten years ago is gonna be a rough pill to swallow.

Current home owners, especially recent home purchasers are going to suffer. New home buyers, if they can scrape together a down payment and loan stand to benefit enormously from this market. Of course few have been able to find two quarters to rub together in my circle.

Another thought for us all to chew on is how does the increasing financial pressure effect families with stay at home moms? I guess I'll chop that one up next time.

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