The Cure for Our Ailing Housing Market? Send It to the Bottom!

The Cure for Our Ailing Housing Market? Send It to the Bottom!

            Kudos to Uncle Sam. He’s bound and determined to lift our ailing housing market out of the stagnation pit. Great. We all want to see that. But I say, the government’s approach is way off. In fact, it’s actually prolonging the agony. Believe it or not, Washington interventions are delaying full recovery of the Laguna Beach Real Estate market, not to mention the nationwide market. Trust me, the recovery would happen much sooner if Uncle Sam stepped aside and let nature run its course.

What I propose is to let the Real Estate market sink straight to the bottom. That’s right. All the way to Davey Jones’ locker. I’ll elaborate on this outrageous pronouncement in short order. But first I want to put things in perspective. So here’s a snapshot of the current marketplace madness:  

4.5% of all mortgages are mired in foreclosure. To help owners of distressed properties, the U.S. government has implemented a number of measures. Two of the biggies are – the Troubled Asset Relief Program, and HAMP (Home Affordable Modification Program).  Unfortunately, both of these two well-intentioned programs are failing miserably in their missions. You see, only a small fraction of deserving homeowners are receiving needed assistance. But even worse, there are just enough people getting help to slow down the market’s natural price drop. The market is still going to sink further, mind you. Only now it will take longer to reach this level.

Here’s why this is a major problem – the market really won’t bounce back until it hits a natural bottom. But, as said above, the limited government assistance is filling the market stream with just enough cash to delay the drop -- and therefore, the recovery.

The only way to launch a real recovery is to accelerate the hell out of the inevitable market drop. Let those prices plunge, baby!

“Well, Hillary,” you’re asking. “How do you propose to do that?” With a little common sense, my friends.

First, get that clutter of distressed inventory clean off the market. It’s clogging the recovery pipes, big time. Loan modifications? Fuhgetabout ‘em! What banks really need to do is unload these properties at bargain rates. Then watch prices nosedive across the board. Sounds harsh. But in the long run, it actually will be a blessing, whether you’re looking for a Laguna home or one elsewhere. You’ll see.  

The banks also should return the boatload of cash donated by the government. With all that greenery back in Uncle Sam’s hands, he could rain money on the private sector. Now that would be an economic stimulus!

Once the marketplace hits the pits, grab a front row seat and watch the action unfold. Bottom feeders will swarm in from every direction, gobbling up bargain after bargain. Believe me, there are plenty of cash-rich folks out there just waiting for the right moment to strike. And the moment will occur one second after the market bottoms out. Ultimately, this frenzy of activity will freshen up the marketplace and trigger a sales boom. Remember what happened to Apple stock?

So what do you think about my outrageous proposal? Good, bad, indifferent? Feel free to fire off a reply. No matter how juicy. I’d love to hear from you.

And, of course, I’d love to hear from you with any questions about Laguna Beach homes.  Even though the market still has yet to bottom out, there are plenty of bargains to be had. If you’re ready to discover the many opportunities here in the Laguna Beach Real Estate market, I’m ready to help.Feel free to connect with me at 949.922.8490 or hillary@thecoastalpropertyexperts.com.

Until next time, keep it classy, Laguna.