Government, Government - Go Away
Does anyone else dread listening to the news or picking up a newspaper anymore? Every morning I wonder what new tax I’m going to be saddled with, or what new regulation will be mandated on my company.
The newest government intervention now is the interference they want to impose on the issue of the moratorium on foreclosures.
I was told from a very reliable source that no short sales after October 9th will close, even if they are under contract. I understand the banks wanting to make sure that they have their paperwork in order, but what we don’t need is the government getting involved.
The problem with government is it has the common sense of two week old road kill. Leave these decisions to private enterprise. I’m sure the banks will find a way to help out the homeowner who was making his or her payments until they found themselves unemployed, but to have the government now want to do an across the board moratorium on all foreclosures, including all those liar loans that are in default is nuts. No, it’s more than nuts. It’s just another example of how our government can screw up anything it touches.
Depending on your area of the country, by placing a moratorium on foreclosures the banks have shut down 50% of our industry for the near future. However if the government does what they are now hinting that they will do, they will shut down our industry for months to come.
We would have a much more effective government, if we had term limits and if the people who serve only got paid for the time they serve. It is way past time to get rid of Career Politians.
Now, with all that said, I always look for the silver lining because my glass is always ¾ full.
I have written several articles over the last few months discussing a severe inventory problem that is going to affect our industry and drive up Real Estate prices faster than most people realize.
So for a moment let’s look at this moratorium. Essentially ½ our inventory just disappeared. Depending on your area, we are now down to a 4 month inventory. A 4 month inventory is a seller’s market. Or at best a neutral market.
What do you think will happen when there is no inventory to be had? Yes! The prices will start to rise. I had a Realtor®tell me this weekend that all she does is short sales and none of them are going through anymore because the buyers still want to get the prices that they could a year ago and now the prices have gone up. The bottom of our industry was last year. Now the prices are going up, and with half the inventory now being taken off the market, that guarantees the prices will rise more rapidly.
Maybe I’m a cynic, but do you think maybe the banks placed a moratorium on foreclosure knowing that with so little inventory available prices will sky rocket and then once they do go up, the banks will release the inventory slowly and get their money back?
Low Inventory = Higher Prices
This moratorium may hurt our industry in the short term, but in the longer term, if may in fact help our industry tremendously.
However, we still need less government interference.
James A. Crumbaugh III is CEO of Allison James Estates and Homes, a national Internet Based Real Estate Brokerage operating in 14 states. You may contact Mr. Crumbaugh at email@example.com
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