When I read this tidbit scroll across my television this morning my heart nearly sank. "Are you serious?! We could be mired in this mess for another 4 years!"
For some real estate markets around the country you've only begun to feel the affects of the housing downturn within the last 6 to 12 months. However, down here in Phoenix we've been mired in it for 3 years, maybe a little longer. So the prospect of having to deal with short sales and foreclosures for 4 more years is daunting and depressing to say the least.
I read a lot of anti-government intervention posts here on Active Rain and elsewhere. Some of it I agree with, and some of it I don't. Many of the Active Rain bloggers believe that the government should step back and let the market take care of itself. I too was of this mindset at one point. I too have read Ayn Rand's "Atlas Shrugged" and bought into the whole theory of the free market system with little government intervention. But now I tend to believe we need something more significant to happen from a governmental level.
If left to the market forces I imagine we will see things reach a catastrophic level. Foreclosures are up 38% over April 2008. April 2008 was a terrible month to begin with, and this year is worse. If left unabated we are just going to see a continual downward spiral of home prices, leading to more foreclosures, leading to more financial distress, leading to more layoffs at companies around the country, leading to more foreclosures....get the picture?
As I've stated in previous posts I believe the whole key to the housing market and the economy as a whole are the short sales. If the short sale approval process can be reduced to a 15 day period it would have a profound effect on the housing market and the economy as a whole.
First, by condensing the short sale approval process to 15 days we would have buyers who would stick around through the entire transaction, thereby more homes would be sold before being foreclosed upon, thereby stabilizing home prices, increasing liquidity for the banks which they can then circulate back into the economy, which in turn is GOING TO GROW THE ECONOMY.
The other leg to this equation is the buyer behavior after they purchase a home. We know that most buyers after purchasing a home typically do some sort of renovation. Whether that is simply painting or a complete overhaul of the home IT IS GOING TO STIMULATE THE ECONOMY. Furniture purchases, landscaping renovations, appliance purchases, and house warming parties, etc. all get money circulating again WHICH GROWS THE ECONOMY.
Lastly, is the affect a shortening of the short sale approval process will have on our industry and all the ancilary industries tied to real estate. By selling more homes Realtors will have more disposable income, to buy new cars, take clients to lunch/dinner, buy new clothing, etc. which will GROW THE ECONOMY. Plusssss, all the inspectors, title/escrow people, loan officers, etc. will have more disposable income to buy new cars, take clients to lunch/dinner, buy new clothing, etc. which will GROW THE ECONOMY.
But the banks/financial institutions seem to be at a loss as to how we shorten the short sale approval process. Which is why I believe it is going to take government intervention to force the banks/financial institutions to streamline the process and get this market moving again. I just don't envision the banks doing this themselves.
So call me Socialist, anit-free market or whatever you'd like. I just want a solution. Before things get much worse.
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