What am I missing?

There has been a mess of programs instituted by the government to "fix" the real estate market collapse.  Most programs have been directed at helping people who are in danger of losing their homes.  Some are being helped out, some are being helped to get out, and some are being helped by the false illusion of help. 

Another program type is the alleged housing stimulus tax credit.  From all appearances, this credit went to people who were planning on buying anyway.  A fair number were induced to push their plans forward, a little like the forward buying during the days of automatic loan approval for all undead applicants. 

The tax credits were a great way to get dollars into the hands of the most likely persons to spend them on "stuff."  Home buyers must have good credit to qualify for a loan.  They must be up to date on all their bills.  They must have a reasonable debt to income ratio.  Home buyers, especially first time buyers, tend to buy homes with more rooms than the place they left.  They need furniture, maybe lawn mowers and snow blowers, maybe carpeting, etc.  They are typically in need of lots of consumer hard goods, the purchase of which would serve to stimulate the general economy.  The tax credit had a positive effect on the economy but not on the real estate market.

Every program I have heard of is either not a stimulus to the housing market, or it is a poor stimulus.  The programs involving existing homeowners are designed to either help them stay or to help them give up their homes.  They do not improve the mobility of millions of Americans who own and make timely payments on their homes.  They are a semi-stimulus to more bank owned or bank approved sales.  They promote one-sided isolated transactions, bank owned home sold to a first time buyer. Sometimes they promote lack of residential mobility.

Just as the velocity of money moving through the system determines the health of an economy, the number of transactions in real estate affects the health of the industry.  Facilitate an owner-occupied home sold in order to buy another owner-occupied home, and there is a beginning of a chain that will eventually gain momentum.  Unfortunately, there has been no effort in that direction by Washington or from the lending community.