Big Government has Long Reach

By
Real Estate Appraiser with Donovan Group Realty

Over the last few years our own government has reached deeply into the real estate industry and pulled out all the stops. Unfortunately, several of these moves have made our businesses much more difficult to run, if not entirely removed some of our ability to conduct business (HVCC, HUD/FHA Appraisal Regulations,NMLS, MARS, etc, etc, etc).

I just read an Associated Press article this morning that China's housing market has been driven to the breaking point by rising home prices. I know, I know, we are all looking forward to some appreciation here in the states, but China's appreciation has made it nearly impossible for the country's farmers and factory workers. Home prices in some of the smaller cities have jumped dramatically, as high as 21.6% in Haikou.

Similar to some issues we have dealt with here in the United States, some in China are stating that speculative buying by investors have pushed out typical buyers such as growing families, newly employed workers, and migrant workers. China will be investing $200 million dollars this year to develop low cost housing options for these buyers to take advantage of.

China is now creating several new regulations, laws and taxes to discourage those who are trying to profit from real estate investments. Chinese regulators have increased down payment requirements, reduced lending for second homes, and are now even looking at regulating rental prices too.

I feel pretty strongly that TARP was a bad move and has fundamentally changed consumerism in America. the 'too big to fail' strategy just resulted in more corporate greed and less opportunity for small business owners and the self employed. It is my opinion that strict enforcement of the regulations that were in place would have better served us than adding more and more layers of regulation to our industry. We all know how closely China's economy and our own are tied together, so I hope that these strategies are not in our future as I think smaller investors are the ones bolstering our housing prices thus far.

Posted by

Andrew McGrath - South Coast Metro Orange County

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