"Deja Vu All Over Again?"* The number of buyers who signed contracts to purchase homes dropped in May to the lowest level on record, a sign the housing recovery can’t survive without government incentives.
The National Association of Realtors said Thursday that its seasonally adjusted index of sales agreements for previously occupied homes tumbled 30 percent in May. The index fell to 77.6 in May from 110.9 in April. May’s reading was the lowest dating back to 2001.
--"U.S. Pending Home Sales Fell to a New Low in May"; The New York Times (7/1/2010)
The above is hardly a shock to any Realtor doing business the last two months; showings, Pending sales, and virtually all other real estate activity are down markedly since the last batch of tax credits expired April 30.
So now what?
Diminishing Returns
Personally, I think it's time to change course.
Instead of another batch of incentives, which create another burst of buying (although less than last time, which in turn was less than the time before), how about doing what should have been done two years ago:
--Reform Wall Street, and specifically dismantle the mega-banks that are too big to fail.
--Charge Wall Street's leadership with the criminal activity it clearly committed, and put a couple dozen people in prison (while we're at it, confiscate their ill-gotten gains, and apply it to the exploding deficit that the bailouts exacerbated).
--Strip corporations of their status as "legal persons," which a supine Supreme Court has (incredibly) conferred upon them, and which allows for -- amongst other things -- unlimited campaign contributions.
That's what previous generations would have done -- and in fact, did -- when confronted with unbridled greed and systemic corruption.
Do all that, and just watch what happens to consumer confidence, people's faith in the system generally, and their sense that someone guarding their interests is really in charge.
Do all that . . . and home sales will take care of themselves . . .
*Courtesy of Yogi Berra
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2 comments:
It's so interesting because all I hear in the office is "who knows what's going to happen with the housing market and interest rates" Seems like a CHANGE is in order instead of all this wondering what the government is going to do next.
Right, stifling free speech will help homes "sell themselves". If you don't like corporate speech, ignore it. Assuming you're not a moron.
The only thing that will help homes "sell themselves" is letting prices fall to what the (free) market will bear. Clue: it's a lot lower than prices now.
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