Prior to the Great Recession (or mini-depression, as I call it) American’s were addicted to this new found application of “The American Dream” – homeownership. As values were appreciating at unsustainable rates, people across the country were using their homes like bottomless ATM machines…they became addicted to the joy ride, and what a ride it was! Housing values had enjoyed a steady appreciation since 1990, with a few minor blips on the radar, as well as some exponential growth spurts; that’s nearly a 20-year joy ride!
But alas, everything must ebb as well as flow.
We all know that compounding the ebb and flow of values came the irresponsible lending practices (which fueled some of the growth), then came the fall of Wall Street Titans, which caused us all to question just how safe is our cash in ANY bank; then the market crash which in turn caused catastrophic losses of savings, an overwhelming sense of emotional insecurity, followed by job losses at staggering rates…all leading to the Great Recession. Though I believe when historians look back on this time period it will be labeled the Depression of our generation, while certainly not a “Great Depression” none the less a Depression by 2010 standards.
Then came government intervention…WHAT A MISTAKE!!!!!!!!!!
You didn’t need to be a nuclear physicist to figure out that any treatment to ease any addiction must be phased out, not simply expire!
Yesterday’s headlines US SINGLE-FAMILY HOME SALES FALL – SINK – PLUMMET, etc…is a direct result of government intervention. If you read the actual report you will see the media is sensationalizing the month to month drop in home sales from June to July when the government incentive of up to $8,000 expired. Duh!!!!! This stimuli did exactly what it was designed to do but with all the brilliant minds in government today no one figured out an incentive of that magnitude at a time of such great recession MUST phase out not expire just simply baffles me to the point of anger (can you tell?).
Sensationalizing such news with such fanfare, while typical, is not depicting accurately the current housing market condition nationwide. We are emerging from the worst housing market correction of our generation yet the real news of the day was that NATIONALLY THE MEDIAN HOME SALE PRICE ROSE 0.7% IN JULY 2010 WHEN COMPARED TO JULY 2009!
The 27% drop in home sales from June to July of 2010 is DIRECTLY due to the EXPIRATION of the federal tax credit of up to $8,000. I have said all along, such an incentive needed to be phased out during our recovery; not come to a screeching halt! If they had reduced the incentive by $1,000 every 2 months there would have been NO FALL OFF THE CLIFF!
At this point, the government must focus on jobs!!!! Without a job people don’t buy homes, cars, or anything else.
There are countless infrastructure projects this nation needs done — put people to work! And when I read about government layoffs I scratch my head in total disbelief. It’s like saying you want to help feed the world while your own kids are starving to death, elementary to me.
Our great country is aging and needs some major surgery and some maintenance. We all need to pull together to emerge stronger and better for having gone through this experience… It’s for our children and their children that we all take our meds and get well!