Editorial, REALonomics
Government Interference has Harmed American Real Estate Wealth
October 10, 2008 by REALonomics · 1 Comment
EDITORIAL
REALonomics urged the real estate industry to reject the $700,000,000,000 government bailout program.
The National Association of Realtors (NAR) took the opposite position and even launched a national public relations campaign designed to convince us, the members, to support something that historically we have never supported, government interference in the private sector free market.
Well, here we are, a few days hence, witnessing the most massive loss of personal and real estate wealth in the history of the world.
Now let’s talk about the real estate industry specifically. The central wealth producing asset of most Americans is their investment(s) in real estate. Our industry has been dedicated to the creation of wealth through home ownership supported by one’s ability to qualify for mortgage financing and to service the debt based upon qualifying ratios.
It appears we have adopted a position that runs counter to our industry’s historical roots. But worse than that, through industry support of the bailout we have actually made a fundamental mistake in economic judgment and we may have harmed the ability of brokerage firms and agents to be effective ambassadors and cousellors to consumers.
Are we ready to exchange a long-held traditional and fundamental economic model for a new system where the notion of “bail-out” through subsidized real estate welfare is a valid competing model?
Should NAR have supported the $700 billion bail out? We don’t think so and we said so in our post entitled “Warning: RE Industry will be Harmed if Bailout is Backed by Us” on September 30th, 2008.
REALonomics calls on NAR to reverse its position and return to our historical position where we only believe in the American dream of home ownership where individuals and families, under the guidance of sound advice from Brokers and agents, purchase homes they can afford.
NAR’s support of the bail out was wrong and we should make that admission to the American people so that we can regain the trust of consumers.
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After over 40 years as a Realtor and living through at least 5 temporary downturns, I agree that a Federal bail-out is unneccesary, sure they could change the solvency rules for banks, Fanny and Freddy and encourage lenders to adjust the unrealistic loans that were made. Just give pivate enterprise the ability to bail themselves out and private proprerty rights will win, again.