Unleash the inventory
Letter to the Editor
By Inman News, Monday, February 8, 2010.Re: 'HARP's unintended consequence' (Feb. 5)
Dear Editor:
I'm a Realtor in Northern California who has sold homes for 40 years -- 28 of those years representing lenders in the sale of their REO (bank-owned) assets. What we see is a process that encourages default, makes it socially acceptable to default on your mortgage, and is counterproductive to the economy.
Government and bank actions of postponing foreclosures have created a shortage of inventory -- intended to keep values as high as possible. While commendable, the fact remains that there are countless qualified buyers unable to purchase a home because they constantly lose out in multiple-bid situations.
The modification process is not working, the short-sale process is not doing much better, and the economy is stalled. It would be better to provide some inventory so that Realtors, mortgage brokers, banks, escrow, title companies, furniture stores, appliance stores, landscapers, etc., could make some money.
And homeownership could be obtained by those who have been shut out of the market for so long. It seems that the government is keeping people in homes who cannot afford them and preventing folks from buying homes who CAN afford them.
David Schubb
President
The Schubb Group
Pleasant Hill, Calif.
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Submitted by Lexie Longstreet on February 8, 2010 - 5:24am.
The lack of inventory is a local phenomenon in your part of the country. We have a glut of inventory and about 3 buyers. Total. It seems like first time buyers won't get excited about buying anything unless it's half the price that is was a year and a half ago.
I am sure the banks are holding back inventory in our neck of the woods... but to be honest I don't look forward to them opening up that flood. I think it is going to be another long year.
Submitted by John Rakoci on February 8, 2010 - 5:54am.
Flooding the market would hurt banks, shareholders, tax payers, home owners, and the economy. Most areas are now seeing prices at the pre-boom stage. Any aditional huge reduction in prices would send the economy into a tail-spin. Finally, obama sees the problem is 'jobs', has pulled back on his agenda and may do something for the economy. All previous programs have had a near zero effect.
Submitted by Bruno Skopinich on February 9, 2010 - 3:56pm.
I agree with Lexie ... real estate supplies is a local symptom. The US experiences many different market conditions all within the same period.
There are markets in California which have not depreciated.
To stimulate the slow markets, we need more active financing. It seems the pendulum has swung too far, and it needs to adjust. Lenders (via government regulations) have tighten the loan guidelines too far. This is preventing a sizable buyers market from executing purchases. Good thing the rates are still very attractive. But... maybe not for long, as the US needs to attract foreign investors to buy our debt.