Stimulating the real estate market, that’s the definition of insanity

Posted on 10. Sep, 2010 by LuxSpaces in Real Estate News

Perhaps the best option for the real estate market is to let prices fall.

Read this and just nod your head.

“As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”

Translated: Buyers are not stupid.

They will not overpay for such a big purpose unless they feel that they are making a long term decision that they can re-coup. We need realistic prices for a realistic market to emerge devoid of government intervention and manipulation.

If you would like to see more articles like this, visit The Real Estate Bloggers. where it was originally published.