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Tax credits, secondary market purchases, re-works, FHA, and the like won't stop the downfall. Bottom line is that exotic financing allowed home prices to outpace real income by a large margin. Now that the financing is gone the only thing that will restart the housing market is for prices to come back into line. The gov't can waste all the time and money they wish but there will be no stopping price decline. What's next $20k tax credits for home buyers? How bout $30k? Do I hear $40k? Anybody?
This to me, as someone who is trying to sell a house right now. Is the crux of the issue. We (as people in this country who own real estate), have to get used to the fact that our holdings are not worth what they were 2 years ago. We need to get used to this new reality, and realize that it ain't coming back, at least not in the way we grew used to it for the last 7 years (up until 2009). Everyone out there who is thinking that their next big thing is going to be bankrolled by their equity line (and they haven't applied yet), need to start thinking seriously about their expectation for that line.
I lecture my wife almost weekly, that the best asset we could get a hold of right now, is one of these really low interest rates for primary residences. I am going to lower my house price again at the end of this month, in a effort to make sure we get into one for the new place.
I keep telling her "There is a new reality, the faster we get used to it the better of we are."
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