Housing Investment Down as Investors Not Confident
The stark truth facing us is that the economy in USA is no longer the powerhouse that it once was but it doesn’t call for knee-jerk reactions leading to insularity for where would innovative ideas be born or morphed – isn’t the USA a melting pot made by the immigrants from around the globe?
The Backdrop President Obama (Democrat) like Lincoln (Republican) finds himself facing a hostile house with majority members of the opposite party and a host of inherited problems on the economic & civic front. Despite Lincoln’s success in welding the nation together, President Obama’s various economic stimulus packages or various foreign policy interventions and the recent pronouncements intended to please the electorate have not been very well received (except the end to the Iraq war & killing of Osama Bin Laden).
Present Scenerio The real estate market does need a stimulus but one which is properly researched and studied rather than some off the cuff or politically motivated remarks about ‘lower interest rates’ which would not be in the interests of the nation’s treasury, since it would be tantamount to raising the effective tax rates.
Here are some thoughts which may need looking into:
1. The HUD homes form a large pool of foreclosure homes – why not release them into the property market with much watered-down norms than usual? People may argue that this action may result in lowering the real estate floor-price band, but wouldn’t one see that the real estate trends rise so that the entire industry grows in a healthy way.
2. There is the need for greater tax breaks in the acquisition of housing stock whether corporate or individual. All said and done the corporate will help generate a larger pool of funds for the real estate sector in a far shorter period.
3. The bulls and the bears are playing havoc with the US market trends and predict upturns or downturns as a matter of ‘divine’ rectitude, tame them with the improved ability of the participants’ to refinance the acquisition of newer homes after paying off or clearing the existing loans with a modified refinance system.
4. Increased disposable incomes would end this logjam too, given the incentives to right-size and an equitable salary package across the corporate world.
5. America has shown the world the might of the free market system, it’s time to show that American’s send out the right signals to the world outside through their enterprise and industry and not through bailouts, fiscal packages without anymore red tape etc.
Conclusion What America needs today is an amalgam of these and other ideas, just their relative proportion is to be decided upon.
The various indices indicate either a bull run or a bear run which did not turn out to be correct during the period the bubble burst. The housing market forecasts of the established biggies too need to be upbeat so that investors feel confident about investing in this sector which is so very vital to making the American dream come true or risk being another banana republic.