When does government intervene in real estate market?
There is no dearth of investors even in the sliding economy yet people have lost their confidence in real estate market as well as other investment forums. Maybe a small boost from the government is what could actually get the wheels back in action. A majority of the crowd will prefer the government to interfere in real estate market. There is more than a single reason for this like for example:
- 1.When the real estate prices are either too high or two low making the market really feeble and the investors really vary.
- 2.When the recession is on a peak and there is very low investment taking place in the market.
- 3.When the real estate markets have been predicted to fall for long as in the current scenario.
What the public actually desires from the government in such situations is a series of steps or measures that can set things back in place. It will help to calm down the suspicious behavior of the general public and will help the market to escalate at a slow pace later on. These measures could include a cut in the interest rate, mortgage bailout packages, refinancing low fixed rate mortgages, more government subsidies etc. All these measures will ensure that there is significant financial backing for the investors. Recession time has actually allowed investors to make good investments as the prices are quite low and such a boost from the government side will help the market to rise again.
It is true that recent years have posted some of the most dismal economic figures in more than a decade and this has what eventually led to troubles in the housing market, lending industries, fiscal woes and stock market as well. The only sector of economy that can actually come back on its own is the real estate market. Government intervenes in the real estate market to make sure that people do not lose their lifetime investments in their houses and other properties. :
Recent statistics show that the housing starts have fallen by over fifty percent in the last quarter, coupled with fall in new home sales and escalation in existing home sales. The government intervention stimulus plan may provide first time home buyer tax credit increments as well. With some measures of government intervention, the real estate market can become more of a free market. We need to couple these measures with more fair housing education so that the general public is aware about the steps taken up by the government.
Home sales have been showing surprising strength from December onwards. This has helped to stop the foreclosures from crashing into the market. Commercial real estate is lagging in all asset sectors. It is estimated that it will be a long route back up but yet when the boom is back, the real estate industry is going to benefit the most. Hence use the government sops and cuts to ensure that you make the right investment at the right time and every time!
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