I agree. All the propping up efforts advocated by the NAR, home builders and banks won’t solve the underlying problem which, as Blodget points out, is the inability of some homeowners to pay their mortgage. Falling prices don’t cause foreclosures, no income does. If we “hold the line” on prices through massive subsidies paid by one group of taxpayers to another, what have we accomplished?
I don’t really foresee a wave of foreclosures coming to Greenwich – or I hope one doesn’t – but the philosophy is the same: if you want to sell your house, you’re better off adjusting to reality than clinging to a 2006 price and hoping it will return. That may well be a very long wait.
Update: And here’s exactly what we don’t need – Congress expected to authorize bankruptcy judges to cram down mortgages. That’s great news for deadbeats, pad news, in the form of higher interest rates, for those who pay their bills.