It never fails. Every morning on TV if you channel surf you’ll find three things. There’s always someone hocking a gadget for the kitchen, there’s someone else talking about the new weight loss plan, and finally there’s someone telling you that wealth is just around the corner in real estate investing. This continues even today.
It’s unlikely that anyone that reads Weakonomics would be dumb enough to do any kind of real estate investing sold on TV, be it flipping houses or renovating foreclosures. But this guy might look familiar to anyone who flips channels in the morning.
While you and I aren’t buying any investing books, I know of someone who might be getting desperate enough to ask a guru for help on their own situation. Who is that person? It’s not a person so much as an organization, our government.
The Feds now own hundreds of thousands of foreclosed homes thanks to their ownership of Fannie Mae and Freddie Mac. And now they are actually inviting the public to submit ideas on how to manage all those properties. So while they aren’t buying real estate books yet, they are soliciting free advice in a forum. They’re just a 1-800 dialing away from all out desperate. Someone who used to work in a foreclosure prevention program said it best:
“It’s almost like having the captain of the Titanic go on the public address system and say, ‘Does anybody have an idea?’” Wiseman said. “It’s not a confidence builder.”
It’s seems the government is considering getting into the property management business as they struggle to deal with 1 in every 5 homes for sale being a foreclosure. This continues to depress housing prices and will for some time. It’s actually scary to think of the federal government being your landlord though. There’s tons of maintenance costs and of course the guilt that will come from kicking an old retiree out of their home because they can’t make rent.
Even more concerning though is that selling them all off at once is no better. Listing so many properties would send housing prices to a frozen hell. All the while taxpayers want to make sure all our bailout and takeover investments are yielding a decent, or at least not negative, return.
The situation simply sucks. This is a rock and a hard place. Normally I like to propose solutions to this problem, but honestly I’m clueless. Any thoughts?
How can the government deal with all the property they now own without killing home prices and still protecting the taxpayer?
Read: U.S. Government Struggles As The Biggest Seller of Homes
Photo: James Jordan
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
