The latest headlines in regards to the housing market all seem to have the same theme; Housing Sales Plunge Sharply. Is this any real surprise, considering that the homebuyers’ tax credit has expired. Of course the demand for housing is going to increase when the government is virtually paying people to buy houses and decrease when there not. This is the problem I have with the government mingling in the housing market or pretty much anything else for that matter; their intervention, although well intended for the most part, creates bubbles caused by mal-investments, due to the government sending false messages to the market place by keeping interest rates artificially low and by implementing other government programs targeted at the housing market such as government backed mortgages that create a moral hazard that the taxpayers end up footing the bill for when people decide this isn’t for them anymore and now they want out with no real skin in the game. I don’t know what it is about people in this country or maybe it’s just human nature, but people aren’t willing to take the good with the bad. What I mean by this; is that people love when their property values go up, but can’t stand the fact that they might go down just as quickly as they went up. Of course nobody likes to lose money on an investment, but there are no guarantees, despite what the government or The National Association of Realtors want you to believe. The bottom line is this; the government is the biggest problem in not only the housing market but the economy as a whole, whether it be mandating a minimum wage or by the federal reserve dictating interest rates, the results are all the same. An economy defined by booms and busts, instead of steady real economic growth, allowing everybody that is willing to work earn a decent living by securing a future for themselves and their children by having the ability to save and prosper, instead of just living from paycheck to paycheck. In the next coming weeks I’m going to post a video on Youtube, along with posting it to my blog explaining further how government intervention as been the number one culprit of the crisis that we currently find ourselves in.
