And yet another round of articles espousing how the housing market just hasn’t restarted the economy….and for those who still don’t get it, it never will.
Since few have figured it out yet, we need to fix the actual (not reported) unemployment problem. Forty three percent of Americans over the age of 16 do not have a job. Over 20 millions jobs are gone due to outsourcing, off shoring, and down sizing.
Most people without jobs can buy a house, so it goes to figure that most home sales will be limited to the employed (rocket science). That means more renters (more rocket science).
Now with Wall Street (big banks, investment firms) trying so hard to make sure that local investors don’t profit from the sales of REO inventory by restricting offer periods to owner occupant only, deed restrictions, etc. More vacant homes are left sitting on the market, many becoming an eyesore to the local neighborhoods.
Here’s a couple of thoughts to solve our problems:
Increase home ownership by requiring ALL lenders offer FHA 203k or similar owner occupant rehab loans to first time buyers. That way, first timer’s can not only purchase some of the now dilapidated housing stock, but fix them up so that the value increases faster (aids local tax coffers, schools, businesses) and the new home owners have to hire local contractors (aids local contractors, increases employment, spending at local businesses, permit fees at local municipalities).
Second and equally important, allow local investors next dibs on purchasing the local housing stock. Local investors have a more hands on approach to the purchase, rehab as they are often locally grown, have roots in the area. They like to see home values stabilize and recover in “their” neighborhoods. They also are more likely to utilize local contractors, hire and shop locally. Rehabbing a home requires large quantities of manufactured goods and materials. (this creates jobs too, on a national level). Selling to local investors keeps more money “in state” or local. Selling homes to out of state or overseas investors draws money away from local communities and tends to concentrate it back to large investors.
The market is ready for the shadow inventory, the need is there. Mandate rehab loans and prioritize purchases from local buyer and investors. Lastly, promoting more rent to own programs will help many buyers who have lost their homes, ease back into the home ownership which further stabilizes local markets.