Real Estate News

James M. Weichert, president and founder of Weichert Realtors, cheered Congress today for passing legislation giving a tax credit to home buyers in order to stimulate the housing market. Marketwatch reported Weichert saying, "I was particularly pleased to see that this bill included a tax credit for homebuyers. This was something we knew was a critical component in terms of our economic recovery and we lobbied hard, along with the National Associations of REALTORS(R) and others, to make it a reality."

While real estate brokers and agents around the country will undoubtedly cheer this news, I have to raise a troubling question. The financial mess this country is in due primarily to troubles in the lending industry have been blamed primarily on unscrupulous lenders, but the reality is that those lenders were merely doing what Congress had been wanting them to do all along...giving people who can't afford housing easy credit to buy that housing anyway. The result has been catastrophic, to say the least.

Similarly, Federal Reserve stimuluses combined with those same housing laws Congress has passed over the years have created a number of false housing booms, the latest of which we are suffering the consequences of now. Isn't Weichert's proposal (really Congress's new law) simply another example of using government policy to create a false air of "Happy Days Are Here Again"? Doesn't this just set us up for yet another boom and bust cycle?

It's certainly a good thing when people can own their own homes, but we never seem to take into account the fact that the price for achieving that goal can be too high.