How can the Kansas City Housing Crisis Be Solved? I have 2 solutions....
….Are you like me and really sick and tired of all of the real estate bad news? It is all over the media in Kansas City.
When will the real estate crash it bottom? I am SO looking forward to this never ending real estate crash to be over, and I bet you are just like me. Did you know we have been living through this ‘correction’ for 6 YEARS!
Seriously, enough is enough.
What will cause the real estate crash to end? Did our market really crash...?
A couple thoughts:
1) Option #1 - Do nothing. Let the market self correct. In other words, no more government intervention. This is exactly what is starting to happen now.
The various foreclosure prevention programs haven’t lived up to their intentions.
Many of these programs are on the Republicans hit list and will be canceled. There is absolutely NO political will for any sort of new ‘foreclosure prevention’ initiative. None. When was the last time you heard of ANY new program designed to truly solve this housing crisis? (if there were any new programs on the horizon you would of read about them on this site)
Here’s the negative on this option. Letting the Kansas City real estate market self resolve will result in a seemingly bottomless spiral downward. Oh sure, at some point investors will step in..cash is finally truly king. At some point homes will be so cheap that everyone will be able to buy one for beer money. Think it can’t happen, look at Detroit. Detroit has hit that senario. They’re selling 2 homes for the price of 1 deals.
Do we really want that to happen to our country? Do we really want to have a market where prices continue to fall thus pushing MORE owners underwater?
At this point, your this Kansas City real estate expert feels that allowing a 100% hands off approach…allowing the market to self correct is NOT going to be the solution. I hate the bail outs as much as the next guy. I hate the fact that we ARE going to have to suffer inflation. But, what I hate a ton more is all the families who are being wiped out as a result of this housing depression.
Think about this....the average American family earns $40,000 per year. The average earnings for new homeowners in 2010 was $78,000 per year, per National Association of REALTORS 2010 homeowner study.
Does this mean rich people buy and all of the rest of us should rent?
Most if not all of their wealth comes from owning their home. Over time, the homeowner pays off the mortgage. Then the asset provides security when the homeowner retire. If all else fails, the house is paid for. Take that away, what will that leave for a majority of American families?
Not convinced? OK, how about this. As long as someone is underwater in their home they are (9/10) technically insolvent. Bankrupt, right? They are broker than broke. Broke people don’t buy stuff. They don’t buy new TVs, cars, appliances …and they certainly don’t buy new homes. According to recent figures 40% of ALL American Home Owners (with a mortgage) are underwater on their mortgage. That’s 20,000,000 American Families who are technically… that is right, broke. How will the Kansas City real estate market recover?
2) Option #2 - Force the banks to write down underwater mortgages. I am of two minds on this point. I get the whole moral implications argument of bailing one Kansas City homeowner out (canceling their negative equity) while another is left underwater. I understand the fear that if there is some sort of hardship based negative equity wipe out program that every underwater owner will…almost magically…have a hardship. The flip side is, what are the other options?
There must be a way for TRUE homeowners…living in the home, not investors, not second homes etc…to have their negative equity wiped out. The banks MUST take the hit. The banks are taking huge hits right now when they are forced to foreclose.
Wouldn’t they take less of a hit if they wiped out the negative equity? Wouldn’t that encourage more homeowners to continue to own?
Make it so if they owner sells the home within 7 years the bank gets a percent of the profit…if there is a profit. Remember, in those 7 years its not like the bank is not making money. The interest they will make off the monthly mortgage payments are not a small number.
The bank always wins.
Why continue to pay your mortgage if there is no way to buy your home at fair market value?
Why?
Bottom line, its time to make the hard decisions.
Are you thinking about selling your home before the next downturn...should we talk?
….Are you like me and really sick and tired of all of the real estate bad news? It is all over the media in Kansas City.
When will the real estate crash it bottom? I am SO looking forward to this never ending real estate crash to be over, and I bet you are just like me. Did you know we have been living through this ‘correction’ for 6 YEARS!
Seriously, enough is enough.
What will cause the real estate crash to end? Did our market really crash...?
A couple thoughts:
1) Option #1 - Do nothing. Let the market self correct. In other words, no more government intervention. This is exactly what is starting to happen now.
The various foreclosure prevention programs haven’t lived up to their intentions.
Many of these programs are on the Republicans hit list and will be canceled. There is absolutely NO political will for any sort of new ‘foreclosure prevention’ initiative. None. When was the last time you heard of ANY new program designed to truly solve this housing crisis? (if there were any new programs on the horizon you would of read about them on this site)
Here’s the negative on this option. Letting the Kansas City real estate market self resolve will result in a seemingly bottomless spiral downward. Oh sure, at some point investors will step in..cash is finally truly king. At some point homes will be so cheap that everyone will be able to buy one for beer money. Think it can’t happen, look at Detroit. Detroit has hit that senario. They’re selling 2 homes for the price of 1 deals.
Do we really want that to happen to our country? Do we really want to have a market where prices continue to fall thus pushing MORE owners underwater?
At this point, your this Kansas City real estate expert feels that allowing a 100% hands off approach…allowing the market to self correct is NOT going to be the solution. I hate the bail outs as much as the next guy. I hate the fact that we ARE going to have to suffer inflation. But, what I hate a ton more is all the families who are being wiped out as a result of this housing depression.
Think about this....the average American family earns $40,000 per year. The average earnings for new homeowners in 2010 was $78,000 per year, per National Association of REALTORS 2010 homeowner study.
Does this mean rich people buy and all of the rest of us should rent?
Most if not all of their wealth comes from owning their home. Over time, the homeowner pays off the mortgage. Then the asset provides security when the homeowner retire. If all else fails, the house is paid for. Take that away, what will that leave for a majority of American families?
Not convinced? OK, how about this. As long as someone is underwater in their home they are (9/10) technically insolvent. Bankrupt, right? They are broker than broke. Broke people don’t buy stuff. They don’t buy new TVs, cars, appliances …and they certainly don’t buy new homes. According to recent figures 40% of ALL American Home Owners (with a mortgage) are underwater on their mortgage. That’s 20,000,000 American Families who are technically… that is right, broke. How will the Kansas City real estate market recover?
2) Option #2 - Force the banks to write down underwater mortgages. I am of two minds on this point. I get the whole moral implications argument of bailing one Kansas City homeowner out (canceling their negative equity) while another is left underwater. I understand the fear that if there is some sort of hardship based negative equity wipe out program that every underwater owner will…almost magically…have a hardship. The flip side is, what are the other options?
There must be a way for TRUE homeowners…living in the home, not investors, not second homes etc…to have their negative equity wiped out. The banks MUST take the hit. The banks are taking huge hits right now when they are forced to foreclose.
Wouldn’t they take less of a hit if they wiped out the negative equity? Wouldn’t that encourage more homeowners to continue to own?
Make it so if they owner sells the home within 7 years the bank gets a percent of the profit…if there is a profit. Remember, in those 7 years its not like the bank is not making money. The interest they will make off the monthly mortgage payments are not a small number.
The bank always wins.
Why continue to pay your mortgage if there is no way to buy your home at fair market value?
Why?
Bottom line, its time to make the hard decisions.
Are you thinking about selling your home before the next downturn...should we talk?
RE/MAX sells more homes than any other real estate company.
For a reason...should we talk?
Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.com
Blog post written by the Dowell Taggart Team of RE/MAX Best Associates
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1) Buyers and Sellers find us online first, before any other Kansas City Real Estate Team! That might sound bold, but we’re willing to put it to the test! Don’t believe us? Search us on the web. Go ahead and search Kansas City Real Estate....www.DowellTaggart.com .
2) Contact us and you’ll find out we'll return your call more quickly than anyone else in town! Why? Because our clients tell us that’s important! We return phone calls promptly.
Would you prefer a Kansas City REALTOR that has a newbie assistant answer the telephone or return your calls? Or the calls of Buyer’s who want to see your home?
3) With 87% of the Kansas City home buyers starting on the Internet, doesn't it make sense to list your home for sale with the #1 online Kansas City real estate team? Wouldn't it make sense for more Buyers to find your home more quickly? Our 124+ step proven marketing plan, gets results.
Don’t believe us, search us on the web www.DowellTaggart.com . Click here to get started today!
4) Do you like to save money? So do we. View the Top Kansas City Distressed Homes for sale including Foreclosures and Distressed homes with special financing options!
5) Knowing a little bit about the market in Connecticut might be interesting, but most people believe it makes sense to arm themselves with local market statistics.... There is a reason why we’ve been interviewed over 200 times by the media. View local Kansas City real estate stats.
6) At $3.50 per gallon, does it make sense to start your Kansas City home search on Kansas City’s real estate #1 online website? Why start in the car? Click here to get started, today for free!
7) Learn how to buy a Kansas City home with zero down. We also have 86 steps to help Kansas City home buyers save money and time. Contact the Dowell Taggart Team today!
8) Although the Dowell Taggart Team is extremely high tech, we haven't forgotten our roots. We're geniunely nice people who like to help our clients reach their goals.
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9) We’re the leaders in providing Local community information. Checkout the stats we provide: Gardner, KS., Olathe, KS., Overland Park, KS., Leawood, KS., Lenexa, KS., and Shawnee, KS.
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