Real Estate: Moving into the hands of the U.S. Government

With congressional elections coming in 2010 the new administration has a window of time to correct the housing market and reach “stability.” They have exercised control over the market thus far - although it may not be transparent. As with many other U.S. industries, there have been increased regulations for the benefit of the end consumer.

The U.S. Government now has a substantial ownership in U.S. banks, 26% ownership for example in BofA. Where we have seen control being exercised besides their ownership and say in bank activities on the selling side (REO inventory flow) is through increased truth-in-lending regulations and timelines for delivery of disclosures to the consumer (the buying side).

At the end of the day what does this mean? It means the probability of longer contingency time frames and longer escrows BUT it also means we will reach stability – in fact we have to a degree. In many markets we are back to multiple offers and stable prices.

It’s a balance of supply and demand that so far is working.

For more info email me.