I have been reading some articles that make me think.
Real Estate is one of the great success stories of Free Enterprise and Capitalism.
Real Estate is the basic Free Enterprise with individuals making decisions - taking the risks and gaining the benefits. The benefits may not be as explosive as they were in previous years; but the risks will be less also. Sometimes that is comforting to investors.
The lowest prices properties that are the best buys are selling. That is a true free market in action.
I am not ready to give up on the Free Enterprise system. There has not been a time in recent history when Americans could say, ‘Nationalize the Banks’ without accusations of Socialism or communism. There is no other option but to let bad banks fail.
The only way to reign in Capitalism is let capitalism work. It works by teaching greedy companies or banks a lesson. The lesson is failure. Greed makes the system work; Fear of Risk controls greed. When the government takes away the fear, then greed runs rampant.
How did the government reduce the fear?
This bank is too large to fail. That institution cannot be allowed to fail. The taxpayer can buy up your toxic debt. We can not let the banking system fail. The taxpayer can buy stock in your company (generally a company which is failing).
If people can not be allowed to lose their homes through foreclosure; the why would a bank loan money on a house that they can not foreclose if the person does not pay them back? Why would they take risk if there is not enough reward? It sounds sweet to say we should not foreclose; but the result is the banks will not loan money on houses.
So the taxpayer takes the risk while the Banks and Institutions pay large bonuses to the very people that ran the company into the mess in the first place. Now that the profits are less; they want someone else to absorb the risk – after they enjoyed years of profit and greed.
This scenario does not mean the system is broken – only that it is out of balance and greed overcame fear. If left alone, the system is sensing fear and will adjust to the new rules. But not if we (the taxpayers) absorb the risk and reduce the fear.
The Economy is huge – the government/taxpayer is but a small spec in relation to the economy. The only thing that is large enough to fix the economy is the economy. The government just is not large enough – does not have a large enough oversight committees – is too involved in setting policy for energy, wars, health and welfare – to be able to ‘control’ the economy.
When the government controls business - the worry we have - is that the government is controlled by special interest groups, their own political future, favors they owe, and a basic lack of time to devote and a lack of understanding about the problem.
So let business people take care of business. Motivated by greed – (and the desire to make money for themselves and the other people that work for the business); and controlled by fear that they will lose everything and go bankrupt. This system has made us the biggest economy on earth.
What other economy do we want to be like?
Everyone wants to be like us. So why are we changing the very basic rules of our economy, just because we are having a down turn. Did you expect it to go up forever?
We know better than that – what goes up must come down.
It went up really high; very fast and it is coming down. It is a normal business cycle.
I am a real estate agent. This downturn has not been good for me. I am willing to ride it out without the government saving me. I do not want to see us change our basic system of Free Enterprise – just because the housing market went down for a while.
Most real estate agents will tell you that the market was turning around last summer – until the government announcements that the economy was tanking and the housing market was dragging it down. That is not what was happening. The housing market will adjust and fix itself with out government interference.
We need good interest rates such as the ones we have now. We need good values and lower prices such as we have now. And individuals will make the decision to buy, because this is a good time to get in and maybe make a dollar of profit. They are controlled by fear and will make solid decisions.
The real estate market will adjust to the times. The people that need to sell - will sell – they will decide to reduce the price until it is attractive to buyers. The people that do not have to sell will wait until the market bottoms out and solidifies – and turns back up. The lowest and best priced properties are selling first. Now is the time to buy.
Statistics are showing that the bottom has been reached in many local markets. Yes, there are some markets nationwide that have not reached the bottom. The majority have reached the bottom.
The lowest prices are selling first. The Free Market system is working. It is a sight to see it in action.
- by Lynda Bennett
Labels: FDIC foreclosures, Maggie Valley, Maggie Valley NC, Maggie Valley real estate, real estate agent, Waynesville
