Mark Wisterman's Paradise & Lake Oroville Real Estate Blog

With all the hoopla surrounding the extension of the first time home buyer tax credit, as well as the expansion of a smaller credit to existing home owners, I think it is time to develop a plan that actually addresses the LONG TERM needs of this market. I am talking about more than just the Lake Oroville real estate market here. We need a national solution.

As you know, I am not a big fan of using taxpayer dollars to pay people to buy homes. These handouts, in my view, are only band aid solutions where a tourniquet may be the better answer.  They do nothing to stabilize the market. In fact the tax credit is just going to delay the inevitable unless something is done soon to spur market demand for housing.

What I would like to do, over the next couple of blog posts, is to get your opinion on a plan that I think will finally put this real estate market back on the tracks, without government money.  And just so you know, it must be a great idea because I thought of it while taking a shower.  (If you have never heard of this theory before it must be because you take baths).

So let’s get started fixing this thing.

Firstly, this plan will probably not be “fair” to everyone.  Quite frankly I don’t think any type of program to get the housing market off its back can be fair to everyone. Anything that is done is going to be criticized, and rightly so, by those who are fulfilling their obligation to pay their mortgage payments on time.  In fact, I am one of those who have kept my mortgage current (just barely) and I too have voiced my objections to some of these programs that seem to benefit those who, in most cases, had no business buying a house.

But who were these people who should not have been qualified to buy a home? Or who were those homeowners that got over their head by doing multiple refinances to buy all their “toys”? Or who were those home buyers who were lied to by their lender or REALTOR®, or both, and had no idea what they were what they were getting themselves into?  At this point we really have no easy way of telling the difference between those who should not have been approved to buy a home, from those who could have made their house payment if they had better managed their finances, from those who were lied to.

What we do know, is that MILLIONS of homeowners have lost their homes and, that no matter the reason that they have been foreclosed on, they now have a credit report that will not allow them to buy a home for the next 4 or five years.  On top of this, the sheer number of distressed properties that have sold, or are currently on the market, has depressed values of all homes, including those that have mortgages that are current.

Let me repeat this:

Millions of former homeowners banned from buying a home for the next 4 or 5 years at a time when they can now, because of lower prices, probably afford to make and maintain their mortgage payments.  

Now, because I know there is a lot of brain power out there in the blogosphere, and I because I know that this may be one of the most read real estate blogs in all of Northern California, before I provide the “answer” to getting this market going again, I first want to hear from you. That’s right class, this is an interactive blog post.  A pop blog quiz if you will. And I expect even those sitting in the back of the class passing notes back and forth to participate.

Here is the question:

What is the one thing you would do to get the real estate market back on its feet within the next 12 months?

My solution will come in part two.

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