Housing Market Dissected

Posted: June 27, 2011 in Uncategorized

I spotted a great article on Townhall, defining the decay of the housing and rental markets.

When you look over the course of time there is a point of inflation, supply & demand, then there is just ridiculous overpriced products. Why and how did those prices really get so high?

How? Say thank you to the government. It is government involvement that inflates the prices, that changes the interest rates, that made the housing market make a nose dive, and has turned the rental market into a beehive without a source of food.

The article listed factors for what has happened in the market..

  • Government involvement, adding more red tape for rental construction = more delays.
  • More delays = price increases, those increases are passed onto the consumer/tenant.
  • Government adds fees, which again gets passed down to the consumer. (I know people who buy into the political baloney that fees, fines, or law suits are a punch in the gut to the big-company, with out realizing if a big company takes a hit, where is he going to take that expense from?)
  • Government further arm twists developers, requiring street enhancements (parks, lighting, etc). Who again do you think pays for those?
  • Government tosses treats to the unions, further arm twisting that ends up requiring union workers= more cost, who again pays for that?
  • Government imposed “rent control”.. limits the profitability that developer could otherwise receive, restricting what he can offer.. further restricting growth of the developers business, employ, and product.
  • Government also imposing other limiting factors, like requiring “social engineering programs” to be included in various project, again limiting what a developer can produce.

But alas.. while new construction can not offer additional affordable housing, the housing market has crashed (again thanks to the government involvement, feeling people should have a home whether they can pay for it or not) which prevents home owners from selling and cornering them into the rental market..  Surely the government will have to put a cap on that, and make homeowners suffer even further.

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