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One reason to root against a housing recovery

http://nishitak.files.wordpress.com/2010/11/gullivers-travels.jpg

You might be saying, “Huh? Don’t root for a housing recovery?”

That’d normally be a logical reaction. But a housing recovery also helps Too Big Too Fail Banks, allowing them to go back to their old reckless and risky ways. In a strange twist, the limping-along housing market is actually keeping the big banks in check these days, weighing them down like Lilliputians tying down Gulliver.

OK, yeah, of course, we all want a housing recovery. But you gotta be more than a little wary of unleashing the big banks.

6 Responses to One reason to root against a housing recovery

  • Too big to fail without taking down the US Economy is too big to exist. The Government has a duty to break them up, and protect the citizens and nation from undue risk.

    Too bad there’s no one at the wheel of government who thinks so. Maybe Warren in the senate can be a lone voice of reason on this…

  • I’m not rooting for a housing recovery. Prices are still too high. Price drops of another 30% will give the average consumer more money to spend on goods and services to relight the economy. This isn’t high math. If most of the consumers are spending huge chunks of their incomes on housing and interest payments, the rest of the economy is going to hurt.

  • Confused,

    I wouldn’t count on a major price drop anytime soon, the truth is that inventory is low and bidding wars are coming back into the market place.

    As a broker I’m not saying this is a good thing, just stating the reality of the Boston condo market.

  • Confused,

    Two Beacon Hill real estate stories to tell you. First my office has two listings under $350,000 the activity very poor.

    Second part of the story, When I have a listing over $600,000 its usually under agreement within days. Case in point, two offers on $700,000 plus Beacon Hill condo – less then 8 days old.

    Your thoughts?

  • The luxury Boston condo market seems to be doing very well.

  • I’m not saying that housing isn’t going up in Boston. It’s all supply and demand. I’m just saying that it may not be good for the economy.

    A question–What did they sell for previously? The properties in my area, Newton, seem to be stagnant to slightly lower. I’ve seen a couple short sales in the million plus range and several places selling for less than assessment.