Some fear plans by the government to reduce its levels of guaranteed mortgage loans could lead to further sale and price reductions.

This is obviously a big deal, especially for high-cost states like Massachusetts.

But don’t such fears kind of confirm the notion that guaranteed government loans for high-end homes led to absurdly high prices in the first place? As long as the government kept forking out the guaranteed loans, prices kept going up and/or maintained high value levels. Now the government is thinking of getting out of that high-end loan sector. So prices might — repeat might, since it’s all based on fears right now — fall to their non-propped up norm. Is this so bad? Maybe in the short-term. But what about the long-term?

File under: Just asking