Source: Real Estate Marketing Forum
Too many choices in the housing market makes deciding to purchase even tougher for buyers today. For instance, there are the obvious questions, "Is the market at at the bottom?" "Will the economy get worse?" These are questions on everyone's mind these days. As to the market bottom question, however, I'll only say that the only way you can determine when the market has hit bottom is only after it's already on the way back up.
These questions are not the decision making problems I'm talking about, however. What I'm talking about is the fact that with increased inventories in practically every market category, it becomes increasingly difficult for many buyers to make a choice that leads to ultimate personal satisfaction! Too many choices leads to paralysis. The fear of making a bad choice forces us to make no decision at all, or at the very least delay, delay, delay the decision making as pointed out by Seth Godin in his recent blog post.
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RISMEDIA, April 30, 2009
Richard Smith, President and CEO of Realogy Corp., took part in a panel discussion titled ‘Jump-Starting the Housing Market’ at the Milken Institute 2009 Global Conference. Smith and panelists Donald Brownstein, CEO and Chief Investment Officer, Structured Portfolio Management; Ross DeVol, Director of Regional Economics and the Center for Health Economics, Milken Institute; Steven Mnuchin, Chairman and Co-CEO, Dune Capital Management LP; Chairman and CEO, OneWest Bank Group LLC discussed solutions on how to fix the housing market.
While everyone agrees that the U.S. housing market is troubled, when it comes to solutions, there’s a raging debate. Smith stated: “The administration has failed so far in addressing the housing crisis. The focus of the administration has been on the foreclosure issue, but the solution to the problem is on the demand side.”
Recounting the challenges facing the housing market, panel members agreed that the causes are numerous. Brownstein said the downturn was the result of easy money for homebuyers in the form of mortgages that were too high for people’s income. Mnuchin agreed: “The industry began making loans based on the value of the property instead of on the home-buyer’s income. The problem is lending gone wild.”
Other panelists noted a complete breakdown in the mortgage system observing that no one, from homebuyer to mortgage lender, understood the risks associated with high housing prices and mortgages based on home value instead of income.
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