Housing Woes Bring New Cry
SAN JOSE, Calif. (KCBS) _ The continuing plunge in home sales this summer has left many economists and analysts with a growing sense of exhaustion with government intervention.
And now, many are calling for the most drastic of measures: to completely let the housing market crash.
Joseph Gyourko, a professor of real estate, finance, business and public policy at the Wharton School at the University of Pennsylvania said mortgage modification programs and tax credits are just not helping the ailing housing market.
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"Anywhere from 20-25 percent of all owners with mortgages are underwater," he said. "You're talking about hundreds of billions of dollars to make them whole. I think it's too expensive."
According to the New York Times, more and more analysts are urging the Obama administration to quit propping up the housing market by using tax credits, mortgage modification programs, low interest rates and government-backed loans.
Instead, they would like to see home prices adjust by themselves.
Realtor Cherie Colon of Windemere Silicon Valley Properties said she has clients near Gilroy who have struggled with banks and government programs for months, with no progress.
"And after almost nine months, they are giving up and said they need to list this," Colon said. "We know it's going to be a short sale. It may ruin our credit the rest of our lives. They're just throwing up their hands and saying, please get rid of the house."
Colon said 60 percent of her current inventory is bottled up with banks and government programs.
