I can't imagine a scenario in which the government could not be involved in real estate. Through local government we zone neighborhoods so someone else can't put a garbage dump next to your well-kept home. Through county government we record the ownership of our property so we can feel secure that no one else can claim what we bought. Through the state and federal governments we create laws that protect us from the many property scams out there and ensure that we are not excluded from neighborhoods because of the color of our skin and other factors. And, also through the federal government, we regulate how the money markets treat us as owners and mortgage holders.
Perhaps the questions should be: 1) How much should the government be involved in real estate, and 2) In what areas does the government need to do a better job than it has in the recent past.
Prudential Real Estate of the Rockies
Annette - I agree someone should go to jail, starting with the elected officials who voted for the Community Redevelopment Act (the major cause of the mortgage meltdown) and the Congressmen who testified that FNMA and Freddie Mac were in "great shape" even as defaults were stacking up like cord wood and the chairman of FNMA was getting a $10M bonus. It's easy to point a finger at the bankers, and many of them should share the guilt, but at some point you have to hold the parents accountable for the actions of the child.
Take away FHA, tax credits, foreclosure laws and distressed home programs and imagine where we would be.
I think until the bankers go to jail there will never be a fair deal for the homeowner or home buyer. HINT: when you say government be fully aware you are saying...BANKS.
The fact is, we don't want to pay for government to do a good job. To keep up with Wall Street would require that the government hire investigators with PhDs in physics and math to keep up with the quants who are busy converting lead into gold.
In a similar vein, it was recently reported that the processed-food industry spends $40,000 million (forty billion) on advertising their adulterated food products, and the Department of Agriculture spends $13 million promoting healthy eating to the public.
Sure, government should be involved with the real estate market. On behalf of the consumer, the citizen, the party with the least amount of knowledge in need of the greatest assistance.
Free-market theology is a fine and wonderful thing, but pragmatically, faith doesn't solve enough problems in the real world.
To help consumers get in the real estate market, we do have government backed loans, like VA and FHA, and now we have the government trying to keep homeowners in their homes, despite opposition from conservatives.
The bottom line, the government should be protecting people by overseeing market practices.
Perhaps we would be best served with a government that did little......BUT what they did, was done well! It's time to move away from the paradyme of "if it ain't broke don't fix it" to one of "if it stinks consider taking the garbage out."
History has shown, in the long term, that government involvement only harms the economy by stiffling market forces that would help it grow naturally.