Home Selling in 16057>Question Details

John,  in 16057

If the government is the only "business" growing at record pace, why aren't they buying houses?

Asked by John, 16057 Wed Mar 23, 2011

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Like it or not...the Government does "Buy houses".

HUD, Freddie Mac, Fannie Mae. They may not be out making offers...but they are out selling them, and I can't imagine that they make any money at it.
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1 vote Thank Flag Link Thu Mar 24, 2011
The government's not a business. Nor does it operate like one. It has no incentive to make a profit, and generally runs at a deficit . . . sometimes a big one.

Nor is the government the only entity growing rapidly. I just did a quick screen of publicly traded stocks. Here are a few companies (some you'll recognize, some you won't) that are growing rapidly. After the company name, you'll see the 5 year revenue growth, the growth in book value (5 year average), and number of employees (to demonstrate that these aren't just small companies:

Cognizant Technology Solutions: 39.0%, 35.7%, 104,000
Amazon: 32.1%, 91.5%, 33,700
Imperial Tobacco: 33.5%, 106%, 38,300
Apple: 36.2%, 42.4%, 49,400
Research in Motion: 61.8%, 31.4%, 13,873

And, finally, why should any fast-growing "business"--whether a real business or the government--buy houses? It'd only make sense if buying houses fit into that entity's strategy. And, more to the point, only if buying houses would contribute to an entity's growth.
1 vote Thank Flag Link Thu Mar 24, 2011
Don Tepper, Real Estate Pro in Burke, VA
Oh, Don, that makes too much sense!

Actually, Government does buy houses, and build them - that's what "public housing" is all about. But whether they should be buying or building more now isn't a bad question - because it does appear that we will be creating more poor people in the years ahead, unless several million people can figure out how to become bank presidents in the next few months.
0 votes Thank Flag Link Thu Mar 24, 2011

Interesting thought......

But from my perspective, I would like to see greater effort in keeping home owners in their homes than bailing out the banking industry.
0 votes Thank Flag Link Thu Mar 24, 2011
Hello John,

I concur with Rich. I am also thankful that they are not in the business of buying houses, The way they waste money I doubt any of us would want to pay the over-inflated prices that they would undoubtedly create. In actual fact through Tarp and Homeowner Affordability programs they have propped up the housing market for quite some time.Then they have been supported by Herb and Marion Sandler who started Golden West Financial (World Savings). They invented the pay option ARM (the pick a pay loan) and targeted low income borrowers to cheat and deceive them. I was at a "sales" meeting which taught brokers how to disguise the true cost of these loans. Cheating scumbags. The day Wachovia bought these loans I knew they were going out of business. Herb and Marion have since created the Center for Responsible Lending ( no I am not joking) and were cited by the Federal Government as a source of reliable information for the New Dodd Frank Bill which is now attempting to protect the consumer from deceitful mortgage brokers. Everything that the government has done so far has created higher costs to the consumer, To be frank (and certainly not Barney) right now I wouldn't want them tying their own shoelaces because the whole country would undoubtedly trip and fall over.

0 votes Thank Flag Link Thu Mar 24, 2011
Are they? And whether they are or not, why should they?
0 votes Thank Flag Link Wed Mar 23, 2011
The government shouldn't be in the business of anything but unfortunately the true core values of what government is has really gotten off track in the last 100 years or longer. So thankfully they aren't buying houses so the market can correct itself. Just like banks aren't in the business of owning houses but through wrongful lending practices amongst other things (some government related) we are seeing record foreclosures. Banks don't want to foreclose because they understand that houses are liabilities, the mortgage is the asset. So most of them try to dump foreclosed houses as fast as they can even for a loss. Consumers need to realize too that the houses they buy to live in are LIABILITIES! Liabilities take money away. Assets put money in your pocket. A rental house that produces positive cash flow can be classified as an asset.

So thankfully the Government isn't buying houses. There are already too many toxic liabilities on the books and adding a housing portfolio is not a role the Government should be taking on.
0 votes Thank Flag Link Wed Mar 23, 2011
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