Despite 2007 real estate “annus horribilis,” Ken Harney says there’s reason for hope next year

wizard hat Prominent Real Estate columnist Ken Harney recently put on his economic prognosticator wizard cap and came up with this heartening forecast.

I’m inclined to agree with him–as long as our government doesn’t interfere too much with the natural healing process of the market.

Like this. ‘…The administration must focus on the housing crisis and declining home values. “We should take immediate, commonsense measures to prevent unnecessary foreclosures to preserve the economic value of our nation’s homes,” Schumer said.

Oh dear! It sounds so good, doesn’t it? But in the long run, it’s not. (BAD SCHUMER, BAD BOY!)

Mr. Schumer’s ideas are likely to cause more harm than good by delaying normal–and needed–and inevitable–market corrections.

Notwithstanding B. F. Skinner’s fall from grace, it can be reasonably assumed with a significant level of confidence that behavior reinforced (through a lack of negative consequences) will be behavior that is repeated.

Bad loan originators will be emboldened to return to their greedy, irresponsible ways and eager, ignorant, impulsive borrowers will flock to them faster than a clutch of Park of Roses ducks attacking the last crust of bread on the pond.

Eager, ignorant, impulsive borrowers.

In the end, there will be no escaping the negative consequences of all the ignorant, irresponsible and criminal behavior that precipitated this giant financial imbroglio. But, like an oil slick, its reach is far and wide but not all that deep. The economy should be strong enough to withstand the stress and recover just fine.

Locally, housing market values never shot up like they did in other regions of the country in recent years. Consequently our home values are not likely to suffer the big losses that are now evident in portions of Florida, Arizona and California, for example.

Columbus area home buyers–be not afraid! The nexus of flush inventory, “friendly” sellers and favorable interest rates around here is the best that it has been for a long time and is not likely to be repeated for some time to come.

Just one caveat…you will probably need somewhat decent credit to get in the game. (About that, more later…)

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