The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (32908)	6/8/2005 7:13:37 AM
From: Mike Johnston	Read Replies (1) of 306849

Equilibrium" in a real estate market does not refer to price. It refers to a balance between supply and demand. In a free market economy supply and demand are always balanced, at a certain price. Seriously, if the federal government hadn't made homeownership a priority and matter of public policy for the U.S. many years ago, we'd probably just have more and more people trying to cram into a diminishing supply of apartment buildings. Are you saying that without Fannie Mae and tax breaks people would be living in apartments ? I say, just the opposite. Many more people would have been able to afford a home, without being crowded out by speculators and housing inflation. Government intervention into an economy always creates distortions and artificial shortages which in the end increases the price and lowers affordability. That is why socialism was rejected in many countries recently after a failed economic experiment. If not for a failed government policy many of today's apartment dwellers would be able to move into a home at an affordable price.

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