Will Obama Save the Housing Market?

By Joel Persinger
YourRealEstateDude

Whatever your opinion of President Obama might be, it is an undeniable fact that millions upon millions of people worldwide have become convinced that he can cure what ails us. But can he?

As of this writing, President Bush is still in office and President-Elect Obama is about to be sworn in. Interest rates are the lowest I will probably ever see in my lifetime, buyers are busily buying homes, homeowners who have equity in their homes are quickly refinancing and sellers who were hopelessly attempting to sell homes that would not sell a few months ago are now successfully selling their homes in short sales and moving on. The system is far from healthy and there is much left to do. But, in spite of the concerns expressed by many including me, the underlying support for the market that has been provided by the federal government’s purchase of mortgage paper has helped get things moving again.

Those decisions were made during the previous administration and will not be fully implemented until well into the new one. If it goes well, President Obama will get the credit for work done in President Bush’s term and probably won’t bother to mention Bush in the process. If it goes poorly, the new administration will get the blame and shift as much of it to President Bush as can be shifted. That’s just how politics works.

The question now is, what will Obama do to improve the situation? Thus far, other than in broad generalities, he hasn’t really said anything of substance regarding what actions he might take and no-one in his administration seems to be talking either. This leaves us having to guess what he might do based upon his actions thus far. What amazes me, in the absence of any clear articulation of his plans, is that so many people that I talk to are unwaveringly convinced that Obama has a magic bullet in his pocket and is just waiting until after inauguration day to pull it out. Unfortunately, I have never been a good magician’s assistant and must point out that no magic bullet exists and that any hinting to the contrary is just smoke and mirrors. Fixing the housing market and the economy will take wisdom, leadership, fiscal responsibility, hard work, time and patience.

Thus far, President Obama has failed to display many of these traits. The inauguration is an example. Throwing the most expensive and lavish inauguration celebration in the history of this county while in the middle of a national economic crisis demonstrates neither fiscal responsibility nor leadership. In fact, it is an insult to the millions of Americans who are losing their business, jobs and homes. President Obama may be capable of great things. Only time will tell. Still, if he has any hope of restoring the vibrant housing market and economy of the United States, he will have to stop pretending to be a rock star and start being a leader.