Have Romney and Obama Done Enough to Address Housing?

Hard to believe the election is next week! Nobel Prize-winning economist and Columbia University economics professor, Joseph Stiglitz, said in a recent interview with Reuters TV that Obama and Romney have shied away from discussing the uneven US housing market recovery because neither has concrete solutions for helping financially strapped homeowners and both are wary of offending the banks. PBS Newshour also recently asked “Why aren’t the candidates talking about housing?” You can watch the segment “Housing and the Foreclosure Crisis Are Missing From the Campaign Conversation” here.

There are tons of speeches and remarks from both candidates on all kinds of important issues available from the last few months. If you missed the presidential debate on October 3rd, you can read the transcripts here. For the transcripts of the second debate on October 16th, try here.

I think housing is a pretty important factor in economic planning and it should play a role in how we decide which candidate to vote for. Regardless of which candidate you believe has the best economic plan, I do hope you will go vote on November 6th. My only question here is: Do you agree with PBS and Mr. Stiglitz that neither candidate has spent enough time addressing the topic? If you’d like to weigh in on this, please visit my Facebook page and take our informal poll.

So what do economists say should be done about the housing market if anything? Well, Stiglitz told Reuters discussions about the housing market need to include a plan for reducing the level of mortgage debt held by U.S. homeowners, especially after the drop in property values that occurred during the peak of the crisis. Stiglitz argues that reducing mortgage debt is the surest way to boost the economy by providing financial relief to struggling homeowners. Stiglitz believes there are some good ideas about the restructuring of mortgages out there but thinks neither candidate is addressing them because it makes both sides uncomfortable. He believes the biggest challenge for both candidates could be that "the banks don't want to do it because they would be forced to recognize losses." Other economists have promoted more controversial measures to fix the housing market, like allowing local governments to seize distressed mortgages through eminent domain so they can be restructured to enable homeowners to remain in their residences.

The impact of regulating the financial industry on housing is a complicated issue and I certainly don’t have the answer. What I do know is the local real estate market and it is showing measureable signs of improvement. You can see the latest market stats by clicking here. Just search the area or city you are interested in and this quick video update will give you the latest information. I’m always happy to answer any local real estate questions you may have. You can contact me at John@PetersenPartners.com.