Is the Impending Election Affecting the Housing Market?

The housing market affects people of all political persuasions, income brackets and ages all over this country. We need to figure this out!

Is the impending election affecting the housing market?

In fact, I believe it is — it’s been a little quiet out there. No matter which candidate you’re leaning towards we all can agree the economy and housing market needs to be addressed. How do they envision housing as a part of our economic recovery and growth in the future? Many of us own homes or dream of owning in the future. Many owners are under water or have already lost their home to foreclosure. I get many calls from desperate home owners that just don’t know what to do or where to turn for help.

As I watch the presidential debates I’m disappointed there hasn’t been more time dedicated to discussing housing market issues. The word "foreclosure" has been uttered only once during 180 minutes of combined discussion between President Barack Obama and Mitt Romney, as well as Joe Biden and Paul Ryan. (So far that is. I’m writing this Monday and there is the final debate tonight.)

So why haven't the candidates debated the topic? Both candidates have struggled to find a clear answer on this complicated issue and housing policy tends to be less exciting than, for instance, Iran's obsession with getting nukes or the many other International challenges taking place. These issues concern me very much, but I am also interested in topics that hit closer to home. The housing market affects people of all political persuasions, income brackets and ages all over this country.

I received a call just yesterday from a nurse that works at one of our local hospitals. She told me she needs to sell her town home but she’s underwater. She said, “This is not what I planned for. I bought my home seven years ago and got an interest-only loan. I pay my bills. I pay my taxes, but I just have to let it go.” Luckily I’ll be able to short sale her property and her credit won’t be completely destroyed. She’ll feel a great sense of relief to not have to pay that huge mortgage that doesn’t even apply towards the principle. However, it will be hard for her to secure a rental. Rental prices are increasing astronomically in this area and there is a lot of competition to even find one in your price range. The short sale will not destroy her credit, but will definitely bring her score down. I inquired where she will move and she told me luckily her parents live in the area so she will move back home. She is an independent 30-year-old, but sometimes we need to make hard choices.

I hear these types of stories every week here in Northern Virginia, and we have a strong housing market in comparison to many other areas of the United States.

So what’s the plan? People are waiting to hear. People are waiting to buy or sell homes until they have an understanding of where the housing market is headed. Yes, it’s true — the housing market is improving in the DC metropolitan area. I believe it will continue to improve yearly, but I would still like a clear understanding of what the presidential candidates plan to do. I’m sure my client the nurse is curious too.

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Don Joy October 24, 2012 at 12:32 PM
Housing issues have come up in the debates. In the first debate, Mitt Romney had me cheering as he described at length what an abomination the Dodd-Frank bill is, and how it is causing confusion and long delays among mortgage lenders as to exactly how to comply with it, how it basically perpetuates the problems it was supposed to address(virtually all government programs do that), how it protects the huge banks and virtually guarantees the ongoing corruption by sanctifying them as "too big to fail," and so on.
Don Joy October 24, 2012 at 12:41 PM
It is important to remember that Dodd-Frank was written, pushed, and passed by the same culprits that were some of the chief ringleaders in causing the housing crisis. As with all socialists who get elected and re-elected over and over again posing as do-gooders, people like Chris Dodd and Barney Frank first spent many years promising and enforcing "affordable housing" schemes that forced banks into very unnatural and distorted practices that altered their erstwhile prudent lending standards and business models. Much of this really got going back when Barack Obama himself was suing CITIBank in 1994 as ACORN's attorney, using the Community Reinvestment Act (which was put 'on steroids' under do-gooder Bill Clinton) to shake down major banks and force them to make loans they otherwise had the good sense not to make. The forced lowering of standards led to the corruption of the entire industry, and eventually the entire financial sector. Then, when the housing bubble they helped cause burst and the crisis hit, they immediately blamed the banks whom they'd strong-armed and cajoled into the byzantine and dubious financing schemes, and shoved the Dodd-Frank bill through as ostensibly some kind of remedy. Dodd-Frank is just another Trojan horse nightmare of bureaucratic socialist control-freak central planning (as is the Obamacare bill) disguised as "helping people," "protecting consumers," etc.
Don Joy October 24, 2012 at 12:42 PM
Note to voters: ANYTIME you see/hear a politician advocating some kind of program to make something more "affordable," as in housing or health care or food or whatever, do everything you can to stop them in their tracks and throw them out of office. Socialism always results in severely distorted markets, skyrocketing costs, shortages, rationing, and ever-metastasizing bureaucratic tyranny over what should be free market decisions among free individuals that ensure healthy competition, production, and drive prices down. The laws of economics cannot be legislated out of existence, nor can they be ignored.
Don Joy October 24, 2012 at 12:49 PM
I find it curious that the case you used, the nurse client of yours, says she pays her bills, yet finds it unnecessary to honor the contract she signed when she bought her house. Why did she agree to such an arrangement in the first place--the interest-only mortgage? You refer to her as an "independent 30-year-old" in the same breath with which you describe her as being not independent at all. This is the kind of lack of rigor in our thinking and values and decisions, as a country, which led to the economic crisis--the refusal to subject our own thought processes and terms/standards to the kind of discipline and rigor that prevents corruption.
Don Joy October 24, 2012 at 01:37 PM
I very recently had a home-buying/mortgage borrowing experience through Wells-Fargo which was so excruciatingly awful and maddening that I told them (Wells Fargo in Vienna) over and over again that I would write on blogs, and anywhere else, to warn people not to do business with them. It was the worst customer service I have ever experienced in my life, and I firmly believe that the unholy wedding of big-government over-regulation of the banking industry, along with the biggest banks being declared "to big to fail" in the Dodd-Frank bill, has much to do with what went wrong. What incentive does any business have to provide good customer service if the federal government has created a situation where they are not allowed to suffer the consequences of not doing so, and go under? It is up to those of us who are affected, and care, to do what is necessary in order to bring about change.
Don Joy October 24, 2012 at 01:38 PM
I and my family were treated by Wells Fargo with casual indifference, dishonesty, and negligent incompetence in the process, once we had committed substantial earnest money to our purchase and there really was no turning back--our rental lease was due to expire and Wells Fargo had repeatedly bungled and botched things so badly that we missed our closing date, and as the weeks passed with no real indication that their team even knew or cared what they were doing to resolve the situation, and our loan agent even lied to us when we confronted her about our unanswered emails, we wondered just where we were going to wind up living. The Wells Fargo team repeatedly lost documents and wrongly claimed--many weeks after we had submitted them--that we had not completed them properly, when we had. I cannot adequately transmit here how frustrating and unprofessional the Wells Fargo team that we dealt with were in all of it.
Don Joy October 24, 2012 at 01:44 PM
Eventually, after I resorted to rather forcefully complaining and confronting Wells Fargo bank management about the whole situation, things got moving and we did close on the loan, and moved into our new property. The bureaucratic nightmare didn't end right away, as more confusion on their part regarding the endless paperwork cropped up immediately, and only after again confronting them forcefully did it get resolved. My point in writing all this here is to illustrate what I see as the main problem, and to exhort whoever reads it to join me in working to rectify it--for far too long, we as a society have refused to simply allow businesses to hire who they see as best for their operations, and to do business with who they wish to do business with. We have been brainwashed to accept the falsehood that "diversity" trumps rigorous standards. We have continually bailed out incompetence and failure, in the name of "equality," and we have covered over the underlying flaws which led to the failure--it's just too unpleasant to really address and correct them, isn't it? It's much easier to delay the reckoning, and pretend that real accountability is some kind of "unfairness."
Don Joy October 24, 2012 at 02:00 PM
By the way, and relevant to the situation I described, my wife and I were completely debt free and with the credit scores among the very highest possible as we sought to obtain our mortgage. I qualified for a VA loan, and even though my income is very modest, there simply is no excuse for the way Wells Fargo repeatedly botched the process and blew us off, left us dangling as their team all took turns going on vacation, etc.
Mike October 24, 2012 at 02:24 PM
...I wonder if Don Joy is passionate about this topic, and might have something to contribute to it???
Don Joy October 24, 2012 at 02:31 PM
One of the most frustrating aspects of it all was that the entire Wells Fargo team, including underwriters, showed themselves to be unable to comprehend the most basic of entries on Veterans Administration forms--they rejected some of my forms many weeks after I'd submitted them and our closing date had already passed, saying that I'd filled them out improperly or failed to enter data on certain lines, when the fact was that they simply couldn't--even after I explained the entries or non-entries to them--understand the most basic aspects of why, for example, someone who is not on active duty should not reply at all, should neither check "yes" nor "no," on a statement which explicitly pertains only to someone who is on active duty. This kind of problem happened more than once. Rather than accept that they were wrong, they had me alter the form itself--cross out the VA's own printed text on the line. I felt like I was dealing with derelicts! This is their JOB, to know what the hell they are doing in their actual profession, not to repeatedly get it wrong and then insist that the customer pretend along with them, and alter the documents, when they cannot even figure out why they blew it.
Don Joy October 24, 2012 at 03:25 PM
Ellen Moyer October 24, 2012 at 07:07 PM
In the case of my nurse client and others like her....these people are not slackers. They did not understand what they were getting into with their mortgage and were assured the could easily afford it. She is not behind on her payments and needs to get out as there will be hefty "special assessments" due in the future. (There is a special assessment coming up for $5000 which she will be paying) She is selling her home as a short sale therefore she is honoring her commitment unlike so many others who just stopped paying their mortgage altogether and walked away. That has really destroyed the housing market as it's brought down the prices of so many homes whose owners have been paying their mortgage even if they are upside down on their loan. Thanks for your comments!
Don Joy October 24, 2012 at 08:43 PM
Thank you for your reply.
Don Joy October 24, 2012 at 08:54 PM
I just have a hard time thinking of people, who claim to have not understood their mortgages, as responsible individuals--a responsible person would have done their basic due diligence. With an undertaking as significant as buying a home, you would think that people would take the trouble to ask questions, do their homework(no pun intended), and mind their p's and q's. I know that most of these cases of people claiming not to understand what they were getting into are dubious. By the timing of her purchase, as you said 7 years ago(at the height of the bubble, or approaching it) I am inclined to see her as one of those who saw an opportunity to ride the rising prices all the way to the moon, then had their illusions shattered all around them when the bubble burst. Call me harsh, but honestly how long are we as society going to keep up these charades, pretending that the piper will never come due? This is what we face as a nation, and why this election is so important. We are 16 trillion dollars in debt, facing many trillions and trillions more in unfunded liabilities. We can't keep kicking the can down the road, voting for feel-good con artists who promise us more goodies and benefits.


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