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The U.S. government?s Wall Street bailout package, or should I use the PC correct term of ?Government Rescue Program,? is not only a bad deal for the U.S. taxpayer, but in my opinion, totally unnecessary.

Last week, the largest Savings and Loan in the United States, Washington Mutual, was taken over in one day in a very, very smooth transaction. Combine that with the fact that in most real estate boom cities last month, real estate sales showed a dramatic increase. Of course the increase was due mainly to buyers purchasing bank owned and REO properties, but these two examples show that our free economic system works. When the price is right, buyers will step up and in many cases, purchase properties above the current asking price.

I think the general public, and Realtors in particular, have to a acknowledge that the boom years of 2000 to 2005 took real estate prices to artificially high levels due to the easy money, easy loan qualifying standards. Rather, should I say ?lack of credible standards?? Now we are going through the payback period.

For the government to come in now with this huge bail-out, would just prolong the housing decline. I would rather see the government stand aside and let the market forces determine the true area average home selling prices.

For those who think a government intervention is the only way out, I would say do it without direct taxpayer money. The undisputed key to this recovery is housing. If the government truly wants to ignite a fire under the housing market, I personally would propose a very simplistic approach that would have immediate results.

The government should pass a bill that allows any home purchaser, owner-occupied or investor buyer, who buys a residential property within the next two years and holds that property for a minimum of three years (and a maximum of ten) to be free of federal capital gains taxes upon selling the property. The potential, tax-free profits on my idea would be a huge incentive for investors to jump back into the residential housing market. This increased demand would clear the built up housing inventory in a matter of months for most areas.

If the government is going to rescue anyone with this new bill, the rescue efforts should be directed not at Wall Street, but at Main Street. The problem today is falling home prices and the built-up inventory of properties for sale. Many buyers are standing on the sidelines. Most investors are totally out of the real estate market. My proposal will solve these problems without spending taxpayer funds.

For those interested in a hard hitting realistic view of our real estate market, you should subscribe to my free RSS feed at: http://www.brokerforyou.com/brokerforyou/

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About the Author

Bob Schwartz is a certified Residential Specialist w/ 30 years experience. Bob?s sites are: San Diego real estate,downtown San Diego real estate 

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[Via Real Estate Articles At Isnare.com]