Property sales have dropped alarmingly over the course of the summer and the grim reality of the situation is that supply far exceeds the demand for homes at this point in time. The fallout of all of this is that the Obama administration might be forced into making a prickly decision soon; should they continue to support current home owners or let the market bottom out and support future home owners? It’s the proverbial devil and the deep blue sea conundrum, and it’s an unenviable situation to be in. It has been a year and a half, and everything has been tried by the Obama administration but all of them have fallen flat and failed to inject any zest into a moribund market.

The avowed aim was to steady the market before whetting consumer appetites that would be ready for the renaissance that was bound to come. That never happened, and an increasing number of people are becoming vocal in their belief that the government should stop intervening in what is a grim situation. It is almost as if the voices are clear in the madness; they are clamoring for the real estate market to crash. But there is logic in their apparently illogical ways, because a crashed market will have low prices that will see buyers pour in by the droves and bring stability to a market that has been rocking since months and months now. Billions were spent trying to prop up the market, and perhaps that has been an unnecessary expense.

The need of the hour is to make property prices affordable, even reasonable, and to keep on trying to kick-start the market is folly. The government can then pull out the safety nets, but what of the millions of homeowners who will see their house value drop further? Any loss in real estate equity will see them cut back on consumer spending. The real danger is if they see a house going for sale that is cheaper than paying off their mortgage, in which case they might just default on mortgage payments. How devastating would that be for a market in decline? The administration has gambled on a recovery that is just not forthcoming, and perhaps the sensible option is to just bail and apply that money elsewhere when the chips are down.