Centralized vs. Free Market decisions
There's a "one size fits all" commercial on TV currently, where people decide on a purchase (car, pet, etc.) only to be told that they can't buy what they want, because they have to buy what someone else chooses for them.
It reminds me of our government investing our money in General Motors without our agreement. (The Federal Reserve, whose charter doesn't include manufacturing automobiles, holds 500,000,000 shares of General Motors.) You thought you were in the real estate business? You're in the automobile business too!
GM Silverado inventory glut at 122 days
Flush with your money (not theirs, not their investors) General Motors produced many more Chevy Silverados this spring than any economist [not on the government payroll] would have deemed prudent, and they're still on the dealers lots.
They're likely to stay there, too. The economy doesn't support their production numbers. At the current rate of sales, it will be November before the current stock is sold. According to Bloomberg this morning, there's a 122 day inventory of average sales for this model at GM.
Ford F-150 sales inventory at 79 days
By comparison, Ford Motor Company, which has zero Government investment dollars, is selling their inventory of F-150 pickups in 79 days, and the F-150 outsells the GM Silverado.
From 2002 until 2010, GM posted similar inventory numbers for its pickups. The SNAFU came when the government got involved, and GM managers could make production decisions without putting their jobs on the line.
REAL ESTATE IMPLICATIONS
The longer it takes for our economy to wring out excesses and get back on a solid footing, the worse it will be for agents and lenders trying to survive in this artificially deflated real estate market.
I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender
SUNSTREET MORTGAGE LLC ~ Correspondent Mortgage Bank
Offices in Mesa, Tucson, Sierra Vista & Nogales