Buyers' Security Blanket

Despite my teeney bit of experience in the banking industry, I certainly would not consider myself an economist by any means and therefore don't want to delve into my opinions on the pros and cons of the so-called government bailout we're hearing about every day recently.

One thing I'd like to point out, however, is the real estate market tends to be largely driven by consumer confidence. Take, for example, the "home flippers" of a couple years ago who were buying & flipping homes left and right on the confident whim that the market would keep going up. Or look at now, when job security is shaky, we're all uncertain about the future, and essentially people have lost confidence in the economy - the high end real estate market has become a desolate landscape of multi-million dollar mansions left vacant and on the market for months and the other ends of the market aren't doing much better either.

U of M Consumer Confidence Oct 2006 - Present

What am I saying? I think that no matter what the government intervention does to the economy, this intervention in itself will be enough to boost consumer confidence and see a pick up in home sales. Prices can't drop forever and it is uncertain how long mortgage rates will remain so low, so these facts, along with the government acting as a "security blanket" for buyers, should have an encouraging affect on real estate sales.