Romney Offers Hands-Off Approach When it Comes to Housing

Polls show Mitt Romney well ahead of GOP opponents for Tuesday's Republican Presidential Primary. SOURCE: Washington Post

With an average of 38.5 percent, Mitt Romney’s lead in the polls remained consistent heading into tomorrow’s New Hampshire Republican Primary. On Tuesday, Jan. 10,  the Granite State will reveal its preference for which one of the feisty GOP candidates they want to face President Barack Obama in the 2012 presidential election.

However, for a man who owns a lake home in New Hampshire, as well as some choice beachfront real estate in La Jolla, CA (which Romney will remodel after the election) and Boston, Romney has been criticized for his slim and inconsistent views on U.S. housing policy.

Romney, along with other GOP candidates Newt Gingrich, Rick Santorum, Rick Perry, Ron Paul and Jon Huntsman, has focused much more broadly on the U.S. economy, particularly jobs. He has not specifically — or factually — addressed the housing market. In his 59-point plan for America, that overall addresses the sluggish U.S. economy, Romney does not single out housing as a vital clause in his plan. Romney has only offered cursory “analysis” of why the housing market tanked and what ought to be done to stabilize home values and remedy the foreclosure hemorrhaging.

In October, Romney criticized the Obama administration for not fixing the housing crisis. Romney criticized Obama’s  “hands-off” approach to dealing with the busted housing bubble. However, Romney had also said the most effective way for the market to correct itself was to allow the foreclosure process “…run its course and “hit the bottom.”

Has the former Massachusetts governor flip-flopped on positions about what caused the downturn and what should be done to remedy the housing market woes?

In an e-mail late last year ahead of Obama’s visit to foreclosure-wracked Nevada, the Romney campaign made its most aggressive accusations about how the housing crisis has been handled:

How bad does it have to get before this administration wakes up and seriously tackles this housing catastrophe? Without bold action, millions of more families will lose their homes and our economy will continue to stall. If this administration continues to stick its head in the sand and wait for the housing crisis to run its course, I am afraid the president could end up losing his current residence in 2012.”

But during an editorial board meeting with the Las Vegas Review Journal, Romney stated that allowing the housing market to hit bottom would pave the way to recovery.

As to what to do for the housing industry specifically — and are there things that you can do to encourage housing? One is, don’t try and stop the foreclosure process,” said Romney. “Let it run its course and hit the bottom, allow investors to buy up homes, put renters in them, fix the homes up, and let it turn around and come back up.”

Romney’s camp has sought to make the housing crisis one of the Obama administration’s greatest failures, citing in their campaign material:

  • Home Prices Have Fallen Under President Obama. The Case-Shiller National Home Price Index (a quarterly gauge of single-family home prices) was at 131.72 in the first quarter of 2009. The index rose as high as 137.75 in 2010 before falling again to 128.29 in the first quarter of 2011 – a lower level than when President Obama took office.
  • Bank-Owned Distressed Sales Now Comprise Over 30% Of The Real Estate Market. “Before the housing collapse, the number of distressed sales historically made up a small percentage of the market. In the first half of 2011, however, bank-owned homes represented more than 30 percent of total sales, which is far above pre-2006 levels of less than 5 percent, according to Clear Capital. … In 2010 there were 1.7 million distressed sales, up from an average of 450,000 per year during the pre-collapse period from 2000 to 2005…” (Venessa Wong, “Real Estate Forecast: Home Prices Limp Into 2012,” BusinessWeek, 7/8/11)