Fuel for the Fire?

In nature, they say that wildfires and forest fires are part of the natural cycle. They clean out the dead and dying vegetation in one violent burn and set seed for a whole new generation of growth. Sure, it can be terrifying to watch as thousands of acres burn, but it may just be what mother nature ordered. In fact, sometimes the best choice is to just let the fire burn itself out until all the fuel is used up.

Of course, the issue gets cloudier when we find out that a fire wasn't started by a random lightning strike or other natural spark. We tend to feel differently when we find out that human negligence was involved. A cigarette butt tossed out a window or a camp fire left untended. When a fire was set deliberately by some nefarious individual, we may even be furious. And when that fire burns houses instead of mere trees and brush, we become enraged.

Which brings is to another buried lead in this article from sfgate.com. While it is certainly notable that the upper end of the market is feeling the foreclosure pinch, more interesting is the acknowledgement that banks are holding back REO inventory to prevent a freefall in property values. If you're a buyer looking for a bargain, you may find this irritating. If you're a pure free marketer, you may find it manipulative. But if you would prefer to see property values stay within shouting distance of where they were a few years ago, this doesn't seem like the worst strategy. Sure, it's in the banks' interest, since they're sitting on more real estate than they ever expected to own. But it's not necessarily bad for regular Joes or Joans who own just one or two properties and would prefer not to see those values decline even further.

How does this relate to a forest fire? The first question is, are we better off just letting this one burn itself out. Are bank-owned properties just so much fuel for the fire and does the long term health of our real estate forest depend on letting that fuel get used up in one massive inferno. (Forgive the belabored metaphor.) Or should should we control this burn and even try to put it out. And does it change the way you answer when you factor in the notion that human greed, negligence, and (cue the conspiracy theories) intent may have been the spark that started the blaze. Where do you stand?