The U.S. Federal Reserve has more rate cuts and a stimulus package, that isn't going help or teach the average consumer responsibility. Hindsight is 20/20 but nobody was able to predict when the housing crash would take place and no one is able to predict the recovery. There will be one but to whose liking and when?
The market was driven up by artificial influences and it is going to some some serious creativity to adjust to where we should have been in the first place. This housing crash is different then adjustments in the past as it is a credit crunch where the consumers have taken out from their equity (a/k/a as "their retirement nestegg") from their home to keep up with their lifestyles. The closing credits that buyers received from the closings on their homes was for maintenance and instead put down for their downpayment. When their home needed necessary repairs it went on their credit cards. Now their credit card interest rates will be up in the 20+%. No income verification was based upon a glorified job title and that created the consumer purchasing a home that they couldn't afford and it was more then likely put under a negative amortization loan which just added more monies owed on the backend of their loan! That's just a sample of the problems that created this crash.
Lenders are now being realistic by rolling back their underwriting policies and guidelines by 20 years. So what can we as Realtors do to make a difference?
Promote Responsible Homeownership. Homeownership in itself, is great because statistics show that a family that owns their home has fewer problems with their children, better schooling - more education, for example.
So, one good way is to hold seminars or small community meetings to discuss Responsible Homeownership. In these seminars emphasize responsible spending. Many people are struggling to make minimum payments on their credit cards and that's one reason why the interest rate on credit cards is skyrocketing. Promote contribution to a True Savings Plan whether it be a 401(k) from work (which many really do not understand the program) or an IRA.
People need to be taught about real world finance issues. Kids need to understand that a CD isn't just for music to their ears - get them on the bandwagon.
Everytime I meet with a perspective buyer, I talk to them about their whole entire retirement plan. Most don't even think about it. Others don't know where to begin. The Fed Rate could be cut to 0% and people still would be able to or qualify to purchase a home! These are challenging times for the local consumers that need real solutions and not the band-aids that Washington is applying.
What ideas do you have that would open the eyes to the people in your neighborhood that would encourage homeownership, a more successful financial lifestyle?