Can We Help Young Adults Buy Their Hawaii Dream Home by Improving the Economy?
It seems blatantly obvious that the wheels of America’s enviable social construct has fallen into disrepair. I am often befuddled by the surprise of many that this is happening at all. It seems like it could not have gone any other way.
You would think that if you slam your head into a wall and break your face, you might learn that maybe that isn’t the best way to handle a situation, but we did it again – slammed our faces right into that wall and then looked around, puzzled that the economy has crashed and burned, much like the depression.
How the Current Economy Got To Where it is Now
Let’s take a moment to look into that horrific experience and see how we did exactly the same thing this time. In the market crash, it was margin calls that people couldn’t afford to make in the first place in an effort to financially get ahead. After all, that is what everyone wants, to get ahead, to make more money, to live more comfortably.
Unfortunately, greed will not sleep or rest, or stop looking for ways to get ahead at the expense of someone else. As long as that someone else is not known, then taking from them is not so hard. Margins were awarded to people who would not be able to pay for them if they got called in – and guess what? – they got called in and people couldn’t pay; banks, houses, and businesses were lost and the economy slid into oblivion.
Slowly recovery came and the engines started turning again and then Mr. Greed came in again and said, “Let’s not only sign up people for houses they can’t afford, let’s give them incentive to get in so far over their head that the roof will almost certainly crush them in a few years. We will call in their margin and re-adjust their rate and they can either pay whatever pennies they have left, or their asset will be taken away.
It is okay for us though, we don’t have to take the liability, we will sell the loan to someone else, get our fee, and sign up the next seeker of the American Dream and do it all over again. We will get rich. Of course, no one else will, but hey, that is their problem, right?” Same thing all over again except real estate was the target rather that the stock market – same scam different vehicle.
Economic Recovery – The Money Needs to Flow to Everyone
I am amazed that the simple wisdom of “If I help someone else, I am helping myself” is not utilized more often. The only way to keep the engines flowing is if everyone who wants to can make a decent living wage and can afford to buy the things they need and want – the money needs to flow to everyone.
If money only flows in one direction, it gets washed away into the hands of greed who will likely use it to somehow suck every last dime out of the masses. Guess what? Once the masses have no money, they won’t be buying your goods. If you do not pay people making the widgets enough to buy the widgets, the widgets won’t sell and you won’t make any money.
Improving Real Estate
If we want real estate to improve, we will have to start paying people enough to buy them. A low interest rate isn’t any good if you do not have a job or make enough of a salary to pay the mortgage. In Hawaii, it is even more exaggerated. Prices have doubled and salaries have been virtually stagnant.
Buying a home in Hawaii is a daunting task for today’s youth, but if you start young, you can make your way to your dream house without a scam. Start small and work your way up: A studio in a walk-up to a one bedroom condo to a two bedroom condo to a single family home. Unless you get an inheritance or make superb income, this is the way to go. One step at a time.
Take a look at my follow up blog, “4 Tips to Help Young Adults Achieve Hawaii Home Ownership” for some helpful advice on how to start young and accomplish buying your own home or piece of real estate.