OUR VIEW: We will weather the tough economy

Staff Editorial
Published: October 4, 2008

» SUMMARY: The economic future looks bleak, but we will get through it.

It seems our housing crisis is getting exponentially worse by the month.

As of Sept. 3, there were 327 properties foreclosed upon this year in Culpeper town and county. Compare that to 180 in all of 2007 and 33 in 2006.

And that light at the end of the tunnel could be a freight train. Nancy Heflin, president of the Greater Piedmont Area Association of Realtors, said her agency is expecting another flood of foreclosures this fall.

Remember all those adjustable-rate mortgages that helped people buy homes they otherwise couldn’t afford? Some were even written with no money down. Well, those rates are still adjusting upward, and many of those people haven’t been able to keep up with them. Others are struggling to keep up.

Throw declining home values into the mix and you have an economic future that looks pretty bleak.

The federal government can bail out the firms that took on the risky mortgages, but that’s only an expensive Band-Aid.

What we really need is more personal responsibility from all involved. Buyers need to be responsible enough not to buy a $400,000 house when they can only afford a $150,000 house.

Real estate agents need to be responsible enough not to try to sell people more house than they can afford — even if that means a smaller commission check.

Lenders need to make sure the buyers are likely to be able to keep up with payments before making loans. Putting no money down on a $200,000 house and having a job probably isn’t enough.

As a nation, we have a long history of getting through economic hardships, and we’ll get through this one. But just as it took a few years for us to get into this mess, it probably will take a couple of years to get out of it.

Make no mistake, it’s going to get a little tougher to get a mortgage in the coming years — especially for those with bruised credit. But for those who can get mortgages, it’s going to be a buyer’s market with reasonable home prices and less-risky mortgages allowing for decent rates.