Do you remember back a year or two ago when nearly every couple you worked with had already bought a house, before they got married? Do you know why that trend was so huge? It may not be why you think.
Look back at the time when the housing market was at its zenith. Financing was easy and money was cheap. You could just about bet that your home value would skyrocket with nothing more than a little time. The banks thought so too and were eager to lend you money on the myth of rapid equity growth. You could get a mortgage with zero down and little or no credit rating. Got a job? Get a house.
Second mortgages became a lot of people’s savings accounts. Are you starting to see where I’m going with this?
How many of those high end weddings we did were financed by a young couple’s second mortgage on that brand new home? Now do you see why so many of them had already bought a house? They were using it as a financial instrument to finance the wedding of their dreams.
This all came to light recently while talking to a young couple I know. They were worried about losing their house. They were upside down, owing considerably more than it’s worth. As I asked them how that had happened the gory truth started to unfold. It seems that it wasn’t just them; most everyone they knew that had gotten married in the last 5 years had done the same thing. It was the easy way to have that fairy tale and seemed pretty safe at the time. The home’s value would continue its meteoric rise and pay off the wedding in no time. Except the bubble burst.
When people ask me when the wedding industry is going to get back to what it was, I haven’t been very positive. This is the reason why. I believe that like the housing market, the wedding industry of the last 5 years was built on smoke and mirrors. If you read my About section on the Wedding Dish, which was written back in 2005, you’ll see that I wasn’t buying it then and I’m not buying it now. Oh, trust me; it was a wave I was happy to ride just like everyone else. I couldn’t fathom what was fueling it but I knew that something would eventually happen to cause it to reach critical mass.
We are just now beginning to see the brides that have come to the realization that the golden goose is dead.
It is absolutely critical that you recognize this correction in the market. I have been preaching evolve for the last year. Now do you understand why?
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