Teaser Rates and Adoption

Adoption these days can be quite a strain on the pocket book even when things are going well. I wonder how the current economic downturn is going to effect things.

In looking at the prospective parent profiles on the adoption agency websites one notices that these hopeful couples always seem to include lots of pictures of their house. Overwhelmingly these are large and comfortable and of recent vintage, in good school districts. These houses offer all the amenities that a kid could want, large bedrooms (sometimes creepily, already decorated for the perspective child), many bathrooms, large yards, and swimming pools. Heck, they even already have a dog, usually a mutt adopted from a shelter, the perfect companion for the adoptee.

It occurs to me that many of these gated and planned perfect family abodes are probably worth significantly less than they were a year ago. How is this going to affect these PAPs dream of child ownership? What if the American Dream just that, a dream, for some now?

What is one to do if there isn’t equity to chit out to consolidate all those credit card bills from IKEA for the baby furniture? Or worse yet, what if that zero interest equity only mortgage is adjusting into something that turns the perfect family abode into a “we better cash in the 401ks until we can get this money eating monster sold” proposition?

It leaves very little money for those adoption fees.

Not only is this a problem for the PAPs, it a great big problem for the agencies. Adoption could become a business where demand no longer out paces supply. When you have more buyers for your product than you have product, it’s all champagne and caviar. But when demand slumps, you can easily get into inventory problems. Ina business where your product loses value as it ages, you don’t have to be an MBA to know this can seriously cut into cash flow.

There is also the pressure form discount concerns to take into account. It is well known when money gets tight and consumer confidence goes down, the discount end of retail is more easily able to sustain growth, as consumers go looking for bargains. If PAPs start to turn to those who offer older children or fostering, this could expand inventories even more for those in the higher end. It may, in fact, result in high end concerns looking to lower end outlets to move older, less desirable inventory, at a significant loss.

In the short term look for competition within the higher end to become fierce as a smaller pool of consumers dollars are fought for by use of aggressive advertising campaigns

If current economic trends continue look, for deep discounting and expanded advertising as those involved at all levels look to move product. If poor conditions extend beyond current forecasts, look for a general shrinking of the overall sector as many consumers will be unable enter the market at all.

Lessening exposure in this segment is advised.

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5 thoughts on “Teaser Rates and Adoption

  1. Thank you Addie, that was great. I totally needed that. You are so right! Wouldn’t it be brilliant to see the demand for infants drop! Suddenly the welfare of the children may come back into focus… ehh i doubt it, they’d probably just try new marketing attempts and drop the prices dramatically. Whites may then be the same price as the other races.

  2. great piece, thanks! it’s scary how well you can adapt that economic forecaster tone….maybe we could get it run on “Marketplace” and see how many serious responses from agencies and PAP’s you’d get!

  3. Well, Addie, there have been more requests for ‘fundraiser ideas’ on Y!A, lately. Guess the PAPs are feeling the pinch. Thanks for the chuckle!

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