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Banks are still lending to those with sub par credit.
Banks are still lending to those with the minimum down payment of 3%
Banks are lending to a pairs of couples or unrelated peoples.
Banks are still playing fast and lose with income levels.
Banks are still lending to people up to 44% DTI
Banks are still suckering morons into ARMS
Banks are still approving rehab loans with little oversight.
People are still getting lean to qualify then buying a bunch of crap on credit once they have the house.
People are still fudging the numbers with their income.
People are going in with no contingency offers not knowing what they are getting into.
People are still buying into the hysteria that houses will never be affordable again in a certain area so get into a frenzy to buy at all costs RIGHT NOW.
See, I'm not seeing most of that in my area.
Lenders are still very tight with their loans. I work in a real estate office, and haven't seen anyone get an ARM loan in years. I have seen one rehab loan recently, and there was a TON of oversight. I haven't seen any "pairs of couples or unrelated peoples" getting loans. And I haven't seen anyone writing "no contingency offers." And I'm seeing lenders requiring a LOT of documentation on income, job stability, debt, etc. before closing the loan. None of that is anything close to what it was in the 2006 bubble, where we called it "loans to a pulse", meaning if you were alive, you would qualify for pretty much whatever you wanted to borrow.
I'm not a fan of low down payment loans. I heard BofA announced they are going to be doing a new 3% down loan program. So I do agree that one is a problem.
Lenders are still very tight with their loans. I work in a real estate office, and haven't seen anyone get an ARM loan in years. I have seen one rehab loan recently, and there was a TON of oversight. I haven't seen any "pairs of couples or unrelated peoples" getting loans. And I haven't seen anyone writing "no contingency offers." And I'm seeing lenders requiring a LOT of documentation on income, job stability, debt, etc. before closing the loan. None of that is anything close to what it was in the 2006 bubble, where we called it "loans to a pulse", meaning if you were alive, you would qualify for pretty much whatever you wanted to borrow.
I'm not a fan of low down payment loans. I heard BofA announced they are going to be doing a new 3% down loan program. So I do agree that one is a problem.
And it's causing the wealth divide to grow. Banks only loan money to people who don't need it.
In some ways it has always been like this with the brief exception in 2000's
It really was anyone with a heartbeat could get a loan and no US citizenship required...
I found it ironic because there was a time when life would have been sweet simply being able to get financing...
Which really makes sense because in California first mortgage purchase money loans are non-recourse... so the lender only option is taking back the property...
Hard Money Lenders have always operated on this principal... loan collateral.
I'm in a Seattle suburb and prices here are INSANE. We rented a home in Woodinville from 2012-2014 that was appraised at $420K. That same home is worth $780k now.
I was looking recently, and there is hardly anything out there for less than $800K.
I don't know how people can afford to buy here.
Oh come on.
yes house prices are crazy. But you can buy a good lot with an OK home for 500k-700k. And you can buy a nice home 800k. Unless of course you are looking for new build 3,000 + sq feet. Then you are in the 900 plus club..
Right now there is a nice 2,400 sq foot home in a great location that with a 200k renovation would still come under 800k. in fact I might go look at it today.
Interesting to see. My house is a one-story California contemporary (stucco, tile roof) with desert landscaping on a pool-sized corner lot. Aside from the style, much the same: built in 2000, 1,618 sq.ft., open floor plan, upgrades throughout the interior and exterior, spacious master suite, two-car garage. Solid school district and above-average amenities for a Tucson, AZ, suburb. As I noted before, I paid $275,000 in 2006. Today a Realtor would probably list for around $200K but I wouldn't get it. I'd probably have to settle for what that Cape Coral house lists for. A brand-spanking new version of my house would be much farther from civilization, on a tighter lot, with builder-grade everything, and would sell for more than $300,000. Go figure.
1670 sq ft two story home...... King county WA.
it current worth is well north of 800k. Homes like mine were selling for 350-500k just 4 years ago. today just the dirt with a negative 30k home on the lot sells for 650k....
Now drive pretty much any direction from 10 to 30 miles and the land is very cheap indeed.
RE is local, it is regional but it is not national. our country is just too damn big. During the last bubble my area started late and ended a year or more later than other regions.
If that's the case and the people buying houses can really afford them, is there really a bubble? The housing market is cyclical with peaks and troughs and it wouldn't surprise me at all if we're near a peak, thanks to the low interest rate policy. But I'm not so sure there's a bubble that's going to cause a huge drop in prices though.
Our area never really had a bubble break - but we did STALL for 5-6 years where homes sold in 6-12 months versus 2-3 days. But they still got close to asking, and prices didn't depreciate much at all.
We purchased our current home in 2006 at the height of the bubble, but here we are ten years later and we can sell it for about $40K more than we paid for it. That's not a huge jump in price, but equals a 15% increase in value over those ten years. I think that's reasonable.
Having said that, homes are selling almost as soon as they hit the market, leading to multiple bids in some cases, but the STARTING prices are not exorbitant, that I've seen.
I'm in a Charlotte, NC suburb.
Depends how you look at it I guess. You call it 15% over 10 years. At a $40K appreciation, that probably puts your purchase price around $260K. What was it worth in 2011? $230K maybe? In that sense it has now appreciated 30% in 5 years.
I agree that the timing of homes going under contract is getting pretty ridiculous IMO.
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