Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Tuesday, June 22, 2021
I started working in real estate way 18 years ago, way back in 2003. Between 2003 and 2006 home sales and prices shot up quickly -- and then sales slowed dramatically and prices declined slowly.
Does it feel somewhat similar now? We're seeing significant increases in the number of homes that are selling -- and significant increases in our area's median sales price.
But -- at least one thing is definitely different right now compared to that 2003-2006 timeframe...
Today's home buyers seem to be very well qualified to buy.
Back in the early 2000's when sales and prices were careening upward, some/many buyers were only marginally financially qualified to buy the homes they were buying...
- Some buyers were just barely qualifying to buy based on their financial situation.
- Loan standards were very loose and buyers were being approved for loans that they might not really have been qualified for.
- Some buyers were becoming qualified to buy with a low introductory mortgage rate that would then rise to a higher rate within a few years of their purchase. This got them in the door - but made it difficult for them to keep making payments once their interest rate rose.
These days, things are quite different...
- Many buyers are qualified well above the purchase price of the home they are purchasing.
- Loan standards are very strict and buyers are facing intense scrutiny when they are applying for a mortgage. The result is that buyers who are approved for loans really are qualified for those mortgages.
- Interest rates are so low that most buyers are getting fixed rate mortgages that will keep their payments level over time aside from changes in their insurance and real estate taxes.
So, yes, the market is heating up like it did in 2003-2006, but this go round, home buyers seem to be very well qualified to buy what they are buying. That would seem to be good news for the future stability of our local housing market.
