I recently ran into George Lane of Guild Mortgage and asked him what buyers should know about shopping for a home in 2015. I was hoping for something newsletter-worthy and George delivered. He said there has never been a better time for first time buyers. Really? Never? I thought back to the juicy tax breaks for first time buyers, realizing that the downside then was a still bleak economic outlook. How about at the very bottom? Doesn’t everyone dream of buying at the bottom? Sure, but lending standards were difficult in Feb 2011 and homes were failing appraisal. And who knew for sure at the time that it was really the bottom? Why now?
For one thing, Fannie Mae has clarified some of their guidelines, causing lenders to feel more comfortable making loans. In other words, standards are likely to be less rigorous than in recent years. There are also great first time homebuyer programs out there with down payment assistance through loans and grants. And of course interest rates are great and the market is strong and appreciating. If you are thinking of making a move but are doubtful about qualifying, it might be worth checking with a loan officer. We know a few and would be happy to make a referral.
Barring a spike in interest rates or unforeseen events, I see continued market recovery in the new year. We have now recovered half of the 40.5% loss in property values as measured from the peak in August 2007. I see 5% appreciation in 2015.
As our market has improved, the number of short sales and foreclosure sales have waned. In Tacoma those are down by 16% from last year while the number of equity sales is up 18%. There seems to be pent up demand to move. We are talking to people who were stuck in their homes just a year or two ago, people who wanted or needed to move couldn’t because their payoff was more than a sale would bring. More and more of these people can now afford to sell. There is a positive feedback situation in place—recovery leading to more sales volume leading to even better recovery.