They’re called boomerang borrowers, and they could be changing the housing market in the coming months and years.
The timeframe for borrowers who were significantly hit after the Great Recession between 2007 and 2010 to improve their credit score is about the happen, opening the door for a lot of consumers to re-enter the housing market.
Foreclosures, short sales, and bankruptcies remain on a credit report for seven years, which means these items are due to fall off the credit files of 2.5 million consumers by June 2017, the largest of the group over that time frame.
With millions of borrowers coming back into the housing market, should this be the time to sell?
Consider low inventory. There is a shortage of homes for sale in many markets throughout the country in relation to buyer demand. This is economics 101 and happens to create a highly desirable atmosphere for sellers to obtain the best possible sale price and terms. According to Redfin, buyer demand rose by 13.3 percent over the month in September, it’s highest level in three-plus years. We’ve seen buyer demand gain momentum since Labor Day, when a pop of fresh listings hit the market.
Home prices are on the rise after several years of dealing with distressed and foreclosed inventory. As of August 2016, foreclosure inventory included only 0.9 percent of all homes with a mortgage. As foreclosures drop, home values rise, which could mean higher appreciation for home owners.
Low interest rates hovering around the 3.5 to 3.7 percent range make the cost of borrowing money extremely attractive, especially for those boomerang borrowers who are re-entering the market with now above average credit. Modern day loan programs offer a wide variety of options to buyers at various price points and stages to purchase property, so you know that when you accept an offer, the loan process isn’t going to diminish on your buyer, thus securing your sale.
Chances are, it’s been a while since you’ve sold your home—at least 7-10 years. Predictive analytics help optimize buyer searches. Social Media marketing brings visibility to a whole new level. Drones and video tours help create powerful story telling campaigns. All done to attract buyers across the market and secure sales. Welcome to modern day real estate!
Make yourself ready for boomerang borrowers by preparing your home to show in the best light possible. Talk with one of our real estate professionals if you’re thinking of selling your home and find out what they can do for you.