Have you or one of your family members suffered through the foreclosure of a home or negotiated a short sale of your home during the Great Recession?
There may be good news for you, if you still desire the advantages of home ownership.
Last month, well-known economist Elliot Eisenberg said in a blog: “In 2015 about 500,000 households that lost their homes to foreclosure or a short sale back in 2007 will, if their finances are sufficiently solid, be able to again qualify for a conforming home loan. In all, over 7 million such households will be added back to the pool of potential homebuyers between now and 2022, with more than a million households being added in years 2016 through 2019.”
These numbers are profound, and they speak to the current state of our economy. None of us will soon forget the economic impact of the housing crisis, and it is encouraging to see the economy and real estate market bounce back.
In fact, in his latest blog, Eisenberg states “Last Friday’s employment report was sizzling. Net job creation in January came in at a better than expected 257,000, December employment growth was revised upwards to 329,000 and November’s to a whopping 423,000 jobs.”
This job creation will allow potential homebuyers to reestablish their ability for home ownership.
We find that this is occurring in both Colorado and La Plata County. Reports from the Colorado Association of Realtors note the dramatic drop in lender-mediated properties (foreclosures, lender-owned, short sales or other distressed properties).
In just the Southwest region of the state, we saw a 30 percent share in 2011 of lender-mediated properties, and only 7 percent in 2014. These numbers indicate the total number of foreclosed properties has decreased, which would lend support to the idea that a large part of the market is no longer centered on foreclosures and bank-owned properties. It would make sense that those who lost homes to foreclosure or short sale are now considering homeownership again.
There are real-estate brokers in our area working with buyers that have lost a home, and Aaron Sinberg of Sinberg Capital Lending has also worked with buyers in this position.
He notes that the requirement for another mortgage loan is seven years on a foreclosure and four years on a short sale or pre-foreclosure. Although specific financing requirements may be necessary for those who have experienced past short sales or foreclosures, the additional guidelines aid in ensuring the ability for homeowners to fulfill loan requirements.
The long-term benefits of homeownership (appreciation, tax benefits, fulfillment of the “American Dream”, etc.) seem to motivate buyers, even those who have experienced a foreclosure or short sale. We look forward to the upcoming years, and the new opportunities for buyers who have suffered the previous loss of a home.
Don Ricedorff is a Realtor at The Wells Group in Durango, and a past president of the Durango Area Association of Realtors. He can be reached at firstname.lastname@example.org