With home prices continuing to rise and new developments popping up, are we approaching another bubble in the Sacramento market like we saw in 2007?
Looking back 10 years ago, mortgage lending standards were very lenient. With so many unqualified buyers coming into the market, the market tanked and many of them lost their homes. Fast forward 10 years and we see that lenders have learned from that mistake. To get a home loan now, you have to verify your job and income, and your credit score and debt have to meet certain standards.
So what about all those new homes and developments? What happens when the supply explodes and nobody is able to buy them?
If you spoke with a lender or builder today, you’d see that all of these new homes have actually already been bought and simply need to be completed. In fact, if you went to an office of a new developer to buy a home, you’d most likely have to go on a waiting list. You might have to wait a number of months for a new home, or to even get a chance to buy a lot and then start the building process.
Builders have even been held back by a limited number of permits given for things like building roads for homes to go by. Everything is being watched and managed carefully so we don’t end up in another bubble like 2007.
I hope that gives you a better perspective about how the market today differs from what it looked like during the bubble 10 years ago. If you want to learn more or you’re interested in buying or building a home, don’t hesitate to give me a call or send me an email soon. I’d love to help you!