Homes For Sale In Lafayette CA Benefit From More Favorable Lending

by Ron
July 14, 2015

Equilibrium in the Lafayette CA real estate marketThe California housing market is performing better than other areas of the country, and much of this is due to improving employment conditions around the state. The Bay Area market is the clear standout performer in California, given the almost nonexistent unemployment rate within our hotbed of technology.  The San Francisco-based tech market is the key driver of the Lafayette real estate market and it seems as though the majority of homes for sale in Lafayette end up selling to people either moving from the City or using BART to commute there.  Many work in the tech sector.

Favorable Conditions for Homebuyers in California

Homebuyers will find that it is becoming easier to qualify for a mortgage. More favorable and relaxed government regulations have made it more accessible for many to enter the real estate market. In places like California, with higher than average home prices, being able to qualify for a jumbo loan can make a considerable difference in some of our larger metro areas. Also, keep in mind that there is essentially a “food chain” of real estate as people often move up in price range as they build equity in the housing market.  Ultimately, the number of people buying into the upper luxury market segment will diminish if there aren’t new buyers entering the market at its most approachable price points.  According to the Mortgage Banker Association (MBA), the federal government is offering new programs for federal loans and jumbo loans. They also reported an increase in the average number of loans available for the sixth consecutive month.

Improving Terms Impacting Real Estate in Lafayette CA

The increased availability of mortgage credit has driven the offering of new home programs like the 203K home improvement program. There were also some regulations added to stave off improper financial packaging during the underwriting phase of financing.  For those fearful that we may be moving back to overly relaxed credit standards, that simply is not the case.  Borrowers still must be well-qualified for these jumbo loans.  We are simply seeing greater lender willingness to make these loans now.  The increased availability of jumbo loans is especially important to buyers shopping for a home for sale in Lafayette CA.

 This positive news is piggybacked by a report from the National Association of Realtors regarding improved mortgage opportunities for a larger range of credit score holders. The latest numbers showed that home financing had expanded to include scores of 620 and higher and lower down payments between zero and 6 percent.  This is helps to feed the “food chain” at the lower end of the housing spectrum and makes home ownership more accessible to younger buyers who have been struggling to enter the market.  Typically, they are not buying for the first time within the Lafayette real estate market, but they are helping to build the underpinnings of the California market.

The Sellers’ Market in Lafayette Real Estate Ebbs and Flows

Homes for sale in Lafayette CA have been in high demand given the ongoing inventory shortages, but like all markets, ours is like a living being that evolves and changes.  The saying that “timing is everything” in life is certainly true in our Lafayette real estate market.  An acute shortage of homes one week can morph into a surge in homes hitting the market in subsequent weeks.  As an example, we’ve seen about 35 new homes added to our inventory over the last two weeks.  Suddenly, buyers have a considerable number of choices, and the result might be some softening in prices.  We have definitely seen a retreat from the “automatic” multiple offer situation on homes for sale in Lafayette.  It is no longer a forgone conclusion that every house will have an “offer date” and will receive multiple offers.  This is particularly true as we approach August and the beginning of the school year.  Demand typically diminishes.