Good news for sellers and those interested in the general wellbeing of the economy (which is, obviously, pretty much all of us): Homeowners who lost their homes during the financial crisis, which started in earnest in 2007, are beginning to trickle back into the housing market, according to a recent report by the Wall Street Journal.
Because negative credit events such as foreclosures tend to stay on a person’s credit report for up to seven years (although bankruptcies can stay on for 10 years), those who lost their homes in the early stages of the Great Recession have now had enough time to repair their credit, meaning many of them are looking to become homeowners again—or have already purchased another home.
“The dark shadow of the foreclosure crisis is finally beginning to fade,” Mark Zandi, chief economist at Moody’s Analytics, a unit of Moody’s Corp., told the newspaper. “That should be a positive for single-family housing and, by extension, for the broader economy.”
Indeed, Fair Isaac Corp., which is the company behind FICO credit scores, told the Wall Street Journal that about 910,000 people had foreclosure proceedings begin between October of 2007 and October of 2008, but of those nearly 1 million people, about 265,000 showed no evidence of that issue by the end of October 2014. (Of course, some foreclosed upon homeowners were able to repair their credit before the general seven-year mark.)
What this boost in qualified buyers means for homeowners looking to sell is that they could see a big jump in qualified buyers interested in their homes very soon.
The return of these buyers is also a sign that the overall health of the economy is continuing to improve—which we can all applaud.
As always, if you’d like to talk about this or any other issues related to real estate, please feel free to give me a call any time at (714) 348.4000.
I hope to hear from you soon!