The deep wounds left by the foreclosure crisis are just starting to heal for many in the Bay Area. A window of opportunity is opening up for people who lost their homes back then to buy again. 7 On Your Side takes a look at how that will impact an already tough housing market.
Over the next few years, RealtyTrac says 114,000 people in the Bay Area who had been ineligible to buy a home could be returning to the housing market. The first big wave of people will be hitting the market this year.
Concord residents Carlos and Maritza Balladares are excited about the prospects of having a place to call home again. They lost their house in a short sale several years ago. Now the mandatory waiting period of four to seven years has passed.
“I know there is a home for me out there. I know,” Maritza said.
These so called “boomerang buyers” hope to rebuild the dream of home ownership shattered during the height of the foreclosure crisis. Maritza says getting over the loss of their first home took a long time.
“That was the house I was going to retire in, so it was hard to let it go,” Maritza said.
The couple has already made offers on half a dozen homes. However, all of those have been rejected because many sellers are in favor of all-cash offers from San Francisco residents who sold homes and want to move to the East Bay. Low inventory and multiple offers are driving up prices.
Matt Rubenstein of Keller Williams is helping boomerang buyers, but he lets them know it’s not going to be easy. He told 7 On Your Side, “I think they appreciate being realistic about it. Nobody wants to run around and look at a bunch of places that we don’t have a real shot at.”
Carlos and Maritza are preapproved for a $500,000 FHA loan. The Federal Housing Administration loan puts the couple at a disadvantage. Stringent FHA appraisal requirements mean sellers will likely have to spend money on repairs. And home buyers with FHA loans can have lower down payments, which makes it less likely their offer will be accepted.
“Most sellers just don’t want to deal with any issues that come up during that,” Rubenstein said.
Even though the Balladares both work in San Francisco, they know they have to move away to find something they can afford. The day we met them, they were looking in Bay Point and Pittsburg. Both homes are listed at $339,000. The Bay Point home is a fixer upper. The one in Pittsburgh is a turnkey, but off a noisy street. That’s something they are willing to accept.
“If that’s what it will take to own a house again, yes,” Maritza said.
After we followed them as they looked at homes, we got word that Carlos and Maritza are currently under contract and, pending final appraisal, will be moving into a new home.
To see the eligibility requirements for boomerang buyers check out the links below:
RealtyTrac 7.3 Million Boomerang Buyers Poised to Recover Homeownership in Next 8 Years