While homes in Southern California have been known to be in one of the priciest markets in the country, hope looks to be coming to those who are vying to purchase a home in the region. Home price gains have slowed and home loans are becoming more readily available to borrowers on all levels of the spectrum.
According to the latest data provided by Altos Research, a California-based real estate analytics company, home prices in San Diego have leveled off after a period of sharp gains throughout the first half of the year. As of July 11, the median single-family home value in San Diego has flatlined at $650,311 since the latter weeks of June.
This has been a near-universal trend across the cities of Southern California. A recent report in the Los Angeles Times indicated that home price gains grew at their slowest pace in nearly two years in Los Angeles County in June and were practically flat in Orange County. For many, this stall in the blistering pace that home price appreciation had been setting is a very welcome sign that another bubble isn’t about to occur.
Pre-Recession Trends Return to San Diego
The regulation of home price gains has allowed many home buying practices that haven’t been seen since before the recession to return as an option for potential home buyers. One of those practices is the no-money-down mortgage. While this was one of the leading causes of the housing bubble burst, brave lenders have brought the option back after a two-year hiatus showing that confidence is returning in the San Diego housing market and in home buyers.
One lender that is making the gamble on San Diego home buyers is the Navy Federal Credit Union, which brought back its zero-down product known as HomeBuyers Choice after putting it on hold in 2013. This option allows buyers to borrow with zero money down, but charges a higher interest rate while the lender holds the loans in its portfolio.
“Several years ago we started making them again because the performance of the people that we lent to even during the recession was fantastic,” said Cutler Dawson, the credit union’s chief executive, to U-T San Diego.
Although this option isn’t exactly readily available in most markets, it has become a popular feature for those who want to take advantage of the temporary stall in the Southern California housing market that has continually priced buyers out of the market.
“It is a boutique product offered by smaller lenders that are willing to keep these mortgages on their books,” Dawson continued. “Among those smaller lenders we see examples of credit unions, but there might be small, locally owned banks, especially in rural areas, that give zero-down loans to longstanding customers. But those would be unadvertised and unknown to me.”
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