Did you know that 889,000 people once in a state of mortgage distress have already repurchased a home? Welcome back, Boomerang Buyers!

REAL ESTATE: Where are the boomerang buyers?

EBRA GRUSZECKI | The Press-Enterprise | March 5, 2014 | link

DEBRA GRUSZECKI/STAFF PHOTO
A trustee’s sale led by Auction.com outside the Riverside County Courthouse in Riverside, drew numerous investors on Tuesday, Oct.16, 2012 who bid on multiple homes at one time.

This headline definitely caught my eye: “The Boomerang Veers Off Course.”

It appeared in a March 4 newsletter by Irvine-based John Burns Real Estate Consulting, as Sean Fergus makes the point that of the 5.3 million households that lost a home to a foreclosure or short sale from 2007 to 2013, many are regrouping to become homeowners again.

Fergus wrote that 889,000 people once in a state of mortgage distress have already repurchased a home.

Some 1.6 million households will be stuck renting homes for “at least” seven years. Another 2.8 million households from that group will become homeowners again — making it into the boomerang classification — by 2021.

The Inland region of Riverside and San Bernardino counties is predicted to see the greatest activity, followed by Los Angeles and Phoenix.

Now, for the boomerang part: Renter households created by foreclosure and short sale activity declined annually over the past few years — falling from 5.3 million in 2009 to 4.4 million in 2014, Fergus said.

But with FHA loan limits falling $144,650 in the Inland region to $355,350 this year, he predicted that renters hoping to become a boomerang buyer in 2014 and beyond could be disappointed. FHA-backed loans are common in the boomerang buy-pool, he says.

Many in the industry agree the limit that was lowered from $500,000 could keep that boomerang moving in a straight line across Inland Southern California for some time: Houses that are likely to be affected the most are just rolling off the production line.

Read more…

Author: kimhuntkw

We specialize in Real Estate in the Pleasanton, Dublin and Livermore areas of the East Bay in California

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