Something very substantial in the Meridian real estate market occurred this week when the federal government changed the market classification for the Boise area. There are a few other changes that will also have a positive effect, but first the change in classification.
Freddie and Fanny both recently took Boise off of the “depreciating” market category which will have some very significant impacts on the types of financing available to Meridian area buyers.
Since this substantial change has occurred, it will usher in the return of 100% financing options for home owners and buyers, since prior to this point the most the typical home buyer would be able to get would be around 90%. When the Meridian real estate market was labeled as a declining market, the most any buyer could get financed was about 90% because many lenders require mortgage insurance and insurers will not bet on a declining market. It makes sense if you put yourself in their shoes.
Given that the buyers can purchase with nearly all of their costs paid for or rolled into their home loan in one fashion or another, buyers will be snatching up the great deals that are in the Meridian real estate market right now.
With low crime, good schools and excellent police and fire districts Meridian has been the hot spot for the local real estate market for several years. Meridian homes buyers will not hold back in light of these recent advantageous developments so watch and see how fast the homes go pending.
Even home owners stand to reap a gain they did not sow with this recent change in that they can now refinance their homes when it was previously extremely difficult. Despite being a very significant change it still bears repeating. Many homeowners who were struggling to find loan modifications to make retaining their property in Meridian Idaho easier, can now use a refinance as their primary or back up financing option.
This effect this may have on the Meridian real estate market will be that inventory may be stalled a bit by homeowners who have started to see the light at the end of the tunnel.
With looming legislation on the horizon, banks will soon have the resources and permission to rent out their own REOs, once they pass control on to a holding company.
What this means is that the REO inventory that was previously flooding the market will now be slowly releases as the market can absorb it. It also means that banks will be able to recover some money from the REO property as they can rent the REO property out until they are putting it on the market. Any renter that accepts a rental agreement for an REO property has to willing to allow Realtors to show the property as needed as well.
This could have a bit of a detrimental effect on local rents rates as cheaper REO rentals could drag consistent rent rates lower. Given its initial mission and intent the law will overall buoy the real estate market by limiting supply and causing a temporary “kink in the hose” so to speak.
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