The Meridian real estate market recently reached a way-point on the road to recover when Fanny and Freddie re-categorized our market as no longer being a depreciating market. There are a few other changes that will also have a positive effect, but first the change in classification.
The re-categorization by the federal corporations will have a huge impact on the type and depth of financing that buyers in Meridian will be able to receive.
The most significant of these buyer impacts is that 100% financing will return due to the fact that buyers can now get mortgage insurance again for more than 90% purchases. When any market is in a state of decline the mortgage insurance companies will refuse to insure loans due to the fact that the lack of equity makes it easier for any home owner to simply walk away when things get tough. It makes sense if you put yourself in their shoes.
Since people will now be able to get help with their down payments and even purchase without any equity or money down from themselves, buyers will start to buy the REOs and other good deals out there now, especially around Meridian.
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.
The benefits do not stop with home buyers, rather they extend all the way to homeowners as they are eligible for drastic savings on their refinances, which may have been completely impossible prior to this change. Any fact that substantial is worthy of repetition. Now Meridian property owners who were seeking loan modifications can get approved much easier for a refinance loan after these changes start to get the local mortgage industry on track.
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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