Ten years ago, the Great Recession took place after the real estate market crashed. Fast-forward to today, and data show that the current residential real estate market looks a lot like the one that triggered the recession. Still, there are many differences between the pre-recession market and the modern market in California and other parts of the United States.
First, unlike in the 2000s, lending standards are much more stringent. In fact, they are the strictest they have been in two decades. As a result, the median FICO score for home loans is 734 this year compared with only 700 back in 2006. These standards are in place because they play a major role in the real estate market's health.
Flipping -- or renovating homes and then selling them to make a profit -- is also different today than it was years ago. Although flipped houses comprised almost 9 percent of sales back in 2006, the figure was a much more modest 5 percent last year. This has happened due to lenders' tighter lending standards, further proving the value of these standards in today's market.
In the current residential real estate market, completing the purchase or sale of a property can understandably be overwhelming due to the many aspects of a real estate transaction that are involved. Missing even just one step or detail could easily have negative long-term consequences. However, an attorney in California can provide the guidance required to make sure that all I's are dotted and all T's are crossed from start to finish.
Source: realtor.com, "10 Years After the Recession, Boom Times Are Back in Real Estate," Cicely Wedgeworth, Nov. 13, 2017