For people in California and across the country, the last financial crisis was often particularly devastating to their involvement in the real estate market. The financial crisis began with serious problems in the home mortgage market, and many people lost their homes to short sales or foreclosures during that period. However, a growing number of individuals who lost their homes due to the financial crisis are beginning to move again on the path to homeownership.
Called “boomerang buyers,” these people are once again looking to expand their family wealth through owning real estate. This growing interest could help support the housing market. Sales are down in 2019 with a 6.6% decrease from the prior year. The largest group of people negatively impacted by the crisis are aged 35 to 64. So far, young people have been helping keep the housing market strong as young buyers comprised a third of all residential home sales, an increase of 30% over the year before. For people between 35 and 44 years of age, homeownership grew from 58.9% to 61.1% between the fourth quarter of 2017 and the same quarter in 2018. Some experts say that this increase was partially driven by the return to the real estate market of these “boomerang buyers.”
Between 2006 and 2014, there were 1.9 million short sales and 7.3 million foreclosures. The collapse in the market was driven by a bursting home-price bubble and the widespread use of subprime mortgages with adjustable rates.
After a foreclosure, people must generally wait seven years to qualify again for a mortgage. This period has ended for many of those who lost their houses in the crisis and may now be looking to, once again, enter the property market. People who are interested in purchasing residential real estate can work with an attorney to negotiate a successful contract.