There is one persuasive reason why St. Cloud homeowners (and prospective homeowners) don’t hear much about the likelihood that a new “housing bubble” could be in the making.
For any St. Cloud homeowner who’s had the comfort of watching their property’s value grow steadily for years, a mere mention of the words “housing bubble” can squelch the enthusiasm. Even though real estate is “real” in a way few investments can equal, there was the last decade’s property value nosedive. Momentarily, at least, it rained on residential real estate nearly everywhere.
“Housing bubble” was the derisive term that described the previous run-up in prices that subsequently “popped” when sellers could no longer find buyers. A large part of the chaos was due to the home loan industry’s inability to finance mortgages at the previous valuations. In fact, for a while, even well-heeled buyers could scarcely find financing at any valuation.
In 2008, the bubble metaphor seemed especially apt because the “pop” came so abruptly. When things go south suddenly, it’s particularly unnerving. But today St. Cloud homeowners can take comfort in at least one reason why today’s circumstances bear little resemblance to what happened ten years ago.
The Mortgage Bankers’ Association charts something called the “MCAI.” It’s a reliable measure of the availability of home loans, measured on a scale from 1 to 1,000. The higher the number, the easier it is for applicants to obtain home loans. A chart shows how, in the three years leading up to the height of the bubble, the MCAI traced an almost vertical line from 370 up to more than 850—which then nosedived to 100 in the following 20 months. You could almost hear the “pop.”
Looking at today’s much more comforting MCAI, it shows a shallow, nearly horizontal line extending from 100 to just 183. That’s what’s been happening over the last 10 years, from 2008 to today. No bubble on the horizon—it looks more like a stable foundation.
When credit it too easy to come by, true values can float upward without restraint—and the result is a “pop!” According to the Mortgage Bankers Association data, it looks like that lesson has been learned—and today’s St. Cloud homeowners can breathe easier as a result. Call me for expert guidance in today’s market!
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Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. From Maple Grove to St. Cloud, we have professional Realtors ready to assist! Residential & Commercial Real Estate, Sauk Rapids Real Estate, Sartell Real Estate, Waite Park Real Estate, Rice Real Estate, St. Joe Real Estate, Foley Real Estate. Milaca Real Estate, Litchfield, Maple Grove and surrounding communities. Whether you're looking at buying or selling home in St. Cloud, multi-family units in Sauk Rapids, land in Rockville or any property in Central Minnesota, we are the dedicated professionals to call for your needs. Premier Real Estate Services has offices located in St. Cloud, Sartell, Litchfield, Hutchinson and Little Falls. We intend to be your PREMIER source for all your Central Minnesota Real Estate Needs.
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Last week, in contrast with the nearly unanimous optimistic forecasts
""Doug is a great realtor. We have used him twice. Once to buy our first house and then when we sold and bought another. He is responsive and allows you time to make decisions that are right for your family. We have referred him to others and will continue to in the future. He truly is a friend of our family for a lifetime. Thanks Doug!""