I am not chicken little, but lets face it, the Pasadena real estate market has been pretty chaotic over the last several months.
We have a lot of different parties to thank for this activity, but mainly, I would say that for the most part, the lenders have given us this lovely gift.
After pushing ridiculously, whats the word that was used - oh yeah - ˜creative financing products on unsuspecting Pasadena home buyers, Pasadena home sellers AND buyers are now feeling the effects.
READ MORE: Pasadena Real Estate Guide
So where is the Pasadena Real Estate Market overall now?
Looking at Altos Research statistics, there are currently 474 single family homes on the market in Pasadena California. These homes have been on the market for an average of 117 days. Half of these listings have entered the Pasadena real estate market in the last 77 days.
As you can see, the inventory of Pasadena single family homes is increasing dramatically and the median price is on the down swing. Price per square foot has moved from over $500 per square foot to $441 per square foot.
So here we are, going from the lenders giving anyone who is breathing a loan, to going to the other extreme and tightening the requirement to the nth degree.
Mortgage lenders now require:
- A down payment to purchase a home - preferrably a minimum 10% down, most lenders want to see 20% down.
- Minimum credit score of 680.
- Debt ratios of 28/36% - a DEBT RATIO is the allowable percentage of debt in relationship to a borrowers monthly income, used to determine if the borrower is qualified for mortgage loans.
So, if you are thinking of selling your Pasadena home, you need to be creative in making it easier for the buyers to qualify for a mortgage. This, of course, in addition to correct pricing and marketing strategy for the sale of your home.
What can Pasadena sellers do to help buyers qualify for a loan?
- Most banks and mortgage lenders allow sellers to pay up to 6% of buyers closing costs.
- Instead of price reductions, consider helping the buyer with offering cash towards loan buy downs - stay tuned for a series of posts on the different types of buy downs available. A mortgage buy down is simply a subsidy paid to the bank to reduce buyers interest rate. This, in turn, lowers the buyers monthly payment and makes the home more affordable to the buyer. It also makes it easier for the buyer to qualify for the loan.
- Consider a combination of cash towards closing costs and buying down the buyers interest rate.
- Make sure that your Pasadena home buyers have a back up lender or work with a local, trusted professional that is recommended by your Pasadena real estate agent.
READ MORE: What are Buy Down Programs
If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)629-8439 . Thank you!