Housing Bubble?

Not so fast. Four reasons why Seattle is not in a bubble.

Reason 2

 Many in Seattle are nervous that the housing market we’re experiencing is a sign of another bubble about to burst. However, as Windermere’s Chief Economist Matthew Gardner has pointed out, there is little evidence that this is the case. Below are four points you may want to consider when determining if the home values we see are built out of brick or built out of straw.

Many in Seattle are nervous that the housing market we’re experiencing is a sign of another bubble about to burst. However, as Windermere’s Chief Economist Matthew Gardner has pointed out, there is little evidence that this is the case. Below are four points you may want to consider when determining if the home values we see are built out of brick or built out of straw.

 
 

We're Over Qualified

Mortgage lending practices have become a lot more strict due to their role in the crisis a decade ago. The average FICO score of an applicant for a conventional 30-year fixed mortgage is now 753 and for FHA loan applicants it is 683. The average denied credit score is 703. To help put this in context, today, 55% of all approved applicants have credit scores of 760+, between 2004 and 2008 only 20-30% of approved applicants had credit scores that high. The conditions that allowed for the predatory and risky lending that led to the crisis are no longer present. Again, pointing to a more stable future for the housing market.