Economics Suggest A Less Severe Housing Bubble

Find out how different types of RE investment opportunities are making an impact on the housing market!

It is no secret that the housing market today is overvalued, due to an issue of supply and demand; however, it is not a typical bubble. Construction costs have risen, rents around the United States have increased, and the cost of buying a home has become unaffordable for most. If the cost of home ownership continues to rise and outrun construction costs, it creates an incentive for builders to build more homes. Renting these homes for developers and investors is proving to be the way to go given that the quick increase in home values is forcing many people to rent instead of buy.

In contrast with the previous housing bubble experienced in the mid-2000’s, today’s investors are seeking more long-term opportunities. Meaning they purchase a home, fix it up, and rather than turning it over for a quick sale, they are renting it to families who are currently being priced out of owning their own home. While quick fix and flips have picked up in recent months, these types of investments are not making up the majority in the current market, therefore it is unlikely that we will see any bubbles burst in the near future. This is not to say that the bubble is not being inflated by things such as investors looking for a quick sell for profit and a substantial increase in mortgage debt. Just over the past year, more investors have financed their projects with debt, marking the most growth since during the housing bubble we last encountered. The present NAHB/Wells Fargo housing market index shows that single family sales have dropped over the last 4 months and are forecasted to decrease over the next 6 months.

The factors that are capable of inflating the bubble still make up a large portion of the market, therefore it would be precocious to say that the housing market will cool off gracefully.

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About CALCAP Lending

A division of CALCAP Advisors, CALCAP Lending benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. A private money direct lender, CALCAP Lending provides short to mid-term financing for property investors and businesses looking to purchase, refinance, renovate, and construct residential or commercial properties.

Lending FAQs

You've got questions, we've got answers.

What is private money lending?

Private money lending is a collateral-based lending strategy that is often associated with shorter terms and more attractive features. A private money loan offers more flexibility than a conventional mortgage or bank loan.

How does a private money loan work?

Private money lenders provide financing using money from private entities. Private money loans often work as bridges to help investors gather funds to achieve their short term real estate goals, but long term, permanent options may also provide.

Why would I choose a private money lender?

There are many advantages to using a private money lender for your real estate investments! Private money lenders can be more lenient when it comes to borrower credit issues, often there are no prepayment penalties, you can leverage your cash to buy multiple properties, and private money loans are quicker when compared with institutional loans.

Can I get prequalified for a loan?

CALCAP has a responsive loan team who are able to prequalify you. Contact a loan specialist at 833.816.5580 to get started.

How long does the lending process take?

Private money lending can be a quick and painless process. From start to finish, 30 days is common, however, turn around times can be as short as 10 business days.

Can I still be approved for a loan if I have bad credit?

Generally yes, we understand that people have temporary financial issues that come up, and we want to work with you to help you rise up financially to a better place. Offsets to credit concerns may include experience as a real estate investor, good cash reserves, and/or larger down payments.

I am a broker or investor, how can I work with CALCAP?

Business is built on relationships. Ours is no different. CALCAP Value and Preferred Partners receive exclusive rates and services. For more details and to submit your application, visit our partners page.

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