NEWPORT BEACH, CA—Difficulty in obtaining first-home mortgages is helping one segment of the housing industry: the luxury, or “move-up” market. Mark Buckland, CEO of City Ventures, tells GlobeSt.com that with so many first-time buyers having trouble getting loans, those who already had a mortgage and are moving up to higher-end properties have the advantage.
As GlobeSt.com reported last week, the locally based homebuilder has launched a luxury boutique development and homebuilding division that will focus on premier land locations in California. Insignia is dedicated to creating “profoundly personal residences” focusing on superior architecture, amenities and interior design, according to the firm.
Now, Buckland says we can expect to see more homebuilders in the California market creating luxury boutique divisions based on the improved economy and the market for such properties here. “The California economy is definitely picking up, and people are feeling more positive about eh move-up market as it spreads to different areas. The move-up buyer has had an easier time getting a loan even during the downturn. There’s demand at the high end because they can get the financing, and it’s a good time for buyers to lock in low-cost financing.”
Buckland adds that he wishes his firm could do something for first-time buyers, “but I think we’re seeing interest rates move up a little bit, and the refinance market is curtailing off, so we’re seeing some movement in the banks, which are providing loans that are easier to qualify for. We’re nowhere near back to where we were, but they’re not being quite as restrictive. They’re looking at underwriting in the new-home market and they’ve made some adjustments. There’s a little change, not much, but that might change going forward.”
Buckland says the first-time mortgage issue is a national problem—not just a California one. Meanwhile, there’s a “nice pool of buyers that can afford to move up.”