DeKalb’s real estate market has stalled but is expected to grow by 2008.

Even after the subprime mortgage financial crisis, the DeKalb real estate market has not fallen.

The subprime mortgage financial crisis refers to the time period after the housing market boom, or housing bubble, from 2001 to 2005.

“We are at a stalemate right now in the market,” said Harry Leffler, realtor for McCabe Realtors, 120 W. Hillcrest Drive. “Since 2006, the values of houses are not dropping, but they are not increasing,” Leffler said.

This is in sharp contrast to the pre-housing financial crisis days, when the value of a home could increase by eight to 10 percent each year.

Due to concerns of the stock market in the past five years, investors chose to invest in real estate, utilizing government-lowered interest rates.

“Risky, high-interest loans became common industry practice,” said Bertha Williams, mortgage adviser for Resource Bank. “In example, subprime loans are high-interest loans for individuals with potentially bad credit. The interest rates are higher to offset the risk the lender takes in giving a loan to a borrower with questionable credit history.”

In 2006, many new homeowners defaulted on their loan payments as the interest rates grew, and thus foreclosed on their house.

When houses are foreclosed on, the value of the surrounding property decreases as well, which creates a compounding problem.

“In DeKalb, we never had the great boom experienced in high growth and metropolitan areas,” Leffler said. “So, we also didn’t experience a big fallout after the housing bubble popped.”

Money lenders and realtors, however, will deem this period as a “time of adjustment,” or an “atmosphere of fear.”

“The fear of buying a house these days is not very warranted,” Leffler said. “The $250,000 housing market is still strong. However, the $350,000 housing market has more inventory than buyers right now.”

Lending companies are also less likely to offer high-risk loans as they did in the past five years.

“The industry trend is to go back to the traditional loan system,” Williams said. “Borrowers usually pay five percent of the cost up front now as opposed to putting nothing down at the beginning. Getting a loan is not as easy as it was five years ago.”

Since the crisis began, DeKalb real estate values have not gone down.

“I don’t think we’re ever going back to the values of houses before the boom; we expect to grow again by 2008,” Leffler said.