The deal that the house passed would allow Fannie Mae and Freddie Mac to increase the limit on the mortgages they could buy from the present $417,000 to $625,000.
This would allow the Fannies and Freddie to buy larger mortgages from lenders. Resulting in putting that money back in the hands of banks. This financial stimulus should help increase the capital ratios and generally put lenders on a stronger footing.
Who Does It Benefit
1. Lenders who need the capital. This is in everyones interest, since we do want that neighborhood bank to be there when we need it.
2. New home buyers because the lenders would be able to resell larger loans and have money to loan out again…perhaps to you
3. The owners of these jumbo loans would see a lower interest rate. NAR thinks as much as $3000-$5000 a year.
4. Real Estate agents because lenders might be a little more willing to lend and the savings might keep some people in their homes and supply off the marketplace.
5. Most especially areas that have large numbers of jumbo loans. eg; New York California parts of Florida have an outsized number of these loans.
According to Freddie Mac the sub prime delinquency rate is 10x higher than the owners of prime conventional loans. The sub prime end of the market needs help fast….lets not forget them.
* This is the version that passed the House and is now on the Senate
Thanks for Reading
Howard Bell
www.yourpropertypath.com
Popularity: 28% [?]
Demand Versus Buyer Hesitation
by Lawrence Yun, NAR Chief Economist for National Association of Realtors
The stats quoted in this article point to a rippling effect that weak housing is having on the job market. He notes:
1. Residential construction and related contractor jobs fell by 28,500 during the month and are now lower by 291,000 from their peak employment level nearly two years ago. The commercial real estate market appears to be topping out as 16,800 jobs were cut in December.
2. Existing-home sales have been right at or near 5 million for the past three months and are down 20% from a year ago and down 30% from the peak year of 2005. The current level of activity is far below that of even the pre-boom year of 2001.
The most interesting point to this article is not the downtrend we are too well aware of but his absolute enthusiasm about 2008 as a turn around year. He goes on to say “Though pent-up demand clearly exists, it is still tricky to anticipate when a meaningful recovery will take place. Will it be spring or summer or fall when we will see a notable pick-up in home sales? Difficult to say, but it will happen in 2008.”
Some of this is paraphrased to isolate the point, still I wish it were true….My. Yun is certainly privy to more data than I, but I have noticed they were fairly optimistic all the way down.
How does he account for $450 billion in ARM’s coming due in the next three years. These are supposed to increase monthly costs to homeowners by 30-50%, just as their equity is vaporizing. I think we will see a lot more supply and lower prices before that pent up demand actually gets off its dime and buys.
Thanks for Reading
Howard Bell
www.yourpropertypath.com
Popularity: 29% [?]
The last year or so I have started getting calls and e-mails about short sales and how they are driving many people involved in them crazy. Buyers who are seeking a great short-sale price often report being seriously frustrated….
This real estate article was posted from Home Front real estate blog
Popularity: 38% [?]
People - GeeeeeeZ! Taking a side on the bubble discussion is like actively discussing abortion, the war in Iraq, or the Dixie Chicks! Neither side is open to others opinions and no one is going to budge. I for one am sticking to my guns (just like like everyone else) and unless anyone is going to give me their doctorate in economics with a proven track record of predicting the future let’s not go there for a while. If I end up wrong I will be the first to admit it - somehow I get the feeling that most of you will be on whatever side is right - right then. Let’s get a new subject going here. I want to talk about our areas most valuable asset - Lake Tahoe and the environment in general as it relates to Real Estate.
I for one am huge proponent of “Green Building” and am very happy with the trend for many custom homes to be built with not only energy and water efficiency in mind but the use of recycled lumber, carpets, and insulation — as well as products with low Volatile Organic Compounds (VOCs) to protect indoor air quality. It is sad that many had to wait until oil prices climbed before they started thinking that there has to be a better way — but — regardless of the reason any small step to independence is a move in the right direction. I would like to commend the Tahoe Sierra MLS (TSMLS) for recognizing this trend that , in my opinion, in the future will become increasingly important in a home buyers search criteria. The TSMLS has incorporated into their search criteria for Realtors factors such as special insulation, recycled carpets, energy efficient appliances, and other “green” features. People are not only focusing on this because they want to be free of gas companies that “surprisingly” triple their profits even though gas prices were driven up! Gee I wonder why? But people are also more conscientious of the environment then they have been in a decades.
Off my soap box and back to Tahoe. It is my opinion that the most comprehensive asset that our area has is Lake Tahoe - a unique gem and is undoubtedly one of the most beautiful areas in the States. It also has the great ability to stabilize our market as it is not something that you can reproduce and being near it and a part of it will always be desirable as long as we protect it. As a quick example while the Reno/Sparks market did drop over 10% (in some cases) in 2006 in Incline Single Family Homes appreciated by a modest +/- 8% and Condos appreciated about 11%. Sales volume was down but prices were up. What would have happened to our market in the absence of the Lake? or Would we even have been in the position for a decline without it? How many speculators would have gone elsewhere without the Lake (and river of course) despite our great tax climate and college? These are questions that may never be answered but are fun to think about anyway.
My question to you is - how important will “green” features be in the purchase of your next home? and Why? Let me know and thank you in advance for your response.
Popularity: 41% [?]
Location - Local Community, Town or City
Before you can actually pick out a house, you need to choose what cities or communities you would like to live in. Carefully choosing your community is the first step in “location, location, location” and can help maximize your future potential resale value. Avoiding neighborhoods with historically low appreciation is wise. And, within a neighborhood, look for homes with extra amenities such as bordering open space, views, extra large lot, etc. Avoid homes that are over improved as compared to other homes around it. For example, a 3,000 square foot home in a neighborhood of 1,500 square foot homes will not bring the same resale value as a 3,000 square foot home in a neighborhood of 3,000 square foot homes. Full Article »
Popularity: 69% [?]
