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After all...cheap rates for higher limit loans means we can drag out the market correction...forever....right?
I call Seattle home. I know what this is all about. It's all about people who can't get real and still want lots of cash for overpriced crap. My god, the gravy train has to stop, somewhere.
Both groups have been lobbying President-elect Obama to include in an economic-stimulus package a provision that would again raise the limits on "conforming loans," which are mortgages eligible to be purchased by Fannie Mae and Freddie Mac, two government-sponsored agencies that resell packages of loans to investors.
The threshold figure for what constitutes a conforming loan varies by region.
Last year, the conforming-loan limit was raised from $417,000 to $567,500 for King, Pierce and Snohomish counties. And in the New York City area, it was temporarily increased from $417,000 to $729,750.
The limit was raised to help to bolster demand for higher-priced houses in a slumping real-estate market.
The government made a similar attempt to spur sales in late 2007, when it decided to keep the conforming-loan limit at $417,000, reversing a long-standing practice of moving the limit in accordance with the housing market. (Because the average home price fell in 2007, the limit should have been reduced.)
I think that's what the OP was saying, he was just being sarcastic.
The average median family income here is around $50k-$60k. Therefore the average home should be priced around $150k-$180k. Before the bubble burst it got up to somewhere around $230k, way outside the "norm". I think it now is down to around $180k so I think we are starting to see the bottom in some areas. But the homes that builders were making trying to sell for $400k+ probably won't go for more than $250k in the near future, locality depending.
In Florida, anything over $417K (loan amount) is a jumbo. FHA only goes to $271250 in most counties; $345K in South Florida. With rates in the 7's, that's why those properties are not moving.
As soon as the conforming rates dropped to the 5% level, there has been activity but so many are short sales, bank approval can take up to 90 days. So we wait and wait.
I hate how they move it in accordance with the REAL ESTATE market instead of the WAGE markets and INFLATION RATE. All that does is cause the price to jack up more and for an average home to remain unaffordable at current incomes. Not to mention increase production of bigger McMansions made of cheap ticky-tacky to sell them at the limit.
Real estate prices still have a long way to fall as the economy collapses and there are fewer people with jobs to afford to pay a mortgage. I supect many places will see surplus houses selling for less than than the expected 3X average income.
Homes as they are now are still overpriced by around 20%... even with the very light bust so far... seems people keep trying to hold on to overpriced home values (even the government is trying to support this as well as banks and other corporations)... when we get to a more realistic level, I guarantee you, we will KNOW... until then, I am watching the gov waste money on propping up a "dream"... wondering when they are going to wake up...
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by mayoung
FHA has increased their loan limit on the 203b and 203k in high cost areas to $729,750 for the rest of this year, then it may go back to $625,500 for SFRs. Do your homework as 2, 3, and 4-plexes are much more. 4-plex is over $1.4MM loan amount. Coupled with their loan down payments this is the JUMBO loan you should be using this year. Mike Young
You know, before I saw your post, I thought the more rooms you had in a *-plex, the cheaper it was. That was like way before I did some homework, though. I read your post and the light came on. I was all like "I thought they were cheaper, but man, I was wrong. As you get more rooms, it becomes more expensive. *SLAPS FOREHEAD* WHAT A SHOCKER THAT WAS.
Any more gems for the clueless? If I get married that just means free sex and someone to bring me beer and hotwings for life, right?
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Jumbo loans and rates
