The article below seems to imply that the banks and others are more than ready to jump in. The author asks, "Will this lead U.S. to another housing bubble?"
And Christopher Westfall at The Street writes, "But some of the largest investment firms on Wall Street are betting on a profitable, private jumbo loan market and have set up vehicles to fund them."
But private investors may want larger returns soooo........
Prudential Real Estate of the Rockies
Excellent, excellent comments.
What I see and hear in Longmont's 80504 is prices above half million have been hit hard. My theory is first there was not a lot of loan availability and now we're hearing costs are going up for money. We know that will exclude some buyers, so ultimately the pool of buyers ends up smaller.
Jumbo loans may be more attractive to investors because of the higher rate. And you're right Ron, that might translate to too many investors taking on too much risk. Then again, we might be seeing bubbles everywhere. I'm glad there are people like Gregorio who give the subject scrutiny and can put it into perspective. And note, California's home prices are much higher. There should be availability from GSEs for those markets. The same case might be made for the city of Boulder, which has much higher prices than surrounding areas.
The buyers can hope that competition to serve that part of the market is extreme so they don't end up paying a lot more than they might have otherwise. With few attractive investments, I might have to take a look.
Is this a case where the government has decided to back the slow horse? Are the GSE's overexposed?
I think what it means is these higher priced homes in 80504 may move slower. I hope I'm wrong because I'm hearing tell that prices are getting hit hard, very hard.
My friends who live in Starwood love their homes and they have been distressed. If things begin turning up, that's something I like to report. I'll keep an eye on this. Thanks for your observations, guys.
PML of Longmont, CO