Infinity Rea…, Real Estate Pro in Saratoga, CA

Question for consumers. What is your Current Temperature on buying or selling a home.?

Asked by Infinity Realty Network, Saratoga, CA Thu Feb 7, 2008

Just curious as there have been many changes taking place in the market as of late, and i am sensing a more positive attitude from consumers lately. As a buyer is your temperature still cold, getting warm or hotter. With "House Passes GSE and FHA Loan Limit Increases, Senate to Consider This Week" this going on, summer coming up and Rates still dropping is your outlook more positive. Also as a Seller do you feel more confident your home will be selling soon? Agents chime in as well

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"If you are liquid I don't see how you can go wrong."

I can see how you can go wrong. You could buy a house and watch your equity evaporate as prices fall further.
1 vote Thank Flag Link Tue Feb 12, 2008
I just closed on a home this past Monday. As Robert Kiyosaki is saying now that there is a sale going on in the real estate market. I love a good sale. Rates are awesome right now as well. If you are liquid I don't see how you can go wrong.
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0 votes Thank Flag Link Tue Feb 12, 2008
Thanks for the answer Mike, great points. Im glad to hear you are still watching the market. me i have a different take on some of the things you have said, and time can only tell. These coming months will be an indicator atleast in our area, of what the future holds. Here is some information i received just this morning, and with these new conforming loan limits that were once jumbo loan limits i think can start a positive reaction.

"As I'm sure you've all heard the congress finished off the economic stimulus package yesterday and sent it to the President with the $729,750 number intact. President Bush has already come out and said he is pleased with the bill and will sign it into law sometime next week.

Here is the section of the bill relating to the conforming limit increase:

One thing that hadn't been clear to me was how they were going to break this down geographically. They said based everything off of "area" median home prices. In reading the final bill it says:

"125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size."

So, the median area home price for the Bay Area last year from one article I saw was $810k. That number seems high, but say it was $600k. 125% of that is still $750k. 175% of the limitation for 2008 (417k) is where they get the $729,750. So, most everything in the Bay Area is going to be capped at $729,750.

So, how are they determining what "area" means? Is it county? city? zip? Here is what the bill says:

"shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 202 of this title."

Sec 202 still doesn't really define "area" but currently HUD appears to use MSAs and County for determining area in regards to the previous FHA lending limits. I'm sure more info will come out shortly to clarify this. Or if you have a better understanding of this let me know.

So, when does this go into effect?

It can go into effect as soon as the President signs the bill, but Fannie/Freddie may wait for HUD to publish the median house prices. According to the bill they are to publish this "as soon as practicable" but no later than 30 days from enactment. I'm sure they have this info handy so I can't imagine waiting 30 days to get this going. We'll likely get some guidance from the GSE's shortly.

Section 202 says:

(c) Publication of Area Median Prices and Loan Limits- The Secretary of Housing and Urban Development shall publish the median house prices and mortgage principal obligation limits, as revised pursuant to this section, for all areas as soon as practicable, but in no case more than 30 days after the date of the enactment of this Act. With respect to existing areas for which the Secretary has not established area median prices before such date of enactment, the Secretary may rely on existing commercial data in determining area median prices and calculating such revised principal obligation limits."
0 votes Thank Flag Link Fri Feb 8, 2008
My wife and I have been looking in the SF East Bay since last July. We're looking around Berkeley and the nicer parts of Oakland, El Cerrito, Kensington, etc. Price in the $500-800k range.

We were all set to buy (downpayment save up, financing approved) when the mortgage crisis blew up. All of a sudden our loan got a lot more expensive, and we figured prices were about to drop, so we decided to hold off buying unless we could get a great deal on the perfect house (which didn't happen). But we're still watching the market.

My sense of it is that prices in this particular market niche have dropped maybe 5%-10% or so, but they have a long ways to go yet. Resets of Pay Option ARMs still haven't started hitting the market yet -- and I'm guessing that this particular market is rife with them.

Also, sellers still have not capitulated fully. I'm still seeing houses on the market for months, with modest price reductions that are still not bringing them to sale. I can just tell that a lot of sellers haven't been backed up against the wall yet, but that will happen sooner or later (especially as more mortgages reset).

Rates are low, yes, but the spread between the 10-yr T-Bill and the 30-yr fixed mortgage rates has increased substantially over the same period. So loans aren't as cheap as they should be, and lenders have greatly tightened their standards. Around here you need a jumbo loan unless you're loaded with cash, and those are still mighty expensive.

Bottom line: I think prices have a long ways to fall yet, so we're not going to buy anytime soon unless we happen to luck into the perfect house at a great price (not likely).
0 votes Thank Flag Link Fri Feb 8, 2008
My wife and I have been looking in the SF East Bay since last July. We're looking around Berkeley and the nicer parts of Oakland, El Cerrito, Kensington, etc. Price in the $500-800k range.

We were all set to buy (downpayment save up, financing approved) when the mortgage crisis blew up. All of a sudden our loan got a lot more expensive, and we figured prices were about to drop, so we decided to hold off buying unless we could get a great deal on the perfect house (which didn't happen). But we're still watching the market.

My sense of it is that prices in this particular market niche have dropped maybe 5%-10% or so, but they have a long ways to go yet. Resets of Pay Option ARMs still haven't started hitting the market yet -- and I'm guessing that this particular market is rife with them.

Also, sellers still have not capitulated fully. I'm still seeing houses on the market for months, with modest price reductions that are still not bringing them to sale. I can just tell that a lot of sellers haven't been backed up against the wall yet, but that will happen sooner or later (especially as more mortgages reset).

Rates are low, yes, but the spread between the 10-yr T-Bill and the 30-yr fixed mortgage rates has increased substantially over the same period. So loans aren't as cheap as they should be, and lenders have greatly tightened their standards. Around here you need a jumbo loan unless you're loaded with cash, and those are still mighty expensive.

Bottom line: I think prices have a long ways to fall yet, so we're not going to buy anytime soon unless we happen to luck into the perfect house at a great price (not likely).
0 votes Thank Flag Link Fri Feb 8, 2008
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