Back in the beginning of the year, the conforming loan limit was temporarily increased from $417,000 to $729,500.
We all knew that the fun just couldn’t last, and in September, the powers that be announced that the conforming limit would be permanently set to $625,500. Now, it’s a BIG improvement from the previous permanent conforming loan amount of $417,000, but it’s over $100K less than the current level.
Now – this decrease from current levels was supposed to take place in January, but lenders are ready to throw in the towel NOW!
If you’re looking at a loan between $625,500 and $729,500, get off your duff and buy something.
All of these loans need to fund and close the before December 1st. Lenders are starting to cut off this program since the temporary loan limit increase that was instituted as part of the economic stimulus package earlier this year ends on December 31st. Lenders are wanting to get these off their portfolio before January 1st.
To make a long story short, if you’re in this “in between” category for loans, your purchase power will decrease by December 1st. Now – I kid when I say “go out and buy something now,” but if there’s a property you’ve got your eye on, you might just want to strike while the iron’s hot.
And if you have questions about all of this, holler. You know I love to talk real estate.
You do know, right, that S.F. home prices, especially in the Sunset, have approximately 35% more to fall before they are at the level where they would’ve been had the “creative” loans and outrageously low cost of credit been nonexistent these last nine years.
I looked at an open house a couple of weeks ago at 31st/Noriega. House was 800 square feet with three small bedrooms and only one bathroom. Tiny kitchen and tiny living room/dining room. Priced at $699K. Why are Realtors and sellers still so unrealistic? They’re doing buyers and sellers a disservice. The median San Francisco income for 2007 was $66,000, so this house was priced more than 10 times that, way out of whack with what has historically been the average home-price-to-income-ratio for this neighborhood: 5.9. This house should be priced at $349K — and even that would be overbidding.