Economic Stabilization Bill - Now What?

The immediate impact of the new economic stabilization bill, signed by President George Bush today, will be renewed confidence in the market, two real estate experts said in separate interviews with the editors of REALTOR® Magazine. But don’t expect credit markets to turn around tomorrow. The recovery process will take time, say Kenneth Riggs, head of the commercial real estate analysis firm Real Estate Research Corp. in Chicago and Gary Keller, head of national residential real estate franchisor Keller Williams in Austin, Texas. We asked Keller about the impact of the credit crisis and the stabilization bill on residential real estate, and we asked Riggs for the same analysis from a commercial real estate standpoint.

REALTOR® Magazine: Now that both the House and the Senate have passed the stabilization bill and President Bush is set to sign it, what can we expect the impact to be?

Gary Keller: The market should regain some confidence, and since markets are built mainly on confidence, that’s no small thing. In fact it’s a huge thing and it’s imperative for the market to move forward. But beyond that, we have to wait and see. Although the intent of the legislation is to free up capital for lending on homes, cars, college, and business inventories, the government doesn’t have a mechanism in the bill for making the banks turn around and lend the money back. So no one knows what will actually happen once a bank has its capital freed up.

Kenneth Riggs: Well, it should give calmness to the financial markets by showing that we will in fact work through this crisis. That said, I don’t see the fundamental, or the mechanics, of capital changing right away. That won’t happen until we see how this package will actually operate and how well Treasury can do in buying and then selling the securities. So, the immediate impact would be that the market should at least breathe a sigh of relief. The next step will be to give a foundation for the credit markets to start functioning a little better. We will never get back to the level that we were a year ago; that’s part of the market cleansing itself of a culture in which capital was just too available and too cheap. The bill, too, is raising the FDIC insurance limit for bank deposits to $250,000. Many people will say, “Well, the small person might not have that much.” But it’s really small businesses that are being addressed here, and they’re what run our country. This will allow small companies like a lot of real estate brokerages to start focusing on their business, rather than the credit crunch, and to concentrate on how they can become productive.

Most Secure U.S. Cities

Health, prosperity, safety and security are all desirable aspects when it comes to seeking a place to live, work or raise a family. According to our fourth annual Most Secure U.S. Places to Live rankings from Farmers Insurance Group of Companies®, the city that best meets those qualifications is Corvallis, Ore.

The rankings took into consideration crime statistics, extreme weather, risk of natural disasters, environmental hazards, terrorism threats, air quality, life expectancy and job loss numbers in 379 U.S. municipalities. The study divided the communities into three groups: large metropolitan areas, mid-size cities and small towns.

Corvallis is the fourth different city in four years to earn top honors in the Farmers study. The leading communities in the three previous studies were: the Provo-Orem, Utah, area in 2004; the Richland-Kennewick-Pasco area of southeast Washington in 2005; and St. George, Utah, in 2006.

Top-ranked Corvallis, whose population of 81,105 places it among the small towns, is nestled in the heart of Oregon's Willamette Valley and is home to Oregon State University. In 2006, Corvallis was honored as only the third U.S. city at that time to meet the EPA's challenge to become a Green Power Community. Corvallis' low crime rate and negligible threats of extreme weather, environmental hazards and terrorist threats led to its No. 1 ranking in the 2007 Farmers study.

The San Jose-Sunnyvale-Santa Clara area in northern California's Silicon Valley tops all large metropolitan areas (population of 500,000 or greater), scoring particularly well in the extreme weather and terrorist threats categories. The area is considered one of the leading research and development centers of the world; in 2005, San Jose and Sunnyvale ranked first and second in the number of utility patents filed in the U.S.

Olympia, Wash., is the most secure mid-size city (population between 150,000 and 500,000). The state capital has become a hub for artists and musicians. The extremely clean air and the long life expectancy of Olympia's residents aided its lofty ranking.

Large Metro Areas (500,000 or more residents)

1. San Jose-Sunnyvale-Santa Clara, Calif.

2. Boise City-Nampa, Idaho

3. Bethesda-Gaithersburg-Frederick, Md.

4. San Francisco-San Mateo-Redwood City, Calif.

5. Oxnard-Thousand Oaks-¬Ventura, Calif.

6. Bridgeport-Stamford-Norwalk, Conn.

7. Nassau County-Suffolk County, N.Y.

8. New Haven-Milford, Conn.

9. Lake County, Ill./Kenosha County, Wis.

10. Honolulu, Hawaii

11. Portland-South Portland-Biddeford, Maine

12. Cambridge-Newton-Framingham, Mass.

13. Edison, N.J.

14. Portland-Beaverton, Ore./Vancouver, Wash.

15. Santa Ana-Anaheim, Calif.

16. Madison, Wis.

17. Seattle-Bellevue-Everett, Wash.

18. Rochester, N.Y.

19. Syracuse, N.Y.

20. Essex County, Mass.

Mortgage Applications Surge

Mortgage Applications Surge

Mortgage applications rose 33.4 percent last week on a seasonally adjusted basis, rising to 661.7 from 496.2 the previous week, according to the Mortgage Bankers Association weekly survey of mortgage activity. Total applications reached their highest level since early May.

On an unadjusted basis, the index rose 65.3 percent compared with the previous week, which was shortened by Labor Day. It was down 1.3 percent compared with the same week a year ago.

Refinances fueled the increase. The Refinance Index increased 88.1 percent while the seasonally adjusted Purchase Index increased only 2.4 percent. The refinance share of mortgage activity increased to 51.6 percent of total applications from 36.3 the previous week.

“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term, despite some widening in mortgage spreads,” says Orawin Velz, MBA’s Associate Vice President of Economic Forecasting in a statement. “We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”

Mortgage rates fell for the week:

• 30-year fixed-rate mortgages decreased to 5.82 percent from 6.06 percent.
• 15-year fixed-rate mortgages decreased to 5.54 percent from 5.73 percent.
• 1-year ARMs decreased to 6.95 percent from 7.00 percent.

Why This Autumn is a Great Time to Buy

This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.Here are the reasons why:

Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.

Interest rates are likely to decline as Freddie and Fannie get government help.
The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15.
Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.

San Francisco Condo Sales- UP!

SanFrancisco: New Condos Sell Briskly
High-profile condominium projects are selling steadily in San Francisco.

Sales have risen 18.7 percent from June 2007 to June 2008, according to research firm DataQuick Information Systems.

The median price, however, fell 32.5 percent during that time to $399,000.On average, sales teams are placing about four units per month into contract, meaning buyers have submitted nonrefundable deposits, according to the Mark Co.'s August San Francisco Market Overview.
That’s about the historic average, though only around half the rate during the real estate boom, says Alan Mark, president of the San Francisco real estate marketing and research firm

.At the current rate of sales, 15 of the 35 condo projects now selling in San Francisco would be filled by the end of the year. Five more would be complete by the end of the first quarter, leaving 15 open projects and very little scheduled to come onto the market in 2009.

Getting a Mortgage Tougher for Buyers

Difficulty in landing a mortgage is keeping many buyers out of the market.
At the peak of the housing boom, about 20 percent of the mortgage market was subprime, and nearly 20 percent was "Alt-A loans” or "A-minus" loans, typically offered those with good credit but with high debt-to-loan ratios or little or no proof of income. Both categories are now nearly extinct.
That means about 40 percent of the residential mortgage market has all but disappeared, according to David Olson of Wholesale Access Mortgage Research and Consulting."The underwriting has really tightened up," Olson says, "Before, if you could fog a mirror, you got a loan. Now, that's not the case.
"Nationwide, practitioners say they are encountering more potential buyers who can’t get financing. "Buyers come in with confidence, and once they have talked with a lending practitioner, it's like they've been hit over the head with a ton of bricks," says Dean Moss, an agent at Keller Williams Fox and Associates Realty in Chicago.
A study conducted using data from a Reno, Nev., multiple listing service, found that about 30 percent of sales haven’t closed after 90 days. Practitioner Guy Johnson, who analyzed the data, suggests that buyers stay on top of their loans, checking in with their lender frequently to make sure the loan for which they’ve been approved is still the same.
"A loan commitment letter," he adds, "isn't really as solid as it once was."

Linked In

San Francisco- MOST WALKABLE CITY

San Francisco, New York and Boston are the United States' most walkable cities, according to new rankings from a website that evaluates how easy it is to live in the nation's cities and neighborhoods without a car.

Walkscore.com, which uses an algorithm to identify those neighborhoods boasting the most amenities per person, published its ranking on Thursday and deemed San Francisco the most walkable city, with a "Walk Score" of 86 out of 100.

The ultimate goal is to see the site's scores included in property listings, said Mike Mathieu, founder of the company that created the site's software.
"What we see is someone calling up a broker and saying 'I want three bedrooms, two baths, a walkability score of 85, what've you got?"' Mathieu said.
Type an address, and the site generates a map showing the nearby grocery stores, cafes, movie theaters, schools and parks.

New York received a score of 83, Boston a score of 79.
Scores greater than 70 indicate neighborhoods where it's possible to get by without owning a car, while scores greater than 90 qualify communities as a "Walker's Paradise."
(Reporting by Helen Chernikoff)

Home Buyers Hopeful About Market

An online survey of potential home buyers found that 44 percent believe the real estate market will improve once the new president takes office.

In the meantime, 81 percent say they remain nervous about the current market.

Respondents cite a variety of barriers to buying a home: 28 percent say they are stymied by the cost of a down payment; 20 percent are concerned about their income level, and 31 percent (39 percent in the West) say home prices are still too high.

Practical reasons motivate these potential buyers. A quarter say they need more space; 17 percent have gotten married, had a baby or experienced some other life-stage change, while 9 percent want to downsize.

Seventy-eight percent say they are willing to save or earn extra money for the down payment and are willing to compromise on amenities in their new home to make it more affordable.

Top 10 Cities to Buy a Home

Financially, at least, the best places to buy houses are those where buying costs less than renting, tax incentives are attractive, and there’s an opportunity to build equity.
Forbes magazine surveyed the 40 largest metropolitan area housing metrics looking for cities where home prices have appreciated over the last two years. It also measured vacancy rates. And it gave extra points to cities where rents are significantly higher than a buyer would pay for the same home.
Texas dominated the magazine’s list because of its healthy job market and growing tax revenues.
Here are the 10 cities that topped Forbes’ best-places-to-buy list:

1-Houston
2-Austin, Texas
3-St. Louis
4-Philadelphia
5-San Antonio, Texas
6-Dallas
7-Charlotte, N.C.
8-San Francisco
9-Jacksonville, Fla.
10-Atlanta

Freddie Mac- interest rates

Mortgage Rates Rise, Fall This Week
Freddie Mac reports a slight jump in the 30-year fixed mortgage rate to 6.37 percent during the week ended July 10, from 6.35 percent the prior week.
The five-year adjustable mortgage rate also moved up, climbing to 5.82 percent from 5.78 percent.
However, the 15-year fixed rate fell to 5.91 percent from 5.92 percent; and the one-year ARM was unchanged at 5.17 percent.

Here are some other market predictions from Yun and NAR:

Affordability getting better.
NAR’s housing affordability index has been trending up this year and is projected to rise 15 percentage points to 128.0 for all of 2008. “It appears that more buyers are realizing they can take advantage of a favorable combination of mortgage interest rates, home prices and family income,” says NAR President Richard F. Gaylord. “Overall affordability conditions are the best we’ve seen since the middle of the housing boom in 2004, but with far more choices and much less pressure than buyers experienced four years ago to make an investment in their future.

Recent declines in mortgage rates on conforming jumbo loans and a return to sound but not overly stringent underwriting standards will permit more people to qualify for a loan.”

Mortgage rates to go up. “Although mortgage interest rates will remain historically favorable, they will start to steadily inch up,” Yun said. The 30-year fixed-rate mortgage should rise gradually to 6.3 percent by the end of this year, and then hold at that level for most of 2009.
Demand for homes only rising. Yun said the underlying fundamentals point to a pent-up demand. “Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,” he said. “The housing market has been underperforming by historical standards, partly because buyers were hampered by mortgage availability issues, but that’s improved and an upturn is more likely. On the other hand, it’s unclear what role consumer confidence will play in the coming months.”

EHS to see healthy gains in ’09. Existing-home sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter. For all of this year, existing-home sales are expected to total 5.40 million, and then rise 6.3 percent to 5.74 million in 2009. “Sales gains will be greatest in areas that underwent sharp price declines,” Yun said.

Prices to stabilize in second half of this year. After unprecedented home price declines in the first half of the year, many markets can anticipate stabilizing price trends in the second half. The aggregate median existing-home price is likely to decline 8.4 percent in the first half of this year, and then begin to stabilize in the second half before rising 4.4 percent next year to $213,900. “Policymakers need to be attentive to the fact that many homeowners have seen a reduction in housing equity, or are in an ‘underwater’ situation. More needs to be done on the policy front to alleviate hardships and bring fence-sitters back into the marketplace,” Yun says.

New-home sales slow to recover. New-home sales will probably fall 31.7 percent to 529,000 in 2008 before rising 12.5 percent to 595,000 next year. Housing starts, including multifamily units, are projected to drop 27.2 percent to 987,000 this year, and then slip 0.6 percent to 980,000 in 2009. “Rising construction costs will provide less room for price cuts on new homes,” Yun said. The median new-home price is forecast to decline 3.1 percent to $239,500 in 2008, and then rise 5.4 percent next year to $252,400.

A better economic picture. Yun sees an improving economy. Growth in the U.S. gross domestic product (GDP) should be 1.7 percent in 2008 and 2.0 percent next year. The unemployment rate is estimated to average 5.3 percent this year and 5.6 percent in 2009.

Inflation growing. Inflation, as measured by the Consumer Price Index, is expected to be 3.6 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income should grow 1.4 percent in 2008 and 2.5 percent next year.

New Condo Developments- SF

http://maps.google.com/maps/ms?ie=UTF8&hl=en&om=1&msid=108359953267799344592.00000111e247eec5359d0&msa=0&z=14

SoMa Grand- 1160 Mission

SoMa Grand (1160 Mission) Update: Sales, Office, And Phan’s Food

According to the sales office (which has moved into the building), SoMa Grand is now 50% in contract or closed. That’s up from 40% at the beginning of February and represents roughly 25 net new contracts over the past four months.
Two new model units will be open this weekend. And work on the ground floor Charles Phan concept restaurant is “underway and slated for fall.”

The Infinity

The Infinity

Builder: Tishman Speyer

Location: South of Market - San Francisco, California

Address: Folsom St & Spear St, San Francisco, CA 94105
Type: Condos Stories: 37
Units: 365 -->Bath: 1 to 3Beds: Studio to 3
Unit Size: 539 - 1,755 sq.ft.Price: From the $600,000 Phase: New Construction
Completion Date: Open now!

The Infinity, San Francisco’s landmark of contemporary design, is an extraordinary collection of residences located just off the Embarcadero at the corner of Spear and Folsom Streets in San Francisco’s South of Market (SOMA) neighborhood. These luxury condominium residences feature tower homes with spectacular views of the City and the Bay, as well as homes in the “treetop residences” that enjoy the property’s beautifully landscaped courtyard. The Infinity provides unparalleled living space, first-class service and exceptional amenities, including a 24-hour attended lobby, an inviting landscaped garden, a 5,000 square foot state-of-the-art fitness center with 75-foot lap pool, treatment room, changing rooms and saunas, club lounge with catering kitchen, business center, private screening room, and personal concierge service.

The Montgomery

The Montgomery

Builder: New Urban Properties

Location: Downtown - San Francisco, California

Address: 74 New Montgomery Street, San Francisco 94105
Type: Condos Stories: 8
Units: 107 -->Bath: 1 to 2Beds: Studio to 2
Unit Size: 480 - 1,216 sq.ft.Price: From the $400,000 Phase: Completed
Completion Date: Available now

Bay Area home sales edge up in April

Bay Area home sales edge up in April
May 20, 2008
La Jolla, CA.----Bay Area home sales edged up from a seven-month run of record lows last month, indicating that mortgage availability is improving and that an increasing number of fence sitters have decided they like today's lower prices, a real estate information service reported.
A total of 6,310 new and resale houses and condos sold in the nine- county Bay Area in April. That was up 28.8 percent from 4,898 in March, and down 15.3 percent from 7,447 for April 2007, DataQuick Information Systems reported.
The month-to-month jump was the strongest for any March/April in DataQuick's statistics, which go back to 1988. Starting last September and through March, each calendar month was the slowest on record. Last month was the slowest April since 1995 when 5,636 homes were sold.
"The big issue here is that mortgages are becoming obtainable, which will reduce the pile of stacked up pending escrows. It's unclear if the financing is because of policy changes or because mortgage investors are getting more interested in securities. Probably both," said Marshall Prentice, DataQuick president.
The median price paid for a Bay Area home was $518,000 last month, down 3.4 percent from $536,000 in March, and down 21.4 percent from $659,000 in April last year. Last month's median was 22.1 percent lower than the peak median of $665,000 reached in June and July last year.
Last month's median price would have been closer to $578,000 if the availability of jumbo home loans had remained stable. A year ago jumbo loans, mortgages above $417,000, accounted for 63.4 percent of all Bay Area home loans. Last month they were 28.8 percent, DataQuick reported.

Taking a closer look. Who is buying a home these days?

First-time homebuyers priced out of the market during the frenzied 2001-2005 market are among those most attracted to real estate today. In November 2007, 39 percent of buyers were first-timers, up from 36 percent in 2006, according to NAR. The key impediment to buying? Meeting tighter bank qualifying criteria.

International buyers increasingly are looking at opportunities in the U.S. real estate market. Declines in the value of the dollar against other currencies and lower prices translate into a discount of up to 30 percent for some foreign buyers.

Investors from other states also are seeking bargains in those markets hardest hit by the real estate downturn. Some are even buying properties sight-unseen for conversion to rentals until the market heats up again – a risky proposition, according to some observers.

Top 10 Best Cities for Home Sellers

Four factors are widely seen as affecting whether a housing market is a good one for sellers: job growth, amount of new construction, vacancy rates, and credit availability. Forbes magazine used a variety of resources to determine how the country’s 40 largest metro areas fared according to these measures. The result is this list of top 10 cities for sellers. San Jose, Calif. Because of a tough regulatory environment, new home construction dropped 63 percent last year.San Francisco. When the conforming loan limit recently jumped from $417,000 to the maximum $729,750, that made credit much easier to get for many of the city's homebuyers.Salt Lake City. The 3 percent annual job growth rate, paired with a declining inventory of existing homes and one of the nation’s sharpest declines in construction made this market a good one for sellers.Austin, Texas. Texas is very affordable, plus the city has the nation’s fastest job growth at 4.1 percent.Kansas City, Mo. The number of unsold, vacant houses dropped by 40 percent last year.San Antonio, Texas. Jobs are growing by 3 percent and construction starts have dropped by 42 percent.Denver. The 49 percent drop in construction starts paired with the 2 percent rise in new jobs are good news for sellers.Providence, R.I. Vacancy rates at 1.6 percent combined with a 42 percent cut in inventory help sellers.Charlotte, N.C. Moderate prices and strong job growth bode well for sellers.Seattle, Wash. Strong job growth and a 42 percent decrease in new home construction are good news for sellers.Source: Forbes, Matt Woolsey (04/07/2008)

NAR Economist Among Top Forecasters

THE NATIONAL ASSOCIATION OF REALTORS'® Chief Economist Lawrence Yun has been named among the top 10 economic forecasters by USA Today. Yun is ranked fifth on the list and is responsible for NAR’s real estate statistics and economic forecasting. The annual list recognizes accuracy in forecasting.
“NAR is proud of USA Today’s recognition of Lawrence Yun and his economic forecast accuracy. He is a highly regarded economist, and the housing and real estate industry have come to rely heavily on his economic analyses,” says Dale Stinton, NAR executive vice president and chief executive officer. “This acknowledgement contributes greatly to NAR’s reputation as the leading innovator in housing-related research.”
Yun was named NAR’s chief economist and senior vice president of research in November 2007. He has been with the association since 2000, previously serving as vice president and senior economist. He pioneered the development of the Commercial Leading Index after helping develop the residential Pending Home Sales Index.“I’m honored to be recognized among some of the best economists in the country,” says Yun. “The economy and housing industry are facing many challenging issues at this time, which makes this an interesting and stimulating position.”
USA Today enlisted the help of the Federal Reserve Bank of Atlanta to determine the most accurate forecasters among the economists surveyed in the newspaper’s quarterly survey on the U.S. economy. The economists, whose identities were unknown to those gathering the data, received four scores — one for each quarterly survey — and were ranked on the average of those four scores. FRBA used statistical methods to assess the joint accuracy of the predictions rather than assessing the accuracy of each forecast variable separately, as is commonly done.
Before joining NAR, Yun worked as an economic consultant to the U.S. Department of Veterans Affairs and the U.S. Department of Education. As a research associate at the University of Maryland, Yun developed the graduate economics curriculum for and taught free-market economics in the former Soviet Union as that country transitioned from communism to a free-market system.Yun received his Ph.D. in economics from the University of Maryland in 1995. He received a B.S. degree in mechanical engineering from Purdue University in 1987.

Why now is a Smart Time to Buy

Why Now is a Smart Time to Buy
Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.The Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet. While their advice is solid, it’s not revolutionary, but some potential customers might find it reassuring.

Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.
Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.
Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.
Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.
Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.
Source: The Wall Street Journal, Shelly Banjo (03/11/08)

GREAT NEWS!! As of March 6th

I know you've all been waiting for some relief to our current market conditions, and it arrived today: the new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development. To find out the new limits in your area, simply click on this link: https://entp.hud.gov/idapp/html/hicostlook.cfm, which will take you to the "mortgage limits" page at the HUD web site. On that page, enter your state and county information, chose the type of loan from the "Limit Type" drop-down box (FHA Forward, Fannie/Freddie or HECM). [Note: FHA Forward is what HUD is calling the temporary FHA loan limit.] Then click the "send" button at the bottom of the page. On the results page, you'll see the new loan limit for the type of loan you selected for your area. You can also find a county-by-county listing of the new FHA and Fannie Mae-Freddie Mac loan limits at REALTOR.org by following this link: http://www.realtor.org/GAPublic.nsf/files/chart_hud_loan_limits_08.pdf/$FILE/chart_hud_loan_limits_08.pdf
The new loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750.

Economic Stimulus Bill- This is GREAT News!

Last week, President Bush signed into law a $152 billion economic stimulus bill that includes temporary increases in loan limits for the government sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac — and the Federal Housing Administration until Dec. 31.

The FHA limit will increase to as much as $729,750 in high cost areas (to 125 percent of local median home prices). The GSE limit will jump to $729,750 for loans; currently Fannie Mae and Freddie Mac loans are capped at $417,000.
Eligible loans from FHA include mortgages that were issued for credit approval on or before Dec. 31, 2008. GSE loans that are eligible include loans that originated after July 1, 2007 to Dec. 31, 2008.
The U.S. Department of Housing and Urban Development is required to publish the new mortgage limits by March 14; the limits will be effective for FHA immediately upon publication.

5 Reasons to invest in a home vs. stock

Despite what Wall Street wants you to believe, owning a home isn't the same kind of investment as stocks or bonds. What you get is a USE asset that depreciates over time while it grows in market value. All you have to do is keep the home in good repair to maximize your investment.Here are five reasons why you get more for your money with a house than the stock market:1. Leverage. With stocks, you put in all your money for a little piece of a company. With a house, you put in a little money to get the entire house.2. Tax benefits. Uncle Sam knows that owning a home is a pain in the neck; that's why you get tax incentives. These are basically government bribes to get you to buy. Think about it, with what other investment can you put in 5 percent of the cost of the asset, reap all the appreciation, and pay no capital gains? That's right: live in your home for at least two years, and you don’t have to pay capital gains tax on up to $250,000 in appreciation if you’re single and a combined $500,000 if you’re a married couple.And that's not all — consider the benefits of fixed-rate mortgages, property tax write-offs, interest rate deductions, and depreciation. Is this a great country or what?3. Control. When you buy stocks, you're paying some CEO 500 times the average worker's salary for company performance that most other workers would lose their job over. With a home, you have control — what you buy, how much you pay, and where you live. You can improve the value with repairs and updates. Try comparing that to getting heard at the next shareholders' meeting!4. Lifestyle. Do you want to look at a concrete jungle or your children playing in your own back yard? With a home, you're purchasing a vantage point for yourself and your family. The neighborhood you want to be in, and the size and style of a home that fits your needs.5. Value. Unlike some stocks, your house will seldom become worthless. Barring a catastrophe, your home will retain a major portion of its value, even in the worst of times. So don't freak out about slight fluctuations in the value of your home in any given year. You'll make it up. Housing has lost value only one year out of the last 35. It's more normal to beat inflation by 1 percent to 2 percent.Take Stock in ThisSo let's add a little perspective here. You lost a greater percentage on the stock market this past year than if you owned a house. You lost more on your SUV. And you sure lost more on your iPhone.And keep this in mind: When it rains, which would you rather have over your head — a roof or a stock certificate?(c) Copyright 2008 Realty Times. Reprinted with permission.

Recession?

What Recession?
The year of 2007 has come to a close, and once again we have seen that many parts of the San Francisco Bay Area were immune to the nation's housing crisis. In fact, San Francisco, the Western East Bay and Southern Marin County broke records for the highest sale prices in history! Just goes to show that you should take all that news in the media with a grain of salt.