Well, this is a very interesting week to talk about housing--or anything economic. For the second consecutive month, the Case Shiller report has shown housing prices to be going up, albeit at a very gradual pace. More locally, we have seen numbers of sales, as well as prices doing the same thing this past month. So, are we out of the proverbial woods or not? Well, the answer is "Possibly", but it will still be a while before anyone starts shouting from the rooftops. We have seen a few multiple offers, but many of these have been on distressed properties (REO's and shorts). Overall, the Marin market seems to still be a case by case one, but in a positive sense because more people are taking the plunge.
A few items must be noted however. First, the conventional mortgage limit of $724,750 will cease to exist this fall. So, anyone wishing to avoid having to pay presumably higher interest rates normally charged for "Jumbo" loans will have to move sooner. The new ceiling will be $625,500 and will take effect 1 October 2011. If you want a higher dollar amount for your loan at the 'conventional' rates, you must fund not later than 30 September.
Another item discussed more and more every day is, of course, the debate over the national debt limit and related budget issues in Washington. Will the country default or not; and if not, what will be sliced away as part of the deal? This will definitely have an affect on the mortgage market and housing prices, but how much and how remains to be seen. My investment manager today feels it will be an issue in the overall economy, but doesn't see the country falling off a cliff it isn't settled by the 2 August deadline. He does say it will cause rates to rise to some degree, however.
Now, if you're a potential seller, all of the above affects you as well. This is because without buyers able to finance and buy, you will have difficulty selling. My own personal view is that something will be done to avoid default, whether in time for the 2 August date or shortly afterward. I don't believe that an actual default will occur.
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All of the above