Friday, March 27, 2009

Housing Statistics...Traditional vs. Foreclosures

The Chicago Association of Realtors recently posted very interesting data comparing traditional sales to forecosed and short sale transactions. It is a mixed bag of information. In the single family home category, traditional transactions were markedly stronger while in the condo and multi-unit categories, foreclosures and short sales seemed to stand out. This trend is not quite as prevelant in the the higher priced areas of the city.

Wednesday, March 4, 2009

Maybe, Just Maybe...

There has been much conversation over home values and when will we hit the bottom. Three years ago, just before the housing bubble began its rapid delfation, income to home value ratios were at a staggering 4.5. Current data shows that median selling prices for new and existing homes combined now equal 2.9 times median household incomes, nationwide. According to historical data, this is exactly the ratio that prevailed during the booming 1980's.

Although nerves over the economy could keep many potential homebuyers on the sidelines, this latest housing data suggest that home prices may actually be stabilizing.

A recent article by chief economist Irwin Kellner of Marketwatch, suggests that home prices are closer to stabilizing than any time in the past nine years. Combining that with attractive interest rates, unlike in the 80's (if you recall), maybe, just maybe, this is a GREAT time to consider a home purchase.

New FHA Loan Limits

It appears something is happening. As of today, March 4th, FHA is increasing its loan limits to hopefully stimulate the housing market...well, we can hope. The new stimulus bill that was signed on Feb 17th - called the American Recovery and Reinvestment Act of 2009 - allows for higher loan limits on FHA transactions. These are temporary loan limits starting March 4th until the end of the year, December 31st, 2009. Transactions must close by the 31st in order to access the higher loan limit, with no exceptions.

Below are the temporary loan limits:

  • 1 unit $417,000

  • 2 units $533,850

  • 3 units $645,300

  • 4 units $801,950

This is great news and will allow access to additional transactions that we would have not been able to do before. Remember the advantages of the FHA program:

  • 3.5% down payment (1-2 Unit)

  • 10% down payment (3-4 units)

  • The down payment can be a 100% gift from a relative

  • No minimum credit score (unlike conventional programs)

  • No reserves required (unlike conventional programs)

  • 2 years from a Bankruptcy discharge date (4 years for conventional)

  • 3 years from a Foreclosure discharge date (4 years for conventional)

  • 85% of rental income is added to borrower's income (75% for conventional)

  • No owner occupied borrowers (Kiddie Condo - parents, etc...)

  • Renovation Loans allowed

Rubloff Wells Fargo, also known as RWF Mortgage, has been successful securing these loans. For more information, contact Brian Cumpton at Tell him Andy Gersten sent you. Remember these new guidelines are only in effect through December 31, 2009.