I was looking at an industry mortgage rate chart for the past 30 years and it's always refreshing to talk to professionals who worked in the industry back in the late 70s & early 80s when interest rates peaked around 18 - 21%.  They will wax about how the only deals that were getting done were those were seller financing was involved & almost expected.  When rates finally did reach around 10% many couldn't believe it and this was a catalyst for getting buyers off the fence.  It may be useful for us to remind our buyers that today's rates really are at historical lows.  My sense is that were are going to start to see the rates climb, even though many will claim and I would agree that we're not calling this a recession, but it let's spin it and call it a stand still in the economy at best.  We'll look back 6 months from now and smile when our clients go, "I should have . . . " & guess what?!?  I told you so!  Again, where someone is waiting for prices to go, they will loose in higher monthly payments.  Something has to be the catalyst and motivator.  If it's to be it's up to me to get this market moving & you too! 

So, the much anticipated new limits have finally been released.  We sigh a sign of relief on the Peninsula in the over-priced Eden that is Monterey; having wonderied if in the current market our county ties to South County Values would mean an all for not in a trailing appraisal market.  Maybe still a all for not.  So, we get the maximum loan limit.  Ahhh, relief!  Good times are here again.  It's where we had hoped.  This should give the economy in California a much needed kick in the you know what and allow me to make my very own mortgage payment.  However I start to wonder . . . Fannie Mae = tighter underwriting criteria, or am I just so used to stated income scenerios?  Supply & Demand.  The Fed anticipates another cut, does it impact mortgage rates in anticipation of this change?  Fast forward 1, 2, months from now after this is in play and someone jumps on the band wagon.  Conforming loan limit rates start to creep up towards today's current Jumbo rates.  Only a select number of products available.  Pretty soon conforming loan product interest rates are actually less attractive then non-conforming jumbo products and all we've done is stalled the economy as buyers and owners wanting to purchase and refi. waited for the blessed event.  I don't believe this will be the case, I only wonder upon it as a possibility.  And then, it's not only a tease, but a limited tease good for a few months.  So let's say you opt for the 5/1 ARM and they roll back the limit in 6 months - 1 year.  What do you refinance into then?  But, in order to qualify, you actually have to qualify . . . California Dreaming.  Artichokes, grapes, ocean views, hotel rooms . . . The Peninsula is actually an island . . . a beautiful resort, but where's the blue collar beef?

There's a great article that just came out in the Feb. 25th edition of Time in conjunction with CNN.  It's something to send to your buyer clients who may have been or continue to be on the sidelines interms of moving forward with purchasing a home.  Essentially it outlines that any price reduction = equity, that one might gain by waiting might be offset by rising financing costs and they give a nice example to illustrate this.  

It's up to us to get this market moving!  We only have the market we're in at any given time and I would encourage you to think of today's market as being a "mindset."  You are your stiffest competition.

If anyone would like a copy of the article, please don't hesitate to ask and I'll gladly email it to you for use with your clients.

Happy House Sales!

Frank