While the housing market is going through a period of correction, the news media would have you believe the sky is falling. While great for generating news bites, the fact is, if you follow the timeline of property values over the past few years, you will notice a modest increase in property values somewhere around 6 percent. When the housing market spiked in 2005-2006, it wasn't possible for the market to sustain that type of spike at those prices. Basically people were buying their future equity in the home, and thereby leaving it unable to gain additional equity. The result is a market correction. While I don't mean to over-simplify, I'm not trying to write a dissertation either. So if you followed the timeline from 2000 on, you may find that we are right about where we should be in market values. With declining home prices, some areas have home prices above current conforming loan limits. The Federal Housing Finance Agency (FHFA) announced the the national limit was left unchanged at $417,000 based on declines in monthly and quarterly house price indexes over the past year. The conforming loan limit will remain $417,000 for 2009 for most areas in the U.S. but specified higher limits in certain cities and counties. The conforming loan limit is the maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009. According to provisions of the Housing and Economic Recovery Act of 2008 (HERA), the national loan limit is set based on changes in average home prices over the previous year, but cannot decline from year to year. Loan limits for 2,3 & 4 unit properties will remain at 2008 levels as well for homes in the continental U.S. *two unit properties $533,850 *three unit properties $645,300 and *four unit properties $801,950 Loan limits for “high-cost” areas in 2009 are set equal to 115 percent of local median house prices and cannot exceed 150 percent of the standard limit, which is $625,500 for one-unit homes in the continental U.S. Under rules set forth in the Stimulus Act, loans originated in 2008 and the second half of 2007 are subject to limits of 125 percent of local price medians up to a maximum of $729,750. For loans originated during the period covered by the Stimulus Act, the higher of those limits and the 2009 limits will apply. While FHFA has used median house prices estimated by FHA for 2009 loan limits, it may choose alternative methods in future years. As in previous years, the 2009 maximum conforming limits are higher in Alaska, Hawaii, Guam, and the U.S. Virgin Islands than in the contiguous U.S. In those areas, as delineated in the attached list, loan limits vary from $625,500 to $721,050 for one-unit properties. Link to 2009 High-Cost Area Loan Limits (PDF) Link to 2009 Loan Limits for All Counties (XLS format) If you are considering a move to an affordable location in and around Fort Walton Beach, Florida, I am here to help. 
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