As we move into 2009, there is a lot of uncertainty in the market, liquidity has not been restored to our financial market, the FHA conforming loan limits nationwide have been reduced, and we have just ushered in a new administration.
The lowering of the FHA conforming loan limits will have a significant impact on properties in our local market, in Sandy Hook primarily in the $510,000 to $730,000 range. In 2008, you could buy a home in Sandy Hook with 3% down up to a loan amount of $708,750 with a FHA loan, which mean that homes selling for up to $730,000 could easily, with good buyer credit and income, be purchased with government backed loans and fund within 30 days.
The new conforming loan limit for FHA in Fairfield County has been reduced to $511,000 as of right now. The new administration is being urged by many involved in the real estate market to reinstitute the higher conforming loan limits. NAR, among others, has lobbyists on the case. Without this, we will see even longer marketing times and more challenging finance conditions for properties selling above the new conforming loan limit.
On the positive side, interest rates remain near historic lows, and while in the last couple of days they have started creeping back up, they had remained near 5% for the last several weeks. In our market, this is an awesome time for first time home buyers and move up buyers.
When you break down the local numbers, it is interesting to see which numbers show the more accurate picture, versus which numbers the media picks up on. Locally the media is reporting a 23% drop in the real estate market. While there is no disputing that the sales volume is down, especially in the 4th quarter, in several segments of our market home values are flat year over year, and in some others values have actually climbed, albeit very slightly.
For more information on Sandy Hook and Fairfield County home prices, see my local blog at:
www.JohnQueenan.net/blog
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