|
How's The Market?
At a recent reunion of colleagues and friends from a previous company I worked for, I was approached by an old friend who knew I was a Realtor with the question: "How's the market?".
I am sure as you read this you are nodding your head as you have perhaps asked this question of a Realtor, and those in the business reading this are nodding your head as we have been asked this many times over the course of our professional careers in the real estate industry. This provided me food for thought for this article.
When I am asked "How's the market?" I think which market? Are they an investor looking to flip and sell or rent? Is it a seller with a higher end home? Is it a first time home-buyer with limited cash for a down-payment? A military family relocating to Colorado Springs? A family with a sudden hardship behind in mortgage payments trying to avoid foreclosure? Although these are just a few examples of types of buyers and sellers, I wanted to stress the point that the housing market whether buying or selling, is unique and localized, with multi-faceted connections to the overall economy, mortgage industry, and government programs and legislation. To provide information about 'the market' in general terms may not be doing our profession justice in assisting the public with valuable real estate information. My goal is to provide valuable information at the local and national level and how it may impact your unique market, along with content about need-to know real estate processes that directly effect buyers and sellers in various types of residential real estate transactions.
The end of September is upon us and so is the end of the U.S. Government fiscal year. Not withstanding another housing-related stimulus package coming down the government pipeline any day now, I wanted to take the opportunity to provide some current national information that may affect various types of buyers and sellers within El Paso County starting October 1, 2011. National changes and trends even though there may be no technical link to those of us living in Colorado Springs, we are still affected by the big picture.
On a national level in 2008 the FHA conforming loan limit (maximum loan amount obtained through Fannie Mae/Freddie Mac) was increased in some parts of the country i.e. Pitkin County CO, Northern CA, FL, NY, NJ that deemed in need of the change to spur the housing market in these high cost areas. Beginning October 1, 2011 those loan limits may decrease causing some buyers to take out a jumbo non-conforming loan instead which normally requires a higher down payment and has a higher interest rate. Nationally, if higher end homes don't sell and inventory does not decrease the trickle effect may be seen on those less expensive homes through continued lower sales prices and values.
On a local level, FHA single-family borrowing limits (one-family housing) in El Paso County is set to decrease to $271,050 from $325,000 starting October 1, 2011 and effective for now through December 31, 2011. If Congress doesn't intervene before then and make changes, El Paso County housing market may be affected by those buyers who normally look to FHA to help but now must either change their home search criteria, or come up with a bigger down payment. Sellers may see less qualified buyers after September 30th with the changes.
Good news for eligible military! The VA Funding Fee (percentage of the purchase price required by law) as part of the VA Home Loan Program and Restoring GI Bill Fairness Act is being decreased beginning October 1, 2011. The new VA funding fees for first time users are going down from 2.15 % to 1.40 %, and subsequent users are going down to 2.80 % from 3.30%. For eligible Reserves/National Guard first time users the fee is going down from 2.40% to 1.65%. These changes are for VA loans funded after September 30, 2011. This is a great opportunity for our eligible military in Colorado Springs and for those looking to relocate in the future.
Link to Article - Page 5 | 
