Many Pleasant Surprises...

There are many pleasant surprises in the news in the last day, all which should be good for the local real estate market and for current homeowners...

First, it seems like there is progress in raising conforming loan limits to as high as $729,500 in areas where housing costs are higher.  Huh?  The conforming loan limit is the maximum amount of money that can be lent in a first mortgage.  The current limit is $417,000.  Why is that important for San Francisco buyers or home owners?  If a buyer decides to purchase a condo in the city for $800,000, and they put 20% down ($160k), then to finance the remaining $640,000, the buyer would have to obtain a jumbo loan, and the rates on these are often much higher than the rates offered for conforming loans. 

If Congress passes this legislation, and with the Fed's rate cut earlier this week (mortgage rates also went down, but not by 3/4 of a point!) could save some buyers and homeowners (if they choose to refinance) hundreds of dollars each month.  If you are thinking about refinancing, and need a great mortgage broker, please let me know, and I can refer you to one.

Second, there is an article on the first page of the Chronicle's Business Section, entitled "Bay Area teeters on edge of Recession, Safe now, but U.S. economy may tip us, report says."  The surprise?  It is a balanced view of the economic factors, vs. the normal doom and gloom, sensationalist reporting that generally gets us into recessions, or changes our views.  The subtitle I like better is the one buried on page 5, below the market statistics and sandwiched  next to the blood pressure lowering device.  It says, "Recession unlikely to hit Bay Area economy this year."  It cites strong job growth, international tourism which brings a lot of money into the Bay Area (particularly San Francisco) which will keep our economy strong.

And lastly, there is an interesting article about a new program that will create starter checking and banking accounts.  Eleven percent of California households have no checking accounts, and 47% have no savings accounts.  To cash checks, many of these people pay high fees at check cashing stores or high interest rates to payday lenders.