Author: ft Editorial Staff

Real estate prospectors need patience, and deep pockets

California is still attracting prospectors—for housing, that is. Despite the devaluation in California’s real estate and the restrictions on available credit, many brand new investors are stepping in to take advantage of plummeting home prices. It’s a bet these first time investors hope will eventually pay off, but wagering on the rebound of real estate takes nerves of steel and deep pockets. The possibility for profit on properties purchased today will not exist until the credit crisis is untangled and employment recovers, reestablishing conditions for a rise in demand for housing. A UCLA professor quoted in the Reuter’s article on California housing prospectors warns market weakness may persist for “multiple years.” first tuesday take: The first wave of investors (which hit every recessionary market) arrived in California in 2008, bought and are now cooling their heels. They gave a temporary lift in income to agent and REO lenders. The second batch of investors will be the old-timers and will not come around until the market stabilizes with either a sustained bottoming in prices and sales volume, or a consistent rise in sales volume but before prices start to rise in response. By then, the first wave of investors who rolled the dice in 2008 will in small part have figured out how to live with reduced rents; others will have dumped their acquisitions. The speculators who gambled on flipping...

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Southern California home prices are raising affordability–if you have a job

Home prices in Southern California have dropped more than 40% since January 2008, making the “American Dream” more affordable than it was in 2000, reported the L.A. Times. But falling home values also give homeowners who are already underwater with negative equities further incentive to default. first tuesday take: By defaulting on payments, rational homeowners with negative equity mortgage situations exercise the “put option” contracted for in their trust deeds, thereby forcing the lender to buy the property. The lender’s alternative to foreclosure is to voluntarily agree to reduce the loan amount to the fair market value of the property or involuntarily have them crammed down under the hammer of a bankruptcy judge (as is coming). Lenders made a king’s ransom during the boom and now must give part of it back to the homeowners who borrowed. Keep an eye out for prices to bottom and stabilize in 2012, at around 1999 levels. Sales volume will jump around between now and 2012. After 2012, prices will start to work their way back up from 1999 levels. If we get better results, we’ll take them. But please don’t expect them. RE: “Southern California home prices fall, affordability returns to normal” from...

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2009 FHA Loan Limits

These are the FHA Loan Limits, effective January 1, 2009.  The FHA loan limits were temporarily raised from July to December of 2008 in response to the Housing and Economic Recovery Act of 2008, but have since been lowered. County Name Single Family Duplex Tri-plex Four-plex ALAMEDA $625,500 $800,775 $967,950 $1,202,925 OAKLAND-FREMONT-HAYWARD, CA METROPOLITAN DIVISION ALPINE $463,450 $593,300 $717,150 $891,250 NON-METRO AMADOR $332,350 $425,450 $514,300 $639,150 NON-METRO BUTTE $293,250 $375,400 $453,750 $563,950 CHICO, CA (MSA) CALAVERAS $373,750 $478,450 $578,350 $718,750 NON-METRO COLUSA $271,050 $347,000 $419,425 $521,250 NON-METRO CONTRA COSTA $625,500 $800,775 $967,950 $1,202,925 OAKLAND-FREMONT-HAYWARD, CA METROPOLITAN DIVISION DEL NORTE $271,050 $347,000 $419,425 $521,250 CRESCENT CITY, CA (MICRO) EL DORADO $474,950 $608,000 $734,950 $913,350 SACRAMENTO–ARDEN-ARCADE–ROSEVILLE, CA (MSA) FRESNO $281,750 $360,700 $436,000 $541,800 FRESNO, CA (MSA) GLENN $271,050 $347,000 $419,425 $521,250 NON-METRO HUMBOLDT $327,750 $419,550 $507,150 $630,300 EUREKA-ARCATA-FORTUNA, CA (MICRO) IMPERIAL $271,050 $347,000 $419,425 $521,250 EL CENTRO, CA (MSA) INYO $369,150 $472,550 $571,250 $709,900 BISHOP, CA (MICRO) KERN $271,050 $347,000 $419,425 $521,250 BAKERSFIELD, CA (MSA) KINGS $271,050 $347,000 $419,425 $521,250 HANFORD-CORCORAN, CA (MSA) LAKE $271,050 $347,000 $419,425 $521,250 CLEARLAKE, CA (MICRO) LASSEN $271,050 $347,000 $419,425 $521,250 SUSANVILLE, CA (MICRO) LOS ANGELES $625,500 $800,775 $967,950 $1,202,925 LOS ANGELES-LONG BEACH-GLENDALE, CA METROPOLITAN D MADERA $271,050 $347,000 $419,425 $521,250 MADERA, CA (MSA) MARIN $625,500 $800,775 $967,950 $1,202,925 SAN FRANCISCO-SAN MATEO-REDWOOD CITY, CA METROPOLI MARIPOSA $322,000 $412,200 $498,250 $619,250 NON-METRO MENDOCINO $373,750 $478,450 $578,350 $718,750...

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