Condo owners who purchased between 1999-2003 could be one group of big winners with the proposed increase to the conforming loan limit.

• House prices and interest rates are down
• Buyer negotiating power is up
• Higher conforming loan limit
• First-time buyer programs still exist, but applications are down

These factors are creating a window of opportunity for condo owners that want to move into single family homes. This is a rare opportunity in the 680 Corridor – something we may not see again for years to come.

When savvy first-time buyers realize that this is the perfect time for them to buy that first condo, we could see them greasing the wheels for those move-up buyers.

Move up buyers need to keep their focus on the buy-side savings – give a little to get a lot. 

We think markets like San Ramon, Dublin and Concord may benefit more from this scenario than Danville, Pleasanton and Alamo. Walnut Creek sits midway.

I had a great morning at Starbucks today – the one in the MarketPlace Center at the corner of Bollinger Canyon and Alcosta.

Why, because I got to talk to Joel. Joel is an ambitious twenty-something year old that is into financial planning and has all of the drive and energy that he and his peers use to wreak havoc on the rest of us.

Our team is looking for a financial planner, that lives in the area bounded by I-680, the Iron Horse Trail, Montevideo and Pine Valley Drive. So, I asked Joel if he lived in the area. Nope, but he is looking to! Bummer – his sister-in-law is a Realtor out in Livermore and, according to Joel – doesn’t take betrayal lightly.

Well, we spent about fifteen minutes talking about the area, the real estate market, and local condos.

What was really refreshing is that Joel gets it – this is the time for buyers to make there move! I have a strong feeling that he will be pre-approved before the end of the week and that his sister-in-law will owe me at least one glass of wine.

A couple of the team members were going out on a listing presentation. They always ask me (because it evolves) – How is our Internet Marketing different or better than other agents in the area?

Well – We’re #1.

Well, they said – everyone says that.

Well – I mean it!

Most agents post listings to half a dozen websites. If you Google the exact address of the listing, you typically find 4 to 8 returns on the first page of Google search results and it goes down from there.

On the listing we took in December the first three pages of Google returns are related to the our listing and the work we do to get the property Internet exposure. In one respect, this is meaningless because very few buyers search on exact addresses, but the point is it reflects the degree of saturation we are achieving with our marketing.

Okay, but how are we different?

Well, we have an Internet Marketing guy (me) that looks at every listing and tries to think up new & creative ways to promote it and get more and more exposure in as many ways as possible.

Everybody says that.

Yeah, but I mean it. I rattled off the last four books I’ve read this month that relate to marketing and the internet.

• How many agents do you know that are reading this stuff?
• How many agents do you know that are using Spresent, Utterz, Animoto and the other technologies we are integrating into our marketing efforts?
• How many agents do you know that are using press releases the way we are?
• How many agents use blogging to showcase and focus on listings the way we do?

You see, I mean it – we are #1 in the 680 Corridor when it comes to Internet Marketing, but hey – I have it easy because over 80% buyers are using the Internet to find properties, they have the hard job – getting sellers to be realistic about price.

All the marketing in the world can’t sell an over-priced house.

President Bush signed into law today a new measure giving tax breaks to homeowners who have mortgage debt forgiven. Under preexisting law, the debt forgiven by a lender, such as for short sales and refinances, was generally taxable to the borrower as debt discharge income.

With the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence.

This tax break applies to debts discharged from January 1, 2007 to December 31, 2009. Qualified principal residence indebtedness is debt incurred in acquiring, constructing, or substantially improving the residence (up to $2 million).

For purposes of calculating capital gains, any debts discharged excluded from income under the new law must be subtracted from the basis of the taxpayer’s principal residence (but not below zero). However, taxpayers may generally exclude from capital gains income up to $250,000 (or $500,000 for married couples filing jointly) for properties owned and used as their principal residence for at least two of the last five years.

Important Update-  New Conforming Loan Limits Pending – Big Impact on California Housing Expected

Part of our commitment to our clients is to keep them informed of changing conditions and information regarding real estate trends and developments.

Congress could be passing legislation that will actually help you.  And that legislation could come into effect soon.  An article written a couple of days ago suggests that the debate right now is whether a high cost area (California) bump of 150% would be temporary for 1 year, 2 years, or whether it would be permanent.  That seems like they are no longer questioning whether or not to increase the $625,500 conforming limit in California, but for how long.  The final decision will probably not come down until March. 

Who could benefit the most?   Anyone who owes between $417,000 and $625,500, and those looking to purchase properties in California.  What you will see is the housing market heat up, the stock market improve, and home owners with Jumbo Loans (those over the conforming limit) refinancing at lower conforming rates.   This could save you between .500%  to .750% on your interest rate. 

This could definitely cause a log jam for the mortgage industry, especially since a lot of lenders are running lean.  Here’s our suggestion.  BE PREPARED and PLAN AHEAD!!!  Turn times from application to close could be somewhere between 30 and 45 days.

Raising the conforming loan limit up to $729,750 will have the following positive impacts on our local real estate markets:
 

• First Time Home Buyer Programs available with just 5% down to purchase prices up to $768,000.
• Move up buyers can obtain the lowest rates to buy a new home up to $912,000 with only 20% down.
• Using a conforming 1st mortgage and a 2nd mortgage, one can buy a home with as little as 10% down with no mortgage insurance for purchase prices over $1,000,000.
• Homeowners with mortgages today between $417,000 and $729,750 will have access to conforming refinance rates which are currently 0.5% to 1.25% better than corresponding jumbo rates.  This will improve homeowners’ financial positions by creating more disposable income which helps the economy in general.
• Investors will probably seize this opportunity to combine lower rates, lower home prices, and higher rents to buy properties…thus helping to reduce inventory.

Now is the time for move-up buyers to get their homes on the market to take advantage of this significant change of events coming.