Congress passed the economic stimulus package which temporarily raises the conforming loan limit to $729,750 from $417,000. This should loosen up credit and give a boost to the real estate market, especially in high-priced areas like the East Bay Area.

DQNews reported that Bay Area home sales ended 2007 at a more-than 20 year low (units sold). This includes most East Bay communities like Danville, San Ramon and Alamo.

"Things aren't strong by any means," said Mark Vitner, economist with Wachovia Securities in Charlotte. "It's possible that we will see some improvement in the housing sector and we think that the first quarter will mark the bottom in home sales."

Mortgage rates remain favorable, and refinancing activity is solid. With underlying short-term interest rates on the downtrend, the ARM rate reset problem is lessened. Rate freeze and loan modification proposals for some subprime borrowers should be making headway, and an economic stimulus package is in the works. Lower short-term interest rates should spark some additional growth not far down the road. When housing finally comes to a stabilization point, hopefully in the near future, the stage may be set for a pretty good economic rebound.

Danville - San Ramon - Alamo - Dublin - Pleasanton - Walnut Creek 

Savvy sellers should have their homes priced right and on the market by March 21. Talk to your agent or lender about the change in conforming rates and how that can help your situation. Creative financing is returning to the industry.

Motivated buyers should check with their agent or lender to ascertain how the recent changes may improve their bargaining power.

A significant change that has occurred over the last 15 years in the real estate industry is that the down payment is now of less importance than the monthly payment. This reflects an ongoing trend in our society. Given this, what we are seeing more and more is buying down the rate rather than reducing the price. Talk to your Realtor or mortgage broker about this.