The largest news in real estate is the economic stimulus package that has temporarily raised the FHA loan limits in San Diego to $697,500.
The stimulus package is designed to encourage buyers to purchase by making FHA guaranteed loans available at higher loan limits. An FHA loan is a mortgage loan insured by the Federal Housing Administration.
Because the loan is insured, FHA mortgages offer several benefits to the borrower that a traditional mortgage cannot match. For example, an FHA loan has a low 3 percent down payment requirement, and that money can come as a gift from a family member, employer or charitable organization.
In today's market, a traditional mortgage often requires a 5 to 10 percent down payment from money that has seasoned in a personal account. FHA loan programs also are available to borrowers with less than perfect credit scores, which is a welcome relief to the stricter standards of today's lending market.
The changes are intended to help homeowners in adjustable-rate mortgages refinance their debt to a fixed rate and allow them to continue making their home payments. This ultimately will keep prices more stable by reducing the number of foreclosures, which tend to lower prices and flood the market with extra inventory.
Carlsbad directly benefits from the increased loan limits. The least expensive house in Carlsbad is around $500,000. Before the changes, a buyer in today's market would have to put $80,000 down to get a conforming loan rate on $500,000.
With the current changes, homebuyers could have as little as $15,000 with the proper qualifications. With the new limits only in effect until the end of the year, the market expects buyers to consider this a great opportunity to purchase a home. The current rate is around 5.95 percent for a 30-year fixed rate.
Carlsbad's home market
As of March 11, there were 460 detached homes listed for sale on the Multiple Listing Service and about 55 homes selling per month in January and February. This means it would take about eight months to sell the available homes. Similarly, in the Carlsbad condominium market there were 244 attached homes for sale with 30 attached homes selling per month; leaving around eight months of supply. In the past, six to eight months of inventory has shown to keep the time to sell a home between 60 to 80 days, as well as keeping prices relatively stable. If an individual home has little competition and has desirable features, it may sell in less time and for close to the asking price. Homeowners should strongly consider preparing their home for sale on the market. In today's competitive market, a home that is updated with desirable features, like a remodeled kitchen, updated flooring and a designer backyard, can expect to grab the attention of more buyers and sell faster. Sellers also can expect that even if their home is gorgeous and priced below recently sold comparable homes, offers may still come in below the asking price.
Positive news for buyers, sellers
Mortgage rates are expected to stay near their current levels of low 6 percent. The economic stimulus package, which includes increases in FHA and conforming loan limits, should allow more buyers to purchase real estate over the next year. With more buyers competing for homes, the final sales price tends to be much closer to the asking price, creating stability of local home values. Many Carlsbad communities and surrounding cities also have seen large discounts in the asking price from the high home sales of 2005. Homebuyers should consider this an excellent opportunity to purchase, if their dream home is for sale.
The stimulus package is designed to encourage buyers to purchase by making FHA guaranteed loans available at higher loan limits. An FHA loan is a mortgage loan insured by the Federal Housing Administration.
Because the loan is insured, FHA mortgages offer several benefits to the borrower that a traditional mortgage cannot match. For example, an FHA loan has a low 3 percent down payment requirement, and that money can come as a gift from a family member, employer or charitable organization.
In today's market, a traditional mortgage often requires a 5 to 10 percent down payment from money that has seasoned in a personal account. FHA loan programs also are available to borrowers with less than perfect credit scores, which is a welcome relief to the stricter standards of today's lending market.
The changes are intended to help homeowners in adjustable-rate mortgages refinance their debt to a fixed rate and allow them to continue making their home payments. This ultimately will keep prices more stable by reducing the number of foreclosures, which tend to lower prices and flood the market with extra inventory.
Carlsbad directly benefits from the increased loan limits. The least expensive house in Carlsbad is around $500,000. Before the changes, a buyer in today's market would have to put $80,000 down to get a conforming loan rate on $500,000.
With the current changes, homebuyers could have as little as $15,000 with the proper qualifications. With the new limits only in effect until the end of the year, the market expects buyers to consider this a great opportunity to purchase a home. The current rate is around 5.95 percent for a 30-year fixed rate.
Carlsbad's home market
As of March 11, there were 460 detached homes listed for sale on the Multiple Listing Service and about 55 homes selling per month in January and February. This means it would take about eight months to sell the available homes. Similarly, in the Carlsbad condominium market there were 244 attached homes for sale with 30 attached homes selling per month; leaving around eight months of supply. In the past, six to eight months of inventory has shown to keep the time to sell a home between 60 to 80 days, as well as keeping prices relatively stable. If an individual home has little competition and has desirable features, it may sell in less time and for close to the asking price. Homeowners should strongly consider preparing their home for sale on the market. In today's competitive market, a home that is updated with desirable features, like a remodeled kitchen, updated flooring and a designer backyard, can expect to grab the attention of more buyers and sell faster. Sellers also can expect that even if their home is gorgeous and priced below recently sold comparable homes, offers may still come in below the asking price.
Positive news for buyers, sellers
Mortgage rates are expected to stay near their current levels of low 6 percent. The economic stimulus package, which includes increases in FHA and conforming loan limits, should allow more buyers to purchase real estate over the next year. With more buyers competing for homes, the final sales price tends to be much closer to the asking price, creating stability of local home values. Many Carlsbad communities and surrounding cities also have seen large discounts in the asking price from the high home sales of 2005. Homebuyers should consider this an excellent opportunity to purchase, if their dream home is for sale.