19
Mar
Condo Loans … More Difficult to Obtain
Yesterday, Fannie Mae severely tightened its lending criteria for condominiums. As the vast majority of mortgage loans are sold to Fannie Mae, this change will make it much more difficult to sell condominiums in many condo developments.
From the Wall Street Journal:
The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won’t back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single entity.
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19
Mar
No Housing Market in Florida
From a Florida reader: I am on the other side of the nation — Palm Beach area of Florida. The market hasn't reach near bottom because there is NO market. I am a serious prospective buyer. The house I am renting for the winter is not "listed" and therefore does not show up in any numbers of unsold inventory. But the day we moved in we were told by the realtor for the people who own the proerty that it was for sale. "How much would I have to pay?" The realtor answered: about $850,000." Two doors down from where I am renting, the same exact model with the same features as this house is actually listed for sale and just dipped below an ASKING price of $700,000. A few doors up the street, the same model is also on the market listed at around $1 million.
What does that tell me? Two things: 1) when prices for basically the same product are so varied, there is no market; 2) the price of the market will be set by the most recent LOWEST price of a sale (as opposed to the up market when the last highest price set the market). But even the low prices aren't finding buyers, except in abberant cases that aren't replicable (e.g., a distressed sale snapped up by buyers who find some reason that they must move or just came into some money, etc.). Until there is a market there can't be a bottom. In Florida, at least around Palm Beach, West Palm Beach, Palm Beach Gardens, there is no market and there is no bottom and it's probably a year off. San Diego housing market
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