Thursday, March 06, 2008

South Bay-Beach Cities: Conforming Loans Increasing to $729,750

The South Bay-Beach Cities received some good news on the housing front today. The government has finally agreed to raise the limits on FHA and conforming loans in 14 California counties ( Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz and Ventura). Other high priced areas will be added to the list.

This means we should shortly be seeing conforming loans at $729,750. This will be a boost for many who want to refinance or who are looking to buy a first home. Entry level housing in Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo will see benefits from this move by the government. The rates may be slightly higher the current rates. I'm guessing around 6%-6.25% but that is still far better then rates for the same loan amount at current jumbo rates.

Here's a breakout of the number of entry level homes in the Beach Cities:

Manhattan Beach: $ 999,999-
Homes: 12
Townhomes/codos: 8

Hermosa Beach: $999,999-
Homes: 13
Townhomes/condos: 15

North Redondo: $729,750-
Homes: 24
Townhomes/condos: 45

South Redondo: $800,000-
Homes: 4
Townhomes/condos: 44

El Segundo:$850,000-
Homes: 10
Townhomes/condos: 21


Anonymous said...

This may have an interesting impact on median's. If it is effectively more easy to get loans for these lower price houses (than higher), volume at low end may pick up and therefore move the median point down.

Would be interesting.

One of the reasons put out there fore the rapid drop in medians in cheaper areas is that higher priced houses cannot get financing, so houses cheap enough to sell with conforming mortgages still sell and higher end stalls.

The "old" conforming limit is really irrelevant for S.Bay, no housing really applies.

Now a sub-set may apply that will sell and effectively increase low-end volume and potentially drop the median numbers.

Kaye Thomas said...

Anonymous 2:30,
I think we will see a marked impact on the North Redondo market as well as El Segundo and South Redondo townhome/condo market.

I'm not sure it will have a huge impact on the median price in MB or HB as we still have more homes in the higher brackets then in the entry level.