Open House Picks: Six Months Later

Dittoburg your last comment was what we were alluding to, prices will fall so significantly that the difficulty of getting that low rate mortgage will be worth it many times over in savings. We are thinking price corrections in the >25% range in many “fringe” neighborhoods.
Alas this is clearly a buyers market even with the credit crunch.

Ditto,

Be clear about this: it is not easier to get a loan on a $1.1M house versus a $1.3M (assuming down payment percentage is roughly the same). Especially now when banks are hoarding cash.

“11217”, you are right on the money. I don’t think interest rates are going to go lower any time soon. If you were in the market and smart/lucky enough to get a formerly jumbo loan at a 6% (30 year fix) interest rate, you did just fine. For those who are waiting for prices to come down $100K on million dollar homes and end up with 8%(+) interest rates, don’t think you got a deal.

Guys, yes, there is a point at which a mortgage is so low that even in this environment one might breeze through the process. However, the prices at which these houses are listed are not in that range. (Let’s face it, these houses wouldn’t list now for half of the price that they listed for six months ago. Ten percent lower, I wouldn’t argue with that.)
Also, recognize that some of these buyers may have sold places at the same time they were in the market to buy. If you are a buyer hoping to do that now, you’re in for long wait since properties aren’t flying off the shelf. Six months ago, things were moving faster. (I know because that is when we sold and bought–and I am ecstatic that we did.)

Finally, you have to keep in mind, that (depending on the downpayment) these homes closed in the temporary window of reduced conforming loan limits. That window closes December 31 and I read that some banks are trying to move up that date. People who are looking at homes that are priced at nearly a million dollars or more are going to be looking at jumbo rates in very short order.

And don’t kid yourself by thinking that just because the Fed lowers interest rates that banks are passing along that savings to their customers because they most certainly are not. So yes, if you close on a jumbo loan on January 1, 2009 you will have a high interest rate, which will probably offset whatever gain you think achieved by waiting to buy.

I saw the house on 11th St and was seriously considering putting in a bid. At the time, I was surprised that it took a while to sell since that’s a very cute block and the house, while small-ish, was in lovely condition. We ultimately decided against the house due to school zone issues, and also because despite the good condition, it still needed a decent amount of updating/renovation. I think they got a good price for the time, but I’m glad we did not buy this past spring since, as the Open House picks today show, prices are at last really coming down.