Home for the Holidays

There are ten weeks left in 2010 so if you have a 2010 goal of buying a house it is time to start getting serious about it.  While I’ve never been a proponet of “everyone should buy now!” campaigns there are some things that those on the fence should consider.  On a traditional or foreclosure sale we’re still seeing around 30 days for escrow, 45 days is a safer bet.  Short sales are very, very unlikely to close by year end.  The exception might be where there was an approval in place by the bank but the buyer the approval was for walked away from the transaction.  If you have any time related need to close escrow, don’t count on short sale.

  • Mortgage rates remain at historically low levels- unlikely to change greatly in just 10 weeks but is always a significant consideration in a purchase.
  • Potential tax advantages (talk to your accountant)
  • FHA loan limits are set to expire 12/31/10. The current FHA loan limit for the Portland MSA is $417,000.  The tradional law for calculating the loan limit is 115% of the median home price.  The current limit was set when the area’s median price was higher and Congress had set the limit temporarily at 125%.  If we use the latest RMLS median price of $240,000 and the 115% multiplier the new loan limit would be $276,000.  Unless Congress acts by the end of the year, a lower limit is very possible.  There seems to be very little discussion about this found on the Internet.
  • Current pricing for the metro area  is currently at June 2005 levels according to Case Shiller.  Is this a pro or a con?  Depends on whether you think the market will remain flat, increase or double dip.

Other factors include but are not limited to the general health of the economy and unemployment rates, what you could potentially rent for the same payment/monthly expense and whether there are things that you can do in the short/long term to improve your credit rating which drives your interest rate.

Buy now?  Maybe.

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