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High Balance Loan Limits Set to Expire for Tri-Valley and the Rest of the U.S.

On September 30, 2011, the high balance loan limits are set to expire.  Currently, for “high cost” areas like the Tri-Valley area, the high balance loan limit is set at $729,750.  This limit was originally established as part of the Economic Stimulus package of 2008. This amount will be adjusted down to $625,500 for high cost areas. For the Tri-Valley housing market, this reduction in the high balance loan limit could have dramatic impacts. Loans could be subject to tighter credit conditions.  

For one, the interest rate you are securing will most likely be at a higher amount.  For example, if you are shopping for a home and have determined that you will need a loan amount between $625,500 and $729,950 that loan will now be secured at a higher interest rate.  As of this article, a jumbo loan rate is about ½% higher than a conforming 30 year fixed rate according to Bankrate.com.

Another impact is that a loan over the $625,500 mark will require a down payment of at least 20%.  The option to put less than 20% down for loans between $625,500 and $729,950 will be no longer.

Both factors could mean weaker demand for homes in the high cost markets.  This eventually could lead to downward pressure on prices.

Tri-Valley Area 2010 Real Estate Review and 2011 Predictions

I am envisioning him now – a fraction of the man he used to be.  This is no dig on Al Roker for his amazing weight loss.  Strictly an opportunity to use a phrase he casts out to millions of viewers on a daily basis, “Here’s what’s happening in your neck of the woods.”  The goal of this article is to give you a clearer understanding of what happened in your “neck of the woods” (the Tri-Valley area) for real estate in 2010 and to offer my predictions for 2011. Let’s dig in. 

The Tri-Valley area has been a very interesting place to conduct real estate transactions over the last year. Not only is every transaction more difficult to complete, there are numerous outside influences impacting the real estate trends in the Tri-Valley.  I feel there are four primary factors that influenced Tri-Valley real estate in 2010 and these items will continue to impact the real estate market in the near future.  These four factors are the number of foreclosures/short sales in the market, interest rates, lending ability and inventory numbers. 

The wave of foreclosures/short sales has taken its toll this year on the market.  For most of the year in the Tri-Valley, the percentage of active homes that were foreclosures/short sales was between 40 and 50 percent at any given time.  In some specific subdivisions, those numbers were closer to 75 to 90 percent at times. For instance, in the Tassajara Creek, Tassajara Meadows and Roxbury neighborhoods of Dublin, 9 out of the 10 currently active/pending homes are foreclosures or short sales.  What contributed to this high percentage in the Tri-Valley?  It is my belief that it is directly related to the large number of homes purchased between 2005 and late 2007.  This was during a time period when home prices were at their highest and loans were being handed out with little scrutiny.  Despite the tightening of nationwide lending practices and the fact that we have seen a significant decrease in home prices, I still expect the percentage of short sales and foreclosures to continue at around the 40 to 50 percent range well into 2011. This is based on my current discussions with sellers and other Realtors around the area.

Secondly, interest rates have been at historic low levels for most of 2010.  Bankrate.com shows the current interest rate as of construction of this article at 4.96 percent.  I expect a slow and steady increase of rates to continue into 2011.  However, I have mixed feelings about how this will impact buyer demand.  First, I do believe that there are a number of individuals currently living in the Tri-Valley area who have only been accustomed to interest rates in the 4 and 5 percent range.  These individuals have relocated to the area from out of the country or have only become interested in home ownership in the last few years.  The fact that they have only experienced interest rates at these low levels will create a greater “sticker shock” as interest rates continue to rise in the future and may sideline many of these buyers in the short term.  However, once interest rates reach a certain higher level, it would seemingly have to Read more

A Winter Wonderland: Yosemite National Park

My family and I recently went on a trip to Yosemite National Park. The trip was inspired by my son’s study of John Muir for his class at school. Our stay was so fantastic – we thought we would share our gratitude for this amazing place with you!  What was most surprising for us was how close this true gem is to our home in the Tri-Valley. 

In about three hours, we were staring out at the Merced River from our hotel room’s back patio. We stayed outside of the park (at Yosemite View Lodge-bonus points for an indoor pool!), and drove to the park in the morning. Yosemite is a definite winter wonderland, and the views we were lucky enough to experience were simply breathtaking.  We also had fun walking the Lower Yosemite Fall trail and playing in the snow at Curry Village. Yosemite was awe-inspiring, and we’re hoping to fit in another trip in 2011.

Holiday Fun in Dublin

Looking for some fun things to do in the Tri-Valley area?  The City of Dublin has a number of things in store for the holidays.

27th Annual Holiday Tree Lighting
Thursday, December 2, 7:00-8:30pm
Cost is Free. Fountain Plaza Area, Dublin Civic Center
The entire family can kick off the holiday season with entertainment and caroling while enjoying delicious cookies and hot chocolate. The Dublin Unified Elementary School Choir will perform and there will be a visit from Santa Claus.

Old Fashioned Holiday Workshop and Visit with Old St. Nick
Saturday, December 4, 2:00-4:00pm
$5 per person at the door
Photos with Old St. Nick: $5 each. Dublin Heritage Park and Museums
This is a hands-on workshop where you will be able to create memorable holiday gifts including orange pomanders, spiced pine cones, popcorn and cranberry garlands, and gingerbread ornaments. Festivities also include a holiday sing-along, cookies and hot cider. Old St. Nick will be on hand for visits and photographs.

Breakfast with Santa
Saturday, December 11
$6.50 Residents / $7.50 Non Residents. Shannon Community Center
Santa Claus is coming to town so you better be good and get your tickets to the annual Breakfast with Santa. Proceeds from this event directly benefit the Dublin High School Irish Guard Band Boosters. Pre-registration is required and there are several seating times available (8:30am / 9:45am / 11:00am). Don’t delay – this event always sells out!
$6.50 Residents / $7.50 Non Residents

Holiday Tea
Saturday, December 11, 12:30pm
Sunday, December 12, 12:30pm
$25 per person. Dublin Heritage Park and Museums
Treat yourself to a delicious luncheon served in the holiday glow of this historic setting. The menu includes finger sandwiches, savory sweets, tea and punch. Tables seat four, but larger parties can be accommodated. Pre-registration is required. Register early to avoid missing out.
Special Offer: Sign up for the Tea and Bay Bells Concert below for only $30 per person

Bay Bells Winter Concert
Sunday, December 12, 3:30pm
Dublin Senior Center
The Bay Bells annual appearance continues with their performance of Silver Bells. Bay Bells have been entertaining audiences throughout the country for the past 25 years and represent over 200 years of musical experience, featuring over 100 bells and chimes. It is true holiday entertainment the whole family will enjoy.
Adults: $10
Youth 12 and under: $5
Children 5 and under: $3

Letters from Santa
Do you know a child who would like to receive a personalized letter from Santa? Each letter will be personalized based on the information submitted on the Letters from Santa registration form. You may also attach a letter from the child to Santa with the registration form. Letters may also be requested online by clicking here. Requests must be received by December 8.
$6 Residents / $7 Non Residents

For more information about any of these events please call 556-4500 or visit www.DublinRecGuide.com.

Mortgage Rate Update Ending 11/24/10

Bankrate.com  conducts a weekly national survey on the interest rates for the five most common consumer banking products.  Here’s the outcome for 11/24/2010:

• 30 Year Fixed Rate: 4.58 percent
• 15 Year Fixed Rate: 3.97 percent
• 5/1 ARM (Adjustable): 3.66 percent

According to the Mortgage Bankers Association:

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