If there are to be mortgage bail-outs,
it looks like the Bay Area won't get much or any of it; the Bay Area is just too special. But that's okay. I mean, who wants to be "bailed out" and trapped in their house when their house is worth less than their mortgage? Sometimes it is better to just jump ship and swim to shore than to be handed a designer life preserver while locked in your cabin.
Fannie Mae and Freddie Mac pledged at least $20 billion to help homeowners caught in the subprime meltdown, but those in the Bay Area could be left out.
The loan limit on government-sponsored enterprise loans for single-family homes in California is $417,000. The Bay Area’s median home price in March was $639,000, according to DataQuick.
Since the loan caps are made by the federal government, there’s little Fannie Mae or Freddie Mac can do, said Fannie Mae spokesman Alfred King. ‘It’s going to be tough in some areas like yours,’ King said.
‘It’s cruelly cosmetic for California,’ said Ed Leamer, director of the University of California, Los Angeles Anderson Forecast. ‘It’s just restructuring, not debt forgiveness.’ Leamer said that even $40 billion is too small to make a difference.
If there are to be mortgage bail-outs, it looks like the Bay Area won't get much or any of it; the Bay Area is just too special. But that's okay. I mean, who wants to be "bailed out" and trapped in their house when their house is worth less than their mortgage? Sometimes it is better to just jump ship and swim to shore than to be handed a designer life preserver while locked in your cabin.
7 comments:
the good news is that subsequent buyers should be able to pick up homes for under that 417k cap within 2 years.and pretty nice ones,at that.prices in many parts of the bay area could be accurtelt described as bizarre and surreal the last few years.i clearly recall driving by american canyon a few months in a car full of appraisers,when one mentioned that homes there ran in the $800k range.$800k!after a moment of appreciatve silence,I asked if the prices were justified by special amenities...like burger king or safeway stores, since the area seemed somewhat removed from the economic centers of the bay area?"I can't think of a better reason" was the response i got.so cheer up,fellow renters! FHA loans are not too far in the future for bay areans,and perhaps less than the max amount too!
Yeah Tom, you got it right.
There is some serious corruption going on here.
These prices are crazy..............
American Canyon for $800K?
I'm not buying in to this BS
Thanks
Thanks for that inside peak at what some of RE machine actually think regarding these prices Tom...
I say this new news regarding bailout caps is just nail for the Bay Area RE coffin....
Matt
I just wanted to add this link.
http://patrick.net/housing/crash.html
It's a pretty good way to look at buying now.
In my opinion, the Bay Area deserves zilch. The general snotty attitude I hear from people in SF and environs is that the Bay Area
" is a very European city and doesn't feel like the rest of the US."
Well, if so many people here are just dying to make-believe that we're really living in Europe, then what more could you ask for than a European style socio-economic structure complete with class disparity and homes that must be inherited?
Yes. The Bay Area is so much like Europe.... even in the crappy way people must live in order to get what people in " the other" parts of the country simply get by living their lives as ordinary citizens.
Screw the bailout. The attitude here is partially to blame for the high prices. I refuse to allow any of my taxes to fund any bailout whatsoever.
bob said...
I refuse to allow any of my taxes to fund any bailout whatsoever.
Wow! Cool! You've found a way to control how your taxes are spent!!
Indeed- you write to your local government representative and explain your dissatisfaction of having your taxes being used to help bail out irresponsible people from buying overpriced houses. The system works if people use it.
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