There is serious discussion between Congressional leaders and the White House about increasing the loan limits from $417,000 to $625,000 (perhaps as high as $725,000 in high-cost areas) for guaranteed/insured Fannie Mae and Freddie Mac loans. From LATimes.com – “And in a provision crucial to high-housing-cost states such as California, there would be a significant one-year increase in the size of mortgages that could be backed by the government. That would make it far easier for homeowners to refinance into more affordable mortgages.”
Single family homes sales on the Palos Verdes Peninsula may not directly be affected. In 2007, the average price (reported monthly) for a single family home that sold on the Peninsula fluctuated between $1,513,000 and $2,355,000. The actual high for 2007 was $12,900,000 and the low was $807,500.
This change may favorably affect townhomes and condominium sales here on the Palos Verdes Peninsula as the average price (reported monthly) for a condo/townhome in 2007 fluctuated between $516,000 and $688,000. The actual high for 2007 was $1,050,000 and the low was $235,000.
Indirectly, increasing conforming loan limits will affect the Palos Verdes Peninsula because of the “domino effect”. In other words, buyer’s from other areas wishing to purchase in Palos Verdes will find buyers for their homes who will be taking advantage of these higher Fannie Mae/Freddie Mac guaranteed loan limits.
This is great news for the housing industry.
