Facts: Courtesy California Association of Realtors (CAR). The opinions are my own!

My prediction: Homes priced below the limit (whatever that limit will be) will rise in price over time, while those above the limit will languish. Read below for details.

Senate votes to extend loan limits

Late last week, the Senate passed an amendment to an appropriation bill that
would reinstate the conforming loan limits to $729,750 through December
2013.  The Senate and House now are working out the differences between
the Senate and the House bill, which the House passed earlier this year.
C.A.R. also is working with the California Congressional Delegation to ensure
this provision is included in the final bill.

NAR worked tirelessly to keep this issue alive and collaborated with senators
to explain the negative impact the lower loan limits are having on the market.
California Sen. Dianne Feinstein played an instrumental role in ensuring the
loan limit amendment was included in the bill.

Why will this positively impact the value of your home?

It’s Economics 101. Increasing the limits will allow more buyers to buy homes in the higher price ranges using the a FHA loan of 3.5% down. More demand means higher prices.

In the final analysis that’s what dictates the prices of ALL goods, including real estate. Anything that increases demand will increase prices. So will decreasing supply. We are currently at a 5 month supply of homes, that’s below the 6 month benchmark which has traditionally marked the sign of a balanced market.

Call to discuss anytime. And please don’t forget…I am never to busy for your referrals!