Jumbo Loans Sales Slump!

A couple of weeks ago Jeff Collins of the O.C. Register headlined that “Home sales mired in jumbo sales slump.”  Well, there certainly has been a slump in jumbo loans (loans more than $417,000)…..in fact, jumbo loans have declined 61% since the credit crunch.  Part of the reason is that for a few weeks, a jumbo loan was more than 1% higher (and sometimes more) than a conventional rate (less that $417,000).  As a result, sales for properties more than $600,000 fell by more than 50% .  In this article, John Karevoll is quoted saying “Loans for more than $417,000 just aren’t closing or aren’t closing as fast.”  The disappointing news is that Fannie Mae/Freedie Mac did not increase the amount of a conforming loan and that the limits will remain the same.

 I’d like to report, that with the Giacobbi Group being recognized as a Preferred Realtor with a major portfolio lender—we’ve recently gotten our clients great rates for jumbo loans, and closed one a week ago in just ten days!  The differential between the conforming and jumbo loan rates is now narrowing, and that should help the higher end market and thereby the jumbo loan market.  With a rising number of Notices of Default (NODs) and foreclosure properties (REOs—Real Estate Owned), the prices for discretionary sellers is also being pulled down.  Because everything buyers read is negative, and buyers think that property values will continue to decrease, all buyers want a deal—they want the price of six months from now.

Lesslie Giacobbi

Lesslie Giacobbi

714-764-3474

LesslieGiacobbi.com

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