But in my opinion the biggest thundercloud is on the horizon. That is, given the new conforming limits and the more stringent requirements banks are putting on loans, who will be able to afford what? Previously the 850K to $1.2M property was a relative sweetspot for both luxury condo buyers and SFR buyers alike. However, there is a chance that in the very near future this zone will prove to be a very difficult one in which to maneuver. Look at it closely. The banks are asking for 25% down. So what it boils down to is this: Who in the heck buys a $1.2M property with 300K cash down?
(If we can get some mortgage broker participation on this one, that would be really great. In my opinion this is the biggest challenge to the SF market so far.)
I have a related question too. Doesn’t it seem as if there could be some money made by opportunistic banks here? There are 50 boatloads of responsible buyers out there. People with up to 20% to put down and good jobs, etc. Whatever happened to the old 80-10-10? And wouldn’t a bank capable of portfolio-ing loans be able to make some great returns with such a product?
fluj a k a kenneth kohlmyer