Austin Real Estate (Unnamed Copywriting) 5 of 10

If you are considering purchasing a home in the Austin area, now is the time to act. The Market has hit its bottom, and you are running out of time to take advantage of this fact.

In the last nine months, the Austin market, unlike the housing markets of the rest of the country, has slowing been improving. From January until now, we’ve seen almost an eight percent increase ion the median home selling price. Nine months is enough time to feel comfortably that the we have already hit the market bottom. If you want to take advantage of record low home prices, you need to act fast.

But, more important than the increasing home prices are the increases in lending guidelines. If you don’t act quickly, you won’t need to worry about the market bottom, because it will become very difficult to obtain financing for a mortgage at all.

The past two years have brought the utter elimination of all sub-prime lending, the government control of Freddie Mac and Fannie Mae, and increases in all of the federal lending guidelines for FHA and VA loans. The initial feeling is that the removal of sub-prime loans and the tightening of lending overall is a good thing. But, especially come January, it will become evident that this is not the case. For all the bad press that these loans have received, they were the tool that got people in to homes.

Two years ago, a banker had literally hundreds of different loan programs to use to get you approved for a mortgage. Now, there are only four: VA loans, which are only available to veterans, USDA loans, which are only available in rural areas, FHA loans, and Conventional loans.

When the government seized Freddie Mac and Fannie Mae, it implemented new appraisal guidelines, called the HVCC, or Home Valuation Code of Conduct. Again, this was a program that was designed with the best interest of the borrower in mind. But, in practice, this code has turned into something else altogether.

The code calls for banks to eliminate any form of communication between a homeowner or a loan officer and an appraiser. The idea is that this will keep the appraisals more honest, and ensure that there are no more mortgage crises in the future. The problem is that the code accomplishes this lack of communication by requiring that all appraisals be ordered through Appraisal Management Companies and be ordered by the bank. The result is that appraisals are more expensive, and more importantly, are coming back an average of 10% below market value, in order to protect the banks’ investments.

This has made it next to impossible to obtain financing for a home using Freddie or Fannie, effectively making FHA loans the only option for most borrowers. But, the new announcement by the FHA is that as of January 2010, all FHA loans will adhere to the HVCC guidelines as well.

So, if you trying to decide whether the time is right to buy a house in Austin, you need to see that the time is now. If you want to take advantage of great financing, and you want to take advantage of great home prices, you need to get out there and start looking.