Home Buyers Forced to Change Tactics

The credit crunch has turned $417,000 into the magic number for home buyers shopping for mortgages.

Rattled investors have become reluctant to buy loans for more than that amount — known as jumbo mortgages — and that in turn has pushed some lenders to raise interest rates. Caught in the middle are potential home buyers who are getting walloped by higher rates or shut out of the market.

The phenomenon is particularly significant in Washington, where half the homes sell for more than $417,000. Here, home buyers are figuring out how to adapt to the new circumstances by making larger down payments or splitting their purchase into two loans to dodge higher rates. Others are sitting tight until the rates go down.

The course they take can have deep implications for the mortgage industry, the housing sector, and by extension, the economy. If too many potential jumbo-loan borrowers wait it out, chances are the excess supply of homes on the market will swell, further dragging down prices. Home values fell in 15 of 20 large metropolitan areas in the second quarter from a year earlier, according to a report yesterday from S&P/Case-Shiller. They fell 7 percent in the Washington area.

To read more click here!

By Dina ElBoghdady

Washington Post Staff Writer
Wednesday, August 29, 2007; Page D01

Realty Around The World

Last year I had the opportunity to stay in Dubai, United Arab Emirates(U.A.E.) for almost a week.  I chuckle now because of the complaints with the traffic in our area, and the never ending construction. Dubai is one of the fastest growing economies in the world, and it is evident the moment you step off the plane. I was there as a government contractor, so we traveled in large groups. As our entourage cleared the airport property, the skyline was shown to us as a moving, mechanical thing. 

15% to 25% of the 125,000 construction cranes currently operating in the world today are located in Dubai.

 Nothing but skyscrapers littered the sky, and perched on top were huge cranes.  Every roof top had one, and no doubt every available crane in the region was here. According to construction trade sources, 15% to 25% of the 125,000 construction cranes currently operating in the world today are located in Dubai. Yes you read that right, the world! Developers are flocking to because it boasts some of the world’s most liberal tax, investment, and residency laws.  A  Google search on “Dubai real estate” yields over 2 million hits.  So you think our area is booming?  Take a look at the pictures I snapped. I am very excited to visit Dubai in the future. A guy on the airplane explained to me that Dubai will be a mix of Paris, New York, Miami, and Las Vegas. Right now it only makes Linton Hall Road look like the Autobahn!