{"id":3333,"date":"2008-11-10T16:55:01","date_gmt":"2008-11-11T00:55:01","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=3333"},"modified":"2008-12-31T11:56:59","modified_gmt":"2008-12-31T19:56:59","slug":"government-loan-limits-lowered-60k-for-seattle","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2008\/11\/10\/government-loan-limits-lowered-60k-for-seattle\/","title":{"rendered":"Government Loan Limits Lowered $60k for Seattle"},"content":{"rendered":"

As astute market observers may recall, back in March (pre-complete-government-takeover) the conforming loan limit for Fannie Mae and Freddie Mac-backed loans was bumped from $417,000 to $567,500 for the Seattle area (King, Pierce, and Snohomish counties). At that time, the local press was touting the new limits at \u201ca big dose of first aid<\/a>\u201d and the \u201cshot in the arm<\/a>” for the housing market, while here at Seattle Bubble we asked the question: Will Higher Government Loan Limits Boost Seattle\u2019s Market?<\/a><\/p>\n

Our conclusion was that the added lending restrictions attached to the “Temporary Jumbo Conforming” loans set the bar sufficiently high as to prevent the higher limits from having the (apparently intended) effect of preventing home prices from falling further. Given that the median price of homes in the Seattle area have fallen 6-8% in the intervening seven months, it would appear that this assessment was accurate. Of course, one could argue that perhaps without the higher conforming limit, prices would have dropped 10% or more in the same time, and there’s really no way to know whether that might be true.<\/p>\n

If we assume that the Seattle area’s $567,500 temporary conforming limit did in fact somehow soften the blow, however slightly, then the latest news that this limit is being dropped to $506,000<\/a> is likely to be unwelcome. However, it should be noted that as far as I am aware, all the same restrictions are still in place including, but not limited to:<\/p>\n