Spiro Hishmeh

Don't let the plunging median sales price fool you -- December's Existing Home Sales data has home sellers smiling.

Just one month after falling below the 5-million unit trend line, sales volume roared back by 300,000 homes in December, surprising housing analysts and making a case that this spring's Buying Season could be a competitive one.

Falling home prices helped fuel home sales. Nationally, the median sales price -- the point at which half of all homes sold for more and half sold for less -- was $175,400, down $32,000 from last year.

However, the most important part of December's Existing Home Sales report isn't making headlines.

At December's sales pace, it would now take 9.3 months to exhaust the existing home supply. Last month it was 11.2 months. This means that buyers are competing to purchase fewer homes which, in turn, puts upward pressure on home prices.

This is Supply and Demand at its most basic definition.

Economists have long said that the keystone of housing's recovery will be rebalancing in home supply. Coupled with the all-time low in housing starts, December's Existing Home Sales data signals future strength.

(Image courtesy: The New York Times)

Poor indoor air quality is linked to Sick Building Syndrome, a combination of ailments with more than 50 seemingly separate and unrelated symptoms, including:

• Dizziness and nausea
• Headache
• Symptoms related to Irritable Bowel Syndrome
• Personality changes

Avoiding sickness like this -- as explained by The Today Show -- may be as simple as choosing the right paint for your home. 

Most "standard" paints come loaded with chemicals called VOCs -- volatile organic compounds.  The naturally-occuring chemicals are added to the paint to help it spread better and last longer.  Unfortunately, these same chemicals are damaging to soil and groundwater, react with sunlight to form dangerous ozone, and contribute to global warming.

There is a safer choice.

Non-VOC household paints are widely available for about the same cost as their toxic cousins.  They're eco-friendly and, because recent advances in the manufacturing technology, the paint quality is outstanding.

To buy the non-VOC paints featured in the video, head to your local Benjamin Moore dealer, or get it online from Cox Paint.

As part of the Economic Stimulus Act of 2008, Congress authorized a conforming loan limit increase in "high-cost" areas around the country. Versus the national conforming loan limit of $417,000, for example, a Manhattan home buyer could secure a 2008 mortgage for $725,000 and still be within "conforming" guidelines.

Effective January 1, however, those limits rolled back. Conforming mortgages in the 59 designated high-cost regions are now capped at $625,500.

In non-high-cost areas, the 2009 conforming loan limits remain unchanged from 2008.

• 1-unit properties : $417,000
• 2-unit properties : $533,850
• 3-unit properties : $645,300
• 4-unit properties : $801,950

Loans in excess of these dollar amounts are often called "jumbo", or "super jumbo" home loans, depending on their size. Jumbo home loans tend to be more costly than their conforming-sized cousins.

For more info check out my website www.SpiroHishmeh.com

With home prices falling across most parts of the country, investors in real estate are finding good value in certain rental properties. Unfortunately, they're also finding it harder to get approved for a home loan.

After getting stung by defaults, conforming mortgage standards for non-owner occupied home loans tightened dramatically last quarter.

One major change was the reduction in the total number of homes Fannie Mae or Freddie Mac will finance for any one borrower.

Prior to the chance, the number of financed properties could be as high as 10. Today, that number is 4, stinging investors with large real estate portfolios. Going forward, buying properties isn't the problem; financing them with conforming mortgage money is.

Another guideline change mandates larger downpayments.

Versus early-2008, when a real estate investor could buy a home with 10 percent down, today's investor is required to pay 15. But, as an added wrinkle, few private mortgage insurers write policies against rental homes anymore, rendering the 15 percent downpayment insufficient. The de facto requirement, therefore, is now 20 percent down.

And then came the fees.

As part of its "pay-for-risk" pricing model, Fannie Mae added mandatory fees to all of its investor property mortgages this year. Based on loan-to-value, the fees are:

• 75% LTV or less: 1.750 percent of the borrowed amount
• 75.01 - 80.00% LTV : 3.000 percent of the borrowed amount
• Greater than 80% LTV : 3.750 percent of the borrowed amount

So, if your personal plan includes the purchase of investment properties in 2009, consider the impact that tighter conforming guidelines, larger downpayments and higher fees will have on your bottom line.

All things considered, now may be a good time to make that rental property bid. Sure, prices may fall going forward, but increased acquisition costs may wipe out the long-term gains.

For more information about San Francisco Real Estate please visit my San Francisco Real Estate website.

For the first time in over a year, the sales of "used homes" fell below the 5-million unit trendline, helping to push the total home inventory higher by 0.1 percent nationwide.

Based on the rate at which homes are selling nationwide, it would take 11.2 months for the existing housing supply to be exhausted.

For home buyers, this is an opportune time for negative news on housing.

First, sellers know that between now and the Super Bowl, housing activity will be light. The general scarcity of buyers may force a seller to accept a bid he wouldn't have accepted otherwise.

Second, the economy is showing weakness and that, too, can concern a home seller. Buyers are less likely to extend themselves during times of economic uncertainty, further reducing the buyer pool and, again, putting pressure on the seller to "make a deal".

And lastly, because the government has been trying to force mortgage rates down as a way to stimulate the economy, the weak housing data is actually making it cheaper to finance a home. This means that a well-qualified home buyer can better stay within budget.

Each 0.500 percent rate reduction saves $33 per $100,000 borrowed.

It is important to remember, though, that the U.S. housing market is not national -- it's highly localized. This is one reason why national real estate reports can be misleading. Just as figures from Phoenix have little to do with statistics from St. Paul, even data from neighboring ZIP codes can vary.

The universal truth, however, is that a home that is priced fairly will sell more quickly than a home that is not. And, until the Super Bowl passes in 45 days, expect fewer buyers to be out there competing for them.

(Image courtesy: The Wall Street Journal Online)