Happy Holidays and Thank You!

The holidays are approaching and with that comes the special time of year where we want to give thanks and show love to our family, friends and people who have helped us this past year. We hope that our family, clients and business partners feel the same way and offer thanks to the people who have made you the person you are today.

We want to wish you all a happy and safe holiday. Thank you!

New Lending Guidelines to Dodd-Frank

Today I want to talk about a topic that gets everybody listening: Money, Money, Money.

As we go into 2014, many will be asking themselves: what's going to happen in the marketplace, and what will be the drivers?

It's commonplace in today’s market for the government to factor heavily into that equation, and that's exactly what I want to talk about today. A new law called the Dodd-Frank Wall Street Reform and Consumer Act is kicking in at the beginning of next year that will change the lending guidelines for all of the country. This law will have the most effect on those in lower income brackets, because it directly effects borrowing power. Under the new guidelines, borrowing power based on monthly income will decrease by 7% from 50% to 43%.

This will cause house prices to soften as sellers adjust the limitations in borrowing put on the potential buyers.

Will this 7% decrease in borrowing power create a catastrophe in the housing market? Not likely, but what we will see is increased pressure on lenders. And pressure on lenders, coupled with a decrease in borrowing power, means that in addition to housing prices going up, interest rates will increase as well.

If you have any questions relating to your property or the future of the housing market, don't hesitate to call me at (650) 766 - 5300.

Thanks, and have a great day.