Stabilization Mission Complete

Hola People.
The HUD has just set a temporary one year policy to broaden what FHA buyers can buy. To be in effect on 2/1/10, this policy will allow FHA buyers (government backed loan with 3.5% down until that changes. Stay tuned) to purchase homes that have been foreclosed on and put back on the market or flipped (although the attached article says "flipping" is a predatory practice. Why? I don't know. They make really bad and unrealistic realty shows, but it's not necessarily an evil thing).
The current rule is that if you are using an FHA loan to buy a house, the seller has to have owned it for more than 90 days. The HUD feels the new policy will open the door to affordable properties for people who do not have the conventional (kind of funny that they still call 20% down "conventional" when hardly anyone has it) 20% down and will in turn stabilize home values.
This will be a big deal, just not here in San Diego (at least initially). Right now (not later right now, right now) there are currently 45 properties in San Diego county that say "No FHA, 90 day rule" that are actively on the MLS. There are a combo of 8,078 active houses, townhomes and condos on that same MLS.
I don't want to be too much of a downer, this is a good thing. The ripple will help. Those 45 properties and the ones to follow will get a better sales price because there will be more buyers competing. That better price will drive up the comparable sales analysis that will drive up appraisals and that will set appreciation in motion (or, at least fight off depreciation). Not to mention this temporary policy really helping other parts of the country that are really being beat down. That brings up the GNP which will eventually cut into unemployment.
How long will this take? A lot longer than the one year temporary policy will last.
Click on the title above to read more about it.
God Bless