New Entries
FNMA Regulations May Slow Sales of New Pasadena Condo Units
If you have followed our posts on the Pasadena housing market, then you are well aware that sales of townhomes and condominiums have been lagging behind that of single family residences. As the price of a single family home declines, homebuyers are deciding there is more value in a private residence that offers a 5000 to 7500 sq ft lot, than in a
Walnut & Lake Pasadena Condo
Fannie Mae Adds Restrictions
Talk about kicking someone when they are down, Fannie Mae just increased the occupancy requirements on new condo/townhome projects. When you are purchasing a condo/townhome, your lender wants to know how many units in the complex are owner occupied. They perceive a higher number of owner occupied units as less risk of failure, and today everybody is about minimizing risk. If too many units are rentals, they will not make the loan or they will increase the cost and fees to the borrower. The conforming loan limit for high cost area’s is $729,750.
Local Impact in Pasadena
How will this affect the local housing market? Take for example the new complex located and aptly named Lake@Walnut. This project features 111 units and according to the Pasadena MLS a current 2 bedroom and 3 bath unit is for sale at $594,100, which by the way has been reduced $100,000 since it was originally listed for sale last year. If you are a homebuyer and you have had your eye on this property, you may find out that your borrowing costs have gone up unless 70% of these units are sold.
Is Anyone Home at The Dalton?
Take another new project in town. The Dalton featured 55 units located at 238 S. Arroyo Parkway. Actually the new Fannie guidelines may not have time to impact this project. When I looked in the MLS today all of the listings have been cancelled, the phone has been disconnected
The Dalton on Arroyo Pkwy
Loan Fees
Lower interest rates have been receiving a lot of news lately, however what is missing from the reports, is the cost to acquire the money is going up. Fannie expects to raise borrowing costs on condo and townhome’s by 0.75% if buyers aren’t coming in with at least a 25% down payment. If you are making a loan application make sure you look at the total cost of the loan, not just the interest rate. A low interest rate may have higher upfront fees and a higher overall cost. Ask for a Good Faith Estimate which will include the total cost of your loan.
Tags: Fannie increases requirements for new condo construction, Pasadena condos and townhomes, Pasadena new housing construction
April 1st, 2009 at 4:48 pm
How funny… I was just about to comment on another post and ask about some of the silly condo projects and your perspective. Well, I just gave away my opinion. I’ve seen the Dalton and Lake@Walnut go on and off on the MLS for some time now. I even noticed that the Dalton increased their price significantly on 1 and 2 bedroom units on the second time listing while real estate was showing obvious weakness in SoCal. I thought they were insane, especially when you look at their site regarding their CRE space. Their advertisement shows local 2007 income data of roughly $50-55K as a selling point, however, it seems to contradict what that same local market could afford.
When it comes to Lake@Walnut, adding insult to injury is the weakened state of Standard Pacific who got a much needed capital injection of $500 million last year. Is that enough? That can’t make banks too confident.
The one I’m most curious about is Toledo Home’s 250 S Delacey project. Have you seen that ludicrous pricing? That place is ranging from $1.1M-1.5M per unit at $620-820 per square foot. At that price, I’d rather pick up a nice place in Linda Vista.
April 2nd, 2009 at 9:41 am
Why anyone thought a Manhattan project (in terms of price) would be successful in Pasadena is anyone’s guess. I think it showed the mentality that existed during the bubble years. It will be interesting to see what happens to this project during the next several months.
April 2nd, 2009 at 11:56 am
Well, I can’t argue with that. I’m a New York transplant, and one of the things I liked about Pasadena, besides the weather, was the close proximity of stuff to do and the relaxed homey feel.
April 23rd, 2009 at 9:35 pm
What a facinating article. I’m looking for a marketing expert to help with a project, could you help?
April 23rd, 2009 at 10:28 pm
John,
I would certainly be very interested in hearing what you have to say.
July 1st, 2009 at 8:48 pm
[...] are dramatically affected new developments, especially in hard hit areas such as Florida and California. Through discussions with some fellow Massachusetts real estate professionals, the impact here is [...]
September 21st, 2009 at 9:34 pm
[...] Certainly, the revised guidelines are negatively affecting condominium buyers’ ability to obtain conventional loans for either a new or established condominium if the project does not conform. Most notably, the changes are dramatically affecting new developments, especially in hard hit areas such as Florida and California. [...]
February 19th, 2010 at 9:59 pm
[...] Certainly, the revised guidelines are negatively affecting condominium buyers’ ability to obtain conventional loans for either a new or established condominium if the project does not conform. Most notably, the changes are dramatically affecting new developments, especially in hard hit areas such as Florida and California. [...]
March 17th, 2010 at 7:05 am
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March 21st, 2010 at 7:12 am
[...] Certainly, the revised guidelines are negatively affecting condominium buyers’ ability to obtain conventional loans for either a new or established condominium if the project does not conform. Most notably, the changes are dramatically affecting new developments, especially in hard hit areas such as Florida and California. [...]