Conforming mortgage loan limits raised for Essex County

While the Federal Housing Finance Agency (FHFA) has announced that the 2014 maximum conforming loan limits for mortgages acquired by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, will remain at $417,000 for one-unit properties in most areas of the country, the limit in Essex County will increase from $465,750 to $470,350.

Earlier this year FHFA had announced that it was contemplating a reduction in loan limits for 2014, but that announcement was met with a tsunami of protests.

With the change in the rules for Senate approval of most nominees, it is highly probable that the FHFA will soon have a new head, Rep. Mel Watts, who is expected to be more amenable to carrying out the Administration’s goals in the housing market.

Here is an article with comment on some of the effects expected with Mr. Watts in charge.

Conforming Loan Limit

Fannie Mae and Freddie Mac are restricted by law to purchasing single-family mortgages with origination balances below a specific amount, known as the “conforming loan limit.” Loans above this limit are known as jumbo loans. The national conforming loan limit for mortgages that finance single-family one-unit properties increased from $33,000 in the early 1970s to $417,000 for 2006-2008, with limits 50 percent higher for four statutorily-designated high cost areas: Alaska,  Hawaii, Guam, and the U.S. Virgin Islands.  Since 2008, various legislative acts increased the loan limits in certain high-cost areas in the United States.  While some of the legislative initiatives established temporary limits for loans originated in select time periods, a permanent formula was established under the Housing and Economic Recovery Act of 2008 (HERA).

If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.




Housing inventory numbers show market remains very tight

While most people are concentrating on the holidays at this time of year, houses are still selling – and quickly – as I reported last week.  With very little inventory well-priced homes do not last for long.

Beverly, Danvers, Georgetown, Lynn,  Lynnfield,  Peabody and Salem have month after month had 3 months or less of inventory (6 months is considered to be a market in equilibrium), while Manchester has had the largest supply. (more…)

Flood Insurance (2): the facts

While waiting to hear whether Congress will take up a bill to delay the implementation of the new flood insurance premiums they voted into law before they understood the consequences ( telling  the National Flood Insurance Program, NFIP, which is losing money to end subsidies and go to full actuarial rates results in premiums going up. Apparently nobody in Congress took any economics courses in college and this has come as a surprise to them – or maybe it was just because they don’t read Bills before voting on them), I have been digging into the history of the NFIP. In particular I have looked at the record of Massachusetts as a whole, by County and by Town.

It is extraordinary how many reports I have read on flood insurance without any of them providing basic data. Tracking down what follows has been a challenging task but I think the numbers are accurate and provide an understanding of the magnitude of the subject.

I will start with the overall NFIP.

As of September 2013, there were 5.6 million flood insurance policies in force (PIF).Two-thirds of the policies were in just 6 States; Massachusetts has just 60,000 of the 5.6 million policies, or 1.1%: (more…)

Marblehead’s Property Tax Rate for 2014

At its meeting this week the Selectmen approved a tax rate for FY2014 of $11.09, an increase of 2.2% from FY2013’s $10.85. As is customary, the Selectmen set the same rate for commercial premises, stating that it would be “unfriendly to business” to set a higher rate for commercial property.

The tax rate includes the effect of debt exclusions (or overrides as we call them). Here is my estimate of the breakdown between the base levy (which is the 2 1/2% increase over the prior year plus new growth, such as new construction) and the cost of debt exclusions:

Sources: Board of Assessors

Sources: Board of Assessors, Oliver Reports


Mortgage rate forecast to rise to 5.1% in 2014

This time last year, when the 30-year mortgage rate was under 3.5%, the Mortgage Bankers Association forecast that it would rise to 4.5% by the end of 2013. That is very close to current mortgage rates so with that track record their forecast for 2014 bears noting.

MBA is forecasting a rise to 5.1% by the end of 2014 and a further rise to 5.3% by the end of 2015. (more…)

One year and 147 posts later…..

This weekend marks the anniversary of my first blog. I remember being concerned about making a commitment to writing every week and publishing at 8 a.m. on Saturdays. Perhaps I remembered what a journalist told me that it is easier writing to a deadline. I may have had a few late Friday nights and many early Saturday mornings but I have not missed a post all year. I have learned the joy – and angst – of hitting the Publish button. And yes I have unintentionally deleted a few blogs.

I wondered if I would find something of interest every week. Well I guess 147 posts in 52 weeks suggests that I did, at least to me. I have tried to include commentary on all major issues that might affect a decision by a buyer or seller of real estate.

I have written quite a lot about mortgages and mortgage rates; about national and State data on sales and median prices; and about supply at different price points.

I have published an interview with Marblehead’s Assessor talking about property taxes (watch for the latest news in a few weeks) and have started a series about flood insurance.

Specifically in Marblehead and other North Shore cities and towns I have posted detailed breakdowns of sales and prices for both SFHs and Condos, and on more than one occasion the data has demonstrated a change in trend. (more…)

Flood insurance: Part One

A friend said to me recently: “why don’t you write an article about flood insurance?”

Ah, if it were only that simple.

I do plan to write regularly on flood insurance, so please regard this as the first in a series. It does not have all the answers because the story is still unfolding. Two things to bear in mind are that flood damage is not covered under a standard homeowner policy and that flooding occurs throughout the country, not just in coastal areas.

I do have an important message at the end of this article for anybody who is paying flood insurance. (more…)

Housing market recovery to last

This week Forbes published an article, link below, suggesting – with data to support the argument – ” that housing is finally shaking off both the Great Recession and the excesses of the preceding housing bubble.”

The article concludes: “we can expect to see more good news coming – most likely when the 2014 spring/summer selling season emerges. It looks as though 2013 could be the pivotal year needed to produce a bright future in housing.”

The housing recovery is a world-wide phenomenon, as I know from seeing daily reports from around the world.

Here is a summary of the article: (more…)

Marblehead Housing Report for October

Here are the headlines:

Single Family House (SFH) sales were just 12, after being in the 22-30 for each of the previous 6 months. YTD sales are 196, almost unchanged from last year’s 197. With 35 pending sales the year’s total will likely be very close to last year’s level, whereas in the summer it looked as though that total would be easily passed.

The slowdown can be attributed to: the jump in mortgage rates in the summer; the hoopla in Washington over a Government shut down; the lack of supply at the lower end; and the lack of demand at the higher end.

The median price through 10 months of 2013 is $536,000, up 5% from $510,000 in the first 10 months of 2012.

Condo sales were 3 in October, taking the YTD number to 35 compared with 36 last year. With 10 sales pending, the year’s total may improve slightly on last year’s 42. While only 12 condos sold in the first half of 2013, the third quarter alone saw 20 sales, the highest number in one quarter since Q2 2005. Supply remains low with only 17 available for sale.

The median price for condos through 10 months of 2013 is $330,000. While this is a 31% increase from 2012, last year’s number was depressed by the large number of sales at the lower end. In 2011 the median price for 10 months was $310,000.

As with SFHs, it appears that we have cleared out most of the inventory at the lower price levels.

If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.



Housing Inventory: it’s déjà vu all over again

Well shock horror: the market remains short of inventory at the lower end and has an abundance at the higher end. Same old story.

What is perhaps surprising is how little change there has been in the last seven months. In general the tightest markets at the beginning of the summer remain the tightest today.

Here are the tables for several North Shore cities and towns. First SFHs:

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports