Ada County December Market in Pictures.

 

The Deals That Aren't!

There are a number of statistics out there talking about how a higher percentage of contracted deals fail to close. And I have certainly seen it,  I avoid a lot of the problems by doing my homework and working with a good loan officer, but some of those things just can't be avoided. Like the failure of short sales to get approved, there are just too many variables out of my control. With experience and knowledge I can negotiate a lot of them but I still can hit the roadblocks of 2nd liens that will not negotiate or mortgage insures playing hard ball.

Here is a post from KCM Blog addressing some of these issues.

I have seen estimates stating that 29% of deals that go to contract and require a mortgage, don’t close. That number boggles my mind. It means that even after a buyer and seller come to terms on a sale (not an easy feat these days), 3 out of 10 transactions fall apart. What are some of the more common reasons?

• Appraisal issues – In many markets, we are still seeing declining values. Appraisers are in a difficult position, and with so many transactions (including seller’s concessions to assist buyers with closing costs) values aren’t always coming in at sales prices.


• Short Sales not being approved by the current lender – With so many sellers owing more than their home is worth, buyers’ proposals need to be sanctioned by the lender (who will be receiving less than they are owed). Some of the offers are too low, but often, the lender isn’t local and they really don’t know what the property is worth today.


• Bad pre-approvals from the loan officer – Today, loan officers who are not reviewing tax returns, analyzing bank statements, and asking for detailed explanations and documentation on credit blemishes, are truly hurting the customers. Issuing pre-approvals based on the representations of the customer is reckless and a cause for dismay later.


• A lack of transparency – Whether it’s a seller or agent not disclosing property issues, or a buyer trying to sneak things by an underwriter, too many people think they can cut corners. That is not the world we live in anymore. Everything is uncovered. Being honest in the beginning, gives you the best chance to overcome obstacles.

 

It is clear by the numbers that closing loans can be more difficult today. However, with proper planning and integrity, many of the challenges can be dealt with early and successfully. Agents documenting values of the homes, loan officers doing complete reviews of the loan profile up-front, and everyone telling the truth helps get deals to a successful conclusion and avoids horror stories.

 

Another One Bites the Dust!

I had a closing today on a bank owned house in Kuna. It took a bit longer due to some of those mortgage issues you hear about. The first thing was the underwriter for the buyer's loan in looking at the title decided that it would be considered a "flipped" house even though the bank was the seller. Didn't make much sense to me but my opinion is not what counts on these things. So a 2nd appraisal was ordered. Then the underwriter decided that there was some repairs that needed done beyond was was called for by the appraisers, it appears the buyer's agent had something to do with that. It was not the only questionable activity pulled by this agent in this transaction, but it is done and it is time to move on to the next.

Speaking of next, I just received back an accepted counter offer on a cute listing in the Boise'e north end.  So business moves on.

The PTC Index for Ada and Canyon Counties.

Here is the December PTC Index, previously I have only provided the combined Ada and Canyon Index, which I will continue to provide. But I will do the separate county's breakdowns now as well, as it really is the tale of two different markets.

The PTC Index is a monthly measurement of the vibrancy of the Treasure Valley real estate market. Based on a custom weighted algorithm, it combines nine critical measurements of the real estate market into a single, useful number: the PTC Index. To give you some perspective, when the market was at its most active point in 2005, the PTC Index average would have been 225. In January of 2010 we reached a low of 28. Though times have changed, the need for this data is greater than ever.

The PTC Index utilizes a proprietary algorithm that weighs nine key real estate variables. These variables, though widely available, have not been easily collected in a single location. The PTC Index changes that.

This months PTC Index details are below. Previous months can be viewed by selecting a date from the drop down menu below.

These numbers are for Ada and Canyon County.

Typically one of the slower months in real estate, December 2011 resulted in numbers that held steady since the month prior. Notably, distressed properties, which include short sales and REO (real estate-owned) properties, plummeted by 10% down to 2,837 from 3,140 from November. Notices of default also saw a decline of 5% from the month prior from 412 to 391 filings. Additionally, days on market made a drop valley-wide from 80 to 75 days. Financial bonds held steady while new homes sales ticked up slightly, and existing home sales dropped, each by 2.5%. Refinances held steady at 793 while the average Treasure Valley sales price dropped by 5% from $146,492 to $138,907.

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January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011

December 2011

Building Permits	132
New Home Sales	79
Existing Home Sales	600
Refinance	793
Average Sales Price	138907
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	75.5
Distressed(Short Sales and REO)	2837
Notices of Default	391
PTC Index	120

Ada County

December 2011

Building Permits	116
New Home Sales	72
Existing Home Sales	397
Refinance	658
Average Sales Price	181307
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	86
Notices of Default	223

Canyon County

December 2011

Building Permits	16
New Home Sales	7
Existing Home Sales	203
Refinance	135
Average Sales Price	96507
Financial-Bond Market(10-yr Treasury)	1.98
Days on Market	65
Notices of Default	168

Courtesy of Pioneer Title Company

I'm Bullish On Boise-Ada County Real Estate

Another KCM Blog post. Nationally and locally-IT IS TIME TO BUY!

Another Bear Turns Bullish on Real Estate

Two weeks ago, we posted When the Prophet Says Buy – BUY! In that post, we explained that a major bear on housing, John R. Talbott, is now bullish on the real estate market. Last week, another bear turned bull.

Chris Thornberg, a former UCLA economist and a founding principal of Beacon Economics, was very skeptical of the housing market in 2007. However, in an article by the Orange County Register on January 13^th, he is quoted as saying that now is:

“…a great time to buy a home…If you’ve been thinking about buying a condo in Vegas or buying a condo in Miami, buy now.”

We started off 2012 with two of the biggest bears on housing converting to bulls and telling us to BUY NOW! It might just be time to buy!!

 

 

Real Estate 2012: Many Positive Outlooks

There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever we write a post like this, we unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.

It is for that reason we will not be covering the projections of those groups. Instead, we want to share the beliefs of other organizations.

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.”

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”

CoreLogic:

“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

 

Mortgage Rates Continue Trend of Record-Breaking Lows

^[1]Freddie Mac recently released the results of its Primary Mortgage Market Survey®, showing mortgage rates easing to new all-time record lows for all products covered in the survey helping to keep homebuyer affordability high. The average for the 30-year fixed mortgage rate has been below 4.00 percent for six consecutive weeks.

The survey concluded that the 30-year fixed-rate mortgage averaged 3.89 percent, with an average 0.7 point for the week ending January 12, 2012, down from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

The 15-year FRM this week averaged 3.16 percent with an average 0.8 point, down from last week when it averaged 3.23 percent. A year ago at this time, the 15-year FRM averaged 4.08 percent.

Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.72 percent.

Results showed that the 1-year Treasury-indexed ARM averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. At this time last year, the 1-year ARM averaged 3.23 percent.

“Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” says Frank Nothaft, the vice president and chief economist of Freddie Mac. “Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated.”

 

My Size of Lawn to Cut!

Ada County-Now is the time to buy!

Ada County has hit bottom with regard to values and with interest rates at historic lows, now is the time to buy! Give me a call and let's find the perfect place for you!

Do you have squeaks?

I was showing some folks a home the other day n Eagle. It was a newer home priced around $435,000. As we walked through it we hit a rather loud floor squeak. So when I saw this little tidbit from the AAD Inspection Company I thought I would include it.



 

Ada County December Market Report

2011 December sales were 477 in Ada County, a decrease of 9% over December 2010. Total sales for 2011 are 6,299; up 7% over 2010. In July of 2011, we exceeded YTD 2010 sales for the first time in 2011. This is our first year-over-year increase, without influence of the home buyer tax credit, in a few years.  This is our first time crossing the 6,000 homes sold threshold since 2007…how long ago that seems! December sales decreased 3% from November’s 487. Historically, December sales decrease from November. Of our total sales in December… 48% were distressed….up 1% from November 2011. In January 2011, 57% of our sales were distressed. We have seen a mild overall increase in the percentage of sales in distress. In July we were down to 42% overall and have seen the amount increase one to two points each month. For homes sold in December, the average number of “Days on Market” was 86. This is essentially unchanged from last month. Down from 90 days last year this time and down from 93 days in January 2011. Pending sales at the end of December were 691; a decrease of 7.5% from the end of November. This represents the smallest number of pendings in 2011. That is fairly consistent with historical data.  The percentage of pending sales in distress increased 1% from November, totaling 49% overall. This is the highest number of pending sales in distress we’ve had since early spring. Even so, we are now at eight consecutive months below 50%. At the end of December, we had 20% more sales pending than at the end of December 2010. December median home price held at November levels. Overall median price was $149,300; up 1.2% from December 2010. For all of 2011 our median was down 6.97%.  That is a significant improvement from where we were in January 2011: down 20%. New Homes median price for December 2011 was $223,739; an 24% increase from December 2010. Year-to-date new homes median is up 15% over 2010 to $237,500. The number of houses available continues to decrease. At the end of December our total active inventory was 1,991 homes. This is down 9% from November and 25% less than last year at this time. Our inventory has fallen below where we would call the market “in equilibrium”.  We are now in a “shortage”. At the same time, the percentage of distressed active inventory held steady at 36%. We have been hovering between 33% and 36% since May. We remain well below the 40% levels set last spring….when we were on the increase. In Ada County we have 4.2 months of inventory on hand…historically this number defines a strong “seller’s market”. The price category in shortest supply is <$119,000 with 2.5 months. In the range of $120,000 to $159,999 we have 3.9 months. All price points up to $400,000 have less than 5 moths supply. We have benefited all year from inventory levels much lower than national average. now, however, we are starting to see some slowdown in sales as the inventory continues to fall. Based on December sold data, our most desirable price point is $120,000 to $160,000 which made up more than 20% of total sales. There is no longer any doubt that, in Ada County, we have passed our “low water” point.

 

Secluded Cottage in Boise's North End!

I just listed this cute 1935 vintage home on north 28th in Boise. It has been professionally landscaped which will make this home a flowering paradise of relaxation come springtime!



With hardwood floors, new energy efficient windows, lots of natural light and a fantastic location close to downtown and the foothills it is a real gem.

For more information please come to my website LowesFlatFee.com. Or you can always just give me a call 208-602-0055.

 

The Future Power of Assumability!

I mentioned a couple of days ago about my buyers that just closed on their new home did so with the help of an interest rate of only 3.75%. Not only is that powerful for them being able to buy the home, it may very likely be a powerful selling point when it becomes time to sell their home.  We spoke about this at the closing table. And I noticed this KCM Blog covering the same topic.

One of the rarely touted advantages of people taking FHA mortgages today is the fact that they are assumable. What that means is, when the FHA homebuyer of today is looking to sell his home, a qualified purchaser can “take over” their loan.

Most people believe that interest rates will return to a “normal” range (between 6.5% and 7%) in a couple of years. When you assume a mortgage, the terms remain the same. This means that a buyer five years from now can enjoy a 4 – 4.5% mortgage by assumption rather than the 6.5% – 7% mortgage they would get without it. Since most people buy homes based on how the monthly payment fits into their personal monthly budget, this is extremely impactful.

As an example, a $300,000 loan at 4% today carries with it a $1,432.25 principal and interest payment on a 30 year fixed mortgage. If offered for sale in five years, the purchaser could assume the $271,858.56 balance with the same $1,432.25 payment and remaining term of 25 years. The total payments over the 25 years would be $429,675.

Compare that to a new $272,000 loan at 6.5% for 25 years, which would carry a monthly payment of $1,836.56 (over $400 more a month than the assumption and more than $120,000 more over the 25 year term).

At 6.5% for 25 years, to wind up with the same payment as the assumed mortgage, our borrowers would only be getting $212,000…$60,000 LESS!

 

The KCM Blog: People Are Buying Homes AND GETTING MORTGAGES!

Yesterday's post spoke briefly of one family's 1st home. Today's covers a much more broad swath courtesy of KCM Blog.

Many believe that very few houses are selling and that almost no one can get a mortgage. We want to let everyone know that neither of these assumptions is true. Recently, the National Association of Realtors (NAR) released their Existing Homes Sales Report. According to the report there are, on average, 12,109 homes selling in the United States EACH and EVERY DAY! That means that approximately 12,000 houses sold yesterday, approximately 12,000 will sell today and approximately 12,000 will sell tomorrow. So the thinking that homes aren’t selling just isn’t true.

Another interesting fact in the report was that 72% of these transactions were accompanied by a mortgage. That means that approximately 8,719 people qualify for a mortgage on a daily basis in this country.

There are over 12,000 homes sold and over 8,000 mortgages granted every day. The real estate market is doing better than many believe.

 

First Time Home Buyer

Just back from a closing, it is always gratifying to help folks into their first house, especially when it has been a long time coming for them. Their 3 kids are going to love it! And the mortgage rate of only 3.75% is the icing on the cake! Amazing. (More likely it made the whole cake possible.)

These buyers moved here from California where owning a house was not even in the realm of possibility, it was exciting to see them and hear them relate of the houses they lived and how much larger and nicer this home is and they are excited to join the ranks of responsible homeowners.

Today's market is not always easy with short sales, bank repo's and the tighter underwriting requirements, but days like today make it all worthwhile.

 

When the Prophet Says Buy – BUY!

While I may be a bit uncomfortable with the title prophet attached atop to this economist and author, it appears his predictions with regard to housing has been spot on.

From KCM Blog

John R. Talbott, previously a Goldman Sachs investment banker, is a bestselling author and economic consultant. When it comes to the housing market he is also a prophet. When housing prices started to skyrocket in 2003, he published The Coming Crash in the Housing Market correctly warning us that a real estate bubble was forming. Then in January 2006, he called the absolute peak of home prices in the US by releasing a new book, Sell Now! The End of the Housing Bubble.

Mr. Talbott, the person who accurately predicted the housing bubble and its bust, now has a new prediction – IT IS THE TIME TO BUY A HOME! In a recent article, Homes – Buy Now!, Talbott simply explains:

“I have been waiting for more than five years to offer this advice. It is now time in most cities across the country to buy a new home or refinance your existing home with thirty-year fixed rate mortgage debt.”

He goes on to explain that his conclusion is based on four different metrics, all of which favor buying today:

• Home Prices Relative to Peak Prices During the Bubble


• Home Prices Relative to Construction Costs or Replacement Costs


• Home Prices Relative to Incomes and Rents


• Home Prices in Real Terms, Not US Dollar Terms

Bottom Line

If the person who called the real estate bubble and its bust says now is the time to buy, we believe it is time to buy.

 

Idaho and Negative Equity.

I found this national chart representing the percentage of negative equity by state, it shows Idaho at between 21-30%. Unfortunately, if it was broken down further I am afraid this Boise-Nampa Metro area would have a much higher percentage of negative equity.

Mortgage Predictions for 2012

It’s the time of year that we look ahead and attempt to give our best guesses about the market, the industry, and the effects they may have. So, here are my thoughts about the mortgage world:

Interest Rates Should Be Stable

With a faltering economy nationally and worldwide, including pessimistic estimates for employment, there is little chance that the Fed will risk increasing rates which would jeopardize any recovery. Couple that with a Presidential Election in November and conventional wisdom says we’ll see rates hovering in the same neighborhood for most of 2012.

Mortgage Costs Will Increase

Quietly tucked away in those bills passed in Congress to extend the payroll tax cuts before the holidays was an increase of 10 basis points in the guarantee fees on loans sold to Fannie Mae and Freddie Mac. That will translate into .10% higher interest rates (which would be $4000 extra on a $200,000 loan over 30 years). Interestingly enough, the additional revenue is not going to Fannie or Freddie to help with defaulted loans, but rather going to the US Treasury to make up for the payroll tax cut….go figure.

The Mortgage Interest Deduction Will Be Challenged

Look for people of a certain income level to lose their write off as a measure to increase revenue. Taking away from the wealthy as a way to raise governmental revenue is politically strategic. It is unlikely everyone will lose the deduction (political suicide), but that top 1%…watch out.

Loan Products Will Expand

Common sense lending will start creeping back. Large down payments will liberalize credit and income standards. This will likely begin with local banks who are comfortable with appraised values. I’m not calling for a return to the madness, but some loans that are low risk are not being done today. Anticipate some lenders expanding their guidelines.

Don’t be shocked by a lowering of FHA loan limits and/or an increase in the FHA Up Front Mortgage Insurance Premium either. Overall, mortgages should give people more reasons to buy homes in 2012 as the economic recovery is strongly tied to housing. Given that most people vote their own personal economy rather than policy beliefs, I expect support by those who are looking to be re-elected.

Courtesy of KCM Blog

 

More Predictions of 2012 Real Estate Trends

Here are some highlights from the folks at KCM Blog

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

• They will eat up some of the buyer demand in the market.


• They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

 

Top Real Estate Stories of 2011

In 2011, we experienced one of the most volatile housing markets in American real estate history. Things we never anticipated happened. Events we were sure would take place didn’t. Today, we want to review the five headlines we think had the biggest impact in 2011.

1.) Interest Rates remained at historic lows

In order to help stabilize the economy in 2010, the Fed took certain actions which kept mortgage rates at or near historic lows (approximately 4%). Most felt this would be a short term tactic and once abandoned would result in rates returning to long term averages (6-7%).

However, the government has continued to support lower rates with the hope of fostering a recovery in the housing sector. The 30 year fixed rate mortgage (as measured by Freddie Mac) stood at 4.77% to begin 2011. A month later, it was over 5% and many, including us, believed this was the beginning of rates returning to normal levels. Instead, rates continued to fall ending 2011 at 3.91%.

The lower rates along with great prices have had a favorable impact on home affordability leading more buyers to enter the market.

2.) Sales up over 2010

At the beginning of 2011, we all realized that a year-over-year (Y-O-Y) comparison of home sales would not be a true “apples to apples” comparison as home sales at the beginning of 2010 were bolstered by the Home Buyers Tax Credit. Likewise, comparing home sales over the summer would not be a fair comparison as many sales in 2010 were dragged forward so that buyers could take advantage of the credit. However, many thought Y-O-Y comparisons would again be useful later in 2011 as the impact of the 2010 tax credit waned. Yet, the National Association of Realtors (NAR) Existing Homes Sales Report shows that over the last three months sales have increased quite nicely. The October and November reports each showed a Y-O-Y gain of in double digits and the December report gain was 12.2%. These numbers showed closed sales were increasing even though more contracts were falling through.

3.) Contract cancellation rate surges

Probably the most troubling trend to emerge in 2011 is that the number of sales contracts that are cancelled before closing has skyrocketed in the last year. The cancellation rate has jumped from 9% in August 2010 to 33% each of the last two months.

Some of the increase can be attributed to the higher level of difficulty in distressed property transactions. However, NAR also says cancellations are caused largely by “declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.”

4.) Foreclosures were delayed

The robo-signing debacle of late 2010 caused a delay in many foreclosures entering the market. It DID NOT prevent the banks from continuing to put homes into the foreclosure process. The delays jut prevented banks from repossessing the homes and putting then up for sale as REOs (foreclosures owned by the banks).

For most of 2011 the banks and the state governments worked on a set of standards that would be enforced before a bank could repossess the house. They are currently working on a settlement to be paid for those homes that where foreclosed on without the proper paperwork.

As these procedures and settlements are completed, more and more of the backlog of distressed properties will come to market. Distressed properties sell at a discount. They will have a substantial impact on the prices of all houses in the region.

5.) Prices move up then down

Many experts expected prices to continue to slide downward as we entered 2011. However, a large inventory of distressed properties was held back (see #4). That turned out to be good news for prices as supply decreased throughout the year and demand increased in the second half of the year. That actually caused prices to ‘bottom out’ and ten nudge upward in the late summer and early fall.

As the foreclosed properties again began to enter the market in the last quarter, prices again began to slip. Most believe this downward trend will continue through the first half of 2012.

We spent today looking into the rearview mirror. Tomorrow, will share some of the trends we think we will see in 2012.

Courtesy of KCM Blog

 

Buying a House? Get an inspection. Buying a Bank Owned Home? GET AN INSPECTION!!!

I always recommend getting an inspection done before buying a home. Our standard contracts provide for a certain number of days to complete these inspections after the offer is accepted. Inspectors do not find everything that may be wrong with the house, but they sure do find most things. If you are buying a re-sale home there is likely going to be some items in need of replacement or repair. Getting a good idea what those things are and determining if there is any major issues is the job for a experienced, professional, trained home inspector.

We have a large amount of REO(Bank-Owned) properties on our market, they provide even more reasons to get a home inspection as the following article expounds on.

Courtesy of Homeworks Home Inspection Services.

REO PROPERTIES: As we move forward into 2012, we will continue to see REO (bank owned) properties available on the market. These properties present a great opportunity for home buyers to purchase a home at a great price! A professional, competent home inspection is essential for any buyer whether purchasing an REO property or not. Bank owned properties have often been vacant for extended periods of time and are typically sold AS IS! I have performed hundreds of inspections on REO properties in the past 2 years and become quite profficient at finding problems within homes. The problems I find vary from house to house, and whether the problems are typical and due to deferred maintenance or in some cases serious requiring expensive repair by a licensed contractor, make no mistake, no home is without need of at least some maintenance or repair and REO properties that have been sitting vacant for extended periods of time need to be inspected thoroughly! CONDITIONS OFTEN FOUND IN REO PROPERTIES: Moisture Issues: Homes that are closed up sometimes undergo humid conditions for extended periods of time. Mold is occasionally found due to humid conditions and these conditions can sometimes be extensive. Once identified, however, mold and associated problems can usually be remediated and the underlying cause can be eliminated through proper clean up, repair and ventilation. Leaks in Gaskets, Valves & Hoses: Leaking valves, gaskets and appliances are often found during home inspections of bank owned houses that have been vacant for long periods of time. All appliances and plumbing fixtures include at least one valve, seal or gasket. Gaskets and seals dry out and loose their ability to properly seal resulting in leaks. Plumbing supply pipes are also susceptable to freeze damage over winter months if winterization does not occur or is done improperly or too late. Vandalism: Vacant properties are much more likely to be vandalized. Transients and even disgruntled homeowners often cause damage. Some of this damage is easily seen and other damage may not be visible and may go undiscovered unless a professional home inspection is conducted. Infestation: Vacant properties are often found to be inhabited by mice, insects, racoons, squirrels, cats, etc. Damaged or missing foundation vents typically provide access to these vermin or animals. The absence of human occupancy provides the conditions necessary for infestation to occur as these conditions would typically be detected early within a normally occupied home. Blocked Sewer & Drain Lines: Blocked sewer or drain lines are not uncommon within bank owned properties. Our inspections include a performance check of all plumbing fixtures and associated drains.

 

2012 looks better for real estate! Even in Idaho?

Well if you survived the ringing in of the new year then I guess it is time for some housing predictions. They are of course talking nationally, but here in the Boise-Nampa Metro Area our inventory is constricting, and we are subject to national interest rates and other trends. Our valley could use some strong economic news.

Experts see a bottom this year, followed by a gentle upsurge in home prices.

By MSN Money partner on Tue, Jan 3, 2012 9:29 AM

This post comes from Marilyn Lewis at MSN Money.

One fun part of ringing in the new year is placing bets on what it will bring. Collecting New Year predictions isn't as silly as it sounds; it gives knowledgeable players a chance to share what they know.

For those of us trying to gauge whether to sell, buy or rent in 2012, every scrap of wisdom helps. Here are predictions from a few trusted voices in real estate:

Karl Case

Case, an economist and professor emeritus at Wellesley College, is one of the nation's smartest observers of the real-estate market. The S&P/Case-Shiller Index, invented by Karl Case and Robert Shiller, "is pretty much the Dow Jones industrial average of real estate," says The New York Times.

"The 20-city composite index of home prices hit bottom in March 2011 and has improved modestly since," writes the Times in a year-end look at the economy.

Judging from the index that bears his name, the future holds nothing but more grimness for real-estate values in the U.S. "Nasty Case-Shiller shows home prices barely off their crisis lows" is how Forbes put it last week.

"But Mr. Case points out that the data masks some signs of eventual recovery," says the Times. Here's Case's assessment:

"Household formation is increasing and the vacancy rate is dropping," he said. "Housing starts are at a 60-year low, and they've been there for three years. That's unheard-of. We're starting to see some signs of an increase in value."

Diana Olick

CNBC's real-estate reporter is no economist. Olick's academic preparation consists of a BA in comparative literature and a minor in Soviet studies. But she's smart, her "Realty Check" blog keeps a sharp eye on real estate and she talks with the best analysts in the business.

Among her predictions:

Home prices finally hit bottom by late 2012 but not before dropping 5% more.

Plenty more homeowners will default on their mortgages, keeping a huge backlog of foreclosures looming over the market. (Of course a monkey with a Magic 8 Ball could have predicted this.)

Rents rise as demand for rentals grows.

Government makes no dramatic efforts to solve the housing mess.

Bloomberg

"Even the worst-hit markets will begin to see improvement by 2012," write Bloomberg real-estate reporters Prashant Gopal and Diana Holden. They, too, say prices will drop more before a turnaround begins.

Bloomberg makes predictions for home values in metro areas and each of the 50 states, including median home values predicted for 2012 and those in 2008, when the bust began, plus the percent of change expected.

Three examples:

Arizona

Metro: Phoenix-Mesa-Scottsdale
What a Home Will Be Worth in 2012: $141,859
Q4 2008 price: $169,000
Projected price change by MSA: -16.1%
Projected price change by state: -17.2%

Michigan

Metro: Warren-Troy-Farmington Hills
What a Home Will Be Worth in 2012: $157,469
Q4 2008 price: $149,000
Projected price change by MSA: +5.7%
Projected price change by state: +2.0%

New York

Metro: New York-White Plains-Wayne (N.Y.-N.J.)
What a Home Will Be Worth in 2012: $343,937
Q4 2008 price: $440,000
Projected price change by MSA: -21.8%
Projected price change by state: -15.6%

Kiplinger

The summary beneath the headline sums up Kiplinger's outlook: "The bleeding is just about over. But don't expect a speedy recovery."

Writes the magazine:

The median home price in the U.S. has plunged nearly 40% in a little over five years, but the worst is definitely over: The market has finally wrung out the last excess valuations born of the housing bubble.

Assuming no further shocks to the economy (no safe assumption, given the fragility of the world economy) U.S. real estate will slowly work its way out of the red, Kiplinger predicts.

Among experts interviewed, Mark Zandi, chief economist at Moody's, says prices will drop no more than 3% to 5% in 2012, "setting the stage for gains in 2013."

FoxBusiness

FoxBusiness interviewed John Lonski, chief economist at Moody's Capital Markets Group, who sounds bullish on housing:

"Financially strong households that have spent money at Tiffany's and on cars are afraid of putting money in housing as they don't want to arrive too early," says Lonski. "But we could be surprised at how vigorously the ensuing upturn of home sales becomes."

Tara-Nicholle Nelson

Inman News columnist Tara-Nicholle Nelson is an attorney and a real-estate agent, giving her a boots-on-the-ground perspective. She predicts:

Prices will recover faster in cities with thriving high-tech industries. Among them: Silicon Valley and the San Francisco Bay Area; Austin, Texas; Massachusetts suburbs of Cambridge, Newton and Framingham; Rochester, N.Y.

"REOs and short sales will become the new normal" as banks continue to foreclose and dispose of the backlog of homes on their hands. "Buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market."

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Experts see a bottom this year, followed by a gentle upsurge in home prices.

By MSN Money partner on Tue, Jan 3, 2012 9:29 AM

This post comes from Marilyn Lewis at MSN Money.

One fun part of ringing in the new year is placing bets on what it will bring. Collecting New Year predictions isn't as silly as it sounds; it gives knowledgeable players a chance to share what they know.

For those of us trying to gauge whether to sell, buy or rent in 2012, every scrap of wisdom helps. Here are predictions from a few trusted voices in real estate: Post continues below.

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Karl Case

Case, an economist and professor emeritus at Wellesley College, is one of the nation's smartest observers of the real-estate market. The S&P/Case-Shiller Index, invented by Karl Case and Robert Shiller, "is pretty much the Dow Jones industrial average of real estate," says The New York Times.

"The 20-city composite index of home prices hit bottom in March 2011 and has improved modestly since," writes the Times in a year-end look at the economy.

Judging from the index that bears his name, the future holds nothing but more grimness for real-estate values in the U.S. "Nasty Case-Shiller shows home prices barely off their crisis lows" is how Forbes put it last week.

"But Mr. Case points out that the data masks some signs of eventual recovery," says the Times. Here's Case's assessment:

"Household formation is increasing and the vacancy rate is dropping," he said. "Housing starts are at a 60-year low, and they've been there for three years. That's unheard-of. We're starting to see some signs of an increase in value."

Diana Olick

CNBC's real-estate reporter is no economist. Olick's academic preparation consists of a BA in comparative literature and a minor in Soviet studies. But she's smart, her "Realty Check" blog keeps a sharp eye on real estate and she talks with the best analysts in the business.

Among her predictions:

Home prices finally hit bottom by late 2012 but not before dropping 5% more.

Plenty more homeowners will default on their mortgages, keeping a huge backlog of foreclosures looming over the market. (Of course a monkey with a Magic 8 Ball could have predicted this.)

Rents rise as demand for rentals grows.

Government makes no dramatic efforts to solve the housing mess.

Bloomberg

"Even the worst-hit markets will begin to see improvement by 2012," write Bloomberg real-estate reporters Prashant Gopal and Diana Holden. They, too, say prices will drop more before a turnaround begins.

Bloomberg makes predictions for home values in metro areas and each of the 50 states, including median home values predicted for 2012 and those in 2008, when the bust began, plus the percent of change expected.

Three examples:

Arizona

Metro: Phoenix-Mesa-Scottsdale
What a Home Will Be Worth in 2012: $141,859
Q4 2008 price: $169,000
Projected price change by MSA: -16.1%
Projected price change by state: -17.2%

Michigan

Metro: Warren-Troy-Farmington Hills
What a Home Will Be Worth in 2012: $157,469
Q4 2008 price: $149,000
Projected price change by MSA: +5.7%
Projected price change by state: +2.0%

New York

Metro: New York-White Plains-Wayne (N.Y.-N.J.)
What a Home Will Be Worth in 2012: $343,937
Q4 2008 price: $440,000
Projected price change by MSA: -21.8%
Projected price change by state: -15.6%

Kiplinger

The summary beneath the headline sums up Kiplinger's outlook: "The bleeding is just about over. But don't expect a speedy recovery."

Writes the magazine:

The median home price in the U.S. has plunged nearly 40% in a little over five years, but the worst is definitely over: The market has finally wrung out the last excess valuations born of the housing bubble.

Assuming no further shocks to the economy (no safe assumption, given the fragility of the world economy) U.S. real estate will slowly work its way out of the red, Kiplinger predicts.

Among experts interviewed, Mark Zandi, chief economist at Moody's, says prices will drop no more than 3% to 5% in 2012, "setting the stage for gains in 2013."

FoxBusiness

FoxBusiness interviewed John Lonski, chief economist at Moody's Capital Markets Group, who sounds bullish on housing:

"Financially strong households that have spent money at Tiffany's and on cars are afraid of putting money in housing as they don't want to arrive too early," says Lonski. "But we could be surprised at how vigorously the ensuing upturn of home sales becomes."

Tara-Nicholle Nelson

Inman News columnist Tara-Nicholle Nelson is an attorney and a real-estate agent, giving her a boots-on-the-ground perspective. She predicts:

Prices will recover faster in cities with thriving high-tech industries. Among them: Silicon Valley and the San Francisco Bay Area; Austin, Texas; Massachusetts suburbs of Cambridge, Newton and Framingham; Rochester, N.Y.

"REOs and short sales will become the new normal" as banks continue to foreclose and dispose of the backlog of homes on their hands. "Buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market."

 

A New Year and a Stockpile of Gold.

Well 2012 is now here, and with the price of gold I wish I had my own little stock pile somewhere. Occasionally my wife will converse how only if we had purchased some back in the day. Of course we didn't, hindsight is always so clear and the lack of that crystal ball sorely missed.

I am reprinting an article making some comparison between gold and real estate, you might find it interesting.

Real Estate: Today’s Golden Opportunity

Everyone wants to comment on the current real estate market. They want to talk about how now is not the time to buy a home. Some even argue owning a house has never been a great investment. Most say it will be a long time before real estate again begins to appreciate. It all sounds so familiar to us. It was just a decade ago that many made the same arguments about gold as an investment.

Gold had dropped from over $400 an ounce to $250 an ounce (a 40% decline) from February 1996 to August 1999. People ran from gold as though it was a plague.

Lord William Rees-Mogg, the current Chairman of The Zurich Club, in 1997 said:

“No investment has been so thoroughly exploded as gold; most people think that there will no more be another gold boom than there will be another boom in tulip futures in The Netherlands.”

Two years later in 1999, Don Wolanchuk author of the Wolanchuk Report explained:

“Everybody hates gold. You can’t have a bottom until everybody is out. And everybody is out of the gold sector.”

Everyone knows what happened next. The proclamation of gold’s death was rather premature. Gold rose from $250 an ounce to over $1,500 an ounce in the next twelve years. We see the same situation with real estate today. We are not predicting that real estate will see the same levels of appreciation. I do believe however that the market will rebound strongly.

Those who continued to believe in gold as an investment were rewarded. Those who continue to believe in real estate as a sound investment will also be rewarded.

Here is what Adam Hamilton wrote in October 2000 in an essay titled Is Gold Dead?

The road for gold investors has been long and parched in the last five years.  They have wandered through a seemingly endless desert, occasionally tempted by what proves to be an illusory mirage.  Many have fallen beside the sun-cracked path, their white bones picked clean by buzzards and gleaming in the sun.  Nevertheless, a brave contrarian core continues to march forward.  They have studied history, currency, gold, investments, economics, and finance.  They understand the timeless value of gold, the cyclical nature of the markets, and the vagaries of human psychology.  They realize it is darkest before the dawn, and the journey most difficult right before the homestretch is reached.  Gold is in an INCREDIBLE position, and it will have its day.  Nothing goes up in price forever, and nothing goes down in price forever.  Investments are cyclical.  Gold is NOT dead, it is simply biding its time, waiting for its next earth-shattering mega-rally.  The spoils that go to the few remaining gold investors when that day inevitably arrives will be fantastic.  The stunning victory will quickly blot out the painful memories of the long struggle…

You could replace the word ‘gold’ with the words ‘real estate’ throughout this essay and it would apply today.

By the way, when I checked Friday gold was above $1550 per ounce!