New Listings

I occasionally post new listings here, I have had several in past couple weeks, of which many have already sold. So I have been busy and have not had time to post them here. But here a few of the latest from the last couple of days. As of this posting, these are still available.

Columbia Village, 2 Bed, 2 Bath priced at $147,000

Boise's Northend,  3 Bedroom, 2.5 Bath, 2185 Square Feet, Price $479,900

Boise's Northend, New Construction, Price $442,000, 1967 Sq. Ft, 3 Bd, 2.5 Bath

HUGE home in Eagle on 1 Acre, 7743 Square feet, 7 Bedrooms, 6 Bths, Price $929,000

View Home in Quail Ridge, 2504 Sq. Ft., $399,000 4 Bed, 3 Baths

You can see more details on any of these on my website lowesflatfee.com or contact me.

Three Questions to Ask Yourself Before Buying a Home

Excellent questions for a potential home buyer to ask themselves.  (From KCM Blog) If you are debating purchasing a home right now, you are surely getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home. There are 3 questions you should ask before purchasing in today’s market: 1. Why am I buying a home in the first place? This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money: A good place to raise children and for them to get a good education A place where you and your family feel safe More space for you and your family Control of the space What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not. 2. Where are home values headed? When looking at future housing values, Home Price Expectation Survey provides a fair assessment. Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. Here is what the experts projected in the latest survey: Home values will appreciate by 4.4% in 2015. The cumulative appreciation will be 19.3% by 2019. Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 11.7% by 2019. 3. Where are mortgage interest rates headed? A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates. The Mortgage Bankers Association (MBA), the National Association of Realtors and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months. Bottom Line Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.

 

Home Ownership Can Be A Good Investment

The following article is by Mark Daly, managing director and investment officer, Daly & Vacek Investment Consulting Group. From the Idaho Statesman's Business Insider April 2015.

Read on for a great overview of the importance of home ownership in connection with the other investment options.

"Our investment consulting practice allows us the privilege of rendering advice beyond the traditional realm of stocks and bonds, mutual funds, retirement and education planning, and regular saving and investing. That includes ownership in productive real estate, and for most people starting out, that means a home.

The home offers a good chance for price appreciation. A balance between liquid assets like equities, fixed income securities and cash can complement less-liquid assets like a primary residence, business or commercial property.

My daughter and her fiance plan to marry this fall, and the topic of future home ownership has come up recently. The couple participates in a 401(k) plan at work, and both contribute enough to receive the employer matching contribution. Their next investment, in addition to after-tax savings, could be a home. From a planning perspective, we balance the expense of home ownership with other goals such as education funding, retirement, travel and ongoing cash needs.

First and foremost, a strategy to own the home outright, with a zero mortgage balance at retirement, is essential.

The planning process is the starting point for balancing multiple financial goals by illustrating the tradeoffs and demands on a finite amount of after-tax cash flow. The ability to prioritize and set realistic expectations about what is possible is a critical element of planning. Retire early or accept normal retirement age? Send kids to a private university or state school? Fund annual vacations or accept less frequent holiday travel?

When contemplating the purchase of a home, financial responsibility must be considered. This would include the ability to pay off not only mortgage interest and principal but also property taxes and homeowners insurance.

Ongoing maintenance and repairs will be required to keep the property in top condition, maintain value and allow possible resale. Selling does not always occur at the ideal time, especially when market conditions are depressed. Renting can make more sense if the job market is unstable or if relocation will be needed to obtain employment or remain employed. Various calculators are available to compare the cost of owning versus renting, and these should be used before making a decision.

Home ownership, loan qualifications and borrowing standards have changed dramatically since the credit crisis of 2008. Mortgage rates are low by historical measure, and down payments in the low-single-digit percentages are common. But even low interest rates compound over time, adding to the total cost of owning and buying a home. Record foreclosures after 2008 remind us that debt and leverage should be used wisely when economic conditions turn down.

The American dream remains the possibility of home ownership. Young people with wage income and clean credit history are qualifying like never before. Our advice is to take your time, plan carefully, consider the risk, don’t over-borrow, and be patient when considering this important financial decision."

 

Days on Market

Housing Market is Healthiest in Years!

According to Nationwide’s recently unveiled, Health of Housing Market (HoHM) Report, the US housing market is at it’s healthiest levels since the index’s creation in 2001. The index analyzes the health of the housing market across the country and in 373 metro areas every quarter. Using the data that they have collected over the past 15 years, Nationwide will look to give a “data-driven view of the near-term performance of housing markets based upon current health indicators.” The fourth quarter of 2014 ended with the highest indicator score in over 15 years of data analyzed by the study at 109.8. The report explains:

“An index value over 100 suggests that the national housing market is healthy, with lower chances of a housing downturn over the next year as the index moves increasingly above the 100 breakeven value.”

Employment, demographics, the mortgage market, and housing prices are all used to evaluate the health of each market. The top 10 healthiest housing markets according to the index are:

1. Pittsburgh, PA


2. Cleveland-Elyria, OH


3. Philadelphia, PA


4. Rockford, Ill.


5. Burlington, NC


6. Scranton-Wilkes-Barre, PA


7. Fayetteville-Springdale, AK-MO


8. Idaho Falls, ID


9. Tulsa, OK


10. Kennewick-Richland, WA

The two ‘least healthy’ markets were Bismark, ND and Atlantic City, NJ who received “just slightly negative performance rankings”. David Berson, Nationwide’s Chief Economist and Senior Vice President, says “the quarterly report should serve as a resource to gauge how healthy housing markets are today but, perhaps more important, what to expect in the future and why.”

From the KCM Blog

I was unable to find the Boise-Nampa MSA's actual ranking but it is in the positive range. I found it interesting that Idaho Falls was ranked 8th in the nation. (And with all we have been hearing about North Dakota, that Bismarck took a dive.)

 

 

Pending Sales Surge: Great Sign for the Housing Market

Timely article for our area as well, I know my pending numbers have jumped.

Roger

From the KCM Blog

Posted: 07 Apr 2015 04:00 AM PDT The most recent Pending Homes Sales Index from the National Association of Realtors revealed that homes going into contract in February increased to their highest level since June 2013. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. The Index is now 12.0 percent above February 2014. The index is at its highest level since June 2013, has increased year-over-year for six consecutive months and is above what is considered “the average level of activity” – for the 10th consecutive month. Here is a graph showing the Pending Sales numbers:  Here is a chart showing the Pending Sales increases by region: Bottom Line In an article from Investors’ Business Daily, Lawrence Yun, Chief Economist at the National Association of Realtors, explained what these numbers will mean to the overall market: "It looks like the buyers want to come out to the market and they are eager to find the right home and make an offer. Therefore, I expect the second quarter of this year to be easily ahead of last year in terms of sales activity. Pending contracts are implying that the closing activity in coming months will be quite solid."

 

Treasure Valley Foreclosure Rate-Lowest since 07!

Foreclosure rates in Treasure Valley dipped to .63 percent in January, the lowest rates since October 2007, according to real estate data provider CoreLogic. Idaho overall is showing a rate of .8% in January which is a .6% decline from a year ago, and well below the national rate of 1.4%.

The Treasure Valley, Idaho and the rest of the nation continue to grow our way out of the real estate recession!

Selling Your House? Price it Right Up Front

I have found this to be a very true assessment regarding pricing! I can help you, give me a call.

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes. John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house. Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it! A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house. Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

 

Ada County February Housing Snapshot

 



Single-family home sales in February 2015 were 507 in Ada County, an increase of 10.41% compared to February 2014.

Days on Market were 67, that is slightly down from 70 days last month.

New homes sold in February totaled 109; up 8.12% from last year.

Existing home sales were 398; up 11.11% from 2014.

February median home price was $224,900 with a 9.86% increase over 2014.

With continued increase over last year, Existing home price was $196,750 with 11.25% change.New home median price was $305,000 with a slight decrease of -1.45% from last year.

We had a very slight increase with months of inventory available 3.8 months of inventory. As we head toward spring and summer, we could use an increase in inventory.

February is typically our weakest month for median home price. February 2015 was pretty strong.  This should continue into the Summer.

Bottom line…it’s going to be a complicated first quarter for real estate.

 

Location, Location, Location

 

A recent Demand Institute reportrevealed “nearly half of all American households plan to move at some point in the future.” Seventy-five percent of those surveyed in the report cited one or more ‘location-related reasons’ for their eagerness to move. Here are the top 5 reasons:

1. Safer Neighborhood – 30%


2. Closer to Family – 27%


3. Change of Climate – 26%


4. Closer to Work – 25%


5. For a New Job – 23%

While the majority of Americans (74%) will move within their home state, for the 26% planning to call a new state home, it is important to know that prices in each state are appreciating at different rates and waiting to buy or sell your home could cost you more in the long run. The map below was created using the FHFA’s latest Home Price Index and shows year-over-year price gains in each state. 

Bottom Line

If your plan for 2015 includes relocating to a new state, meet with a local real estate professional in that area who can help you find the best fit for you and your family’s needs.

 

Is Another Bubble Forming?

After the housing market bust we experienced across the country in 2008, many experts have been quick to warn that a new bubble may be forming in some areas. One particular example of this is a recent article pointing toward the California Bay Area’s price gains over the last 18 months. The quickest and easiest way to show how far we’ve come and how far we still need to go in regards to the ‘Peak’ is to share CoreLogic’s Price & Time Since Peak figures, used to create the map below.

 



Even with the high performance of prices in the Bay Area, the state of California as a whole is still -14.4% below their Peak, experienced in May of 2006. The biggest challenge facing the housing market’s recovery right now is the lack of inventory available for sale. Prices are determined by supply and demand. Right now buyer demand is out-pacing seller supply, across many price ranges, driving prices up.

Bottom Line

Traditionally the Spring months have been the most popular dates sellers choose to list their homes. With additional inventory coming to market soon, meet with a professional in your local market to evaluate your best course of action.

Kuna Area Farm-Nice Home on 40 Acres+

Just listed in the Kuna Area, just over the Canyon County line. Custom 2834 square foot, single level home with 3 bedrooms and 3 baths. The current owner has been leasing the farm ground which covers both the property taxes and irrigation costs. There is also an administrative split available from the county if this is too much ground for you. (Subject to confirmation from Canyon County.) Priced at $720,000, contact me for more information or a showing.

Home Price Index - National Overview

New Listing in Nampa's Dallan Woods

I have always liked the feel of the Dallan Woods subdivision in Nampa. With it's custom homes, center park with pool and the entry and bordering landscaping. I have a new listing that will be coming on very soon, just waiting for some landscaping and a key issue to be resolved.

This home features custom upgrades through-out, solid hickory wood floors, hickory custom cabinets, tile showers (no inserts), stone fireplace, oil rubbed bronze fixtures, 3 cm solid granite in kitchen AND the baths and utility!

Priced at $190,000, with 3 bedrooms, 2 baths and 1675 square feet, beat the rush and call me today!

Homeownership is the "American Dream" for a Reason

There have been some who have voiced doubt as to whether or not the younger generations still consider buying a home as being part of the “American Dream”. A recent study by Merrill Lynch puts that doubt to rest. According to their research, every living generation still maintains that owning a home is in fact important. Here are the numbers: This should not surprise us as many studies have revealed the benefits enjoyed by the families who own their own home. One such study was done by the Joint Center of Housing Studies at Harvard University that addressed a major financial benefit to owning your own home: forced savings. The report explains:

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

The Merrill Lynch study proves this point with the following data on home equity (a form of savings):

Bottom Line

There are many reasons that owning a home makes sense. The financial reasons are powerful. As one participant in the Merrill Lynch study put it:

“When I was younger, I always worried about that monthly mortgage payment. Now that I am retired, I have the peace of mind of knowing I own my home free and clear.”

 

Housing Market to Spring Forward

 



Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward”! Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market. Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right. Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

That hasn’t happened this year.

Demand for housing has remained strong and is currently three times stronger than last year at this time. The National Association of REALTORS (NAR) recently reported that the top 10 dates sellers listed their homes in 2014 all fell in April, May or June. Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

Bottom Line

If you are planning on selling your home in 2015,  call me to evaluate the opportunities in your market.

 

REAL ESTATE HEADING IN THE RIGHT DIRECTION

The housing market has taken a great turn toward recovery over the last few years. The opinions of the American public toward real estate took longer to recover, until recently. For the first time since 2006, Americans have an overall positive view of real estate, giving the industry a 12% positive ranking in a Gallup poll. Americans were asked to rate 24 different business sectors and industries on a five-point scale ranging from "very positive" to "very negative." The poll was first conducted in 2001, and has been used as an indicator of “Americans’ overall attitudes toward each industry”.



Americans’ view of the real estate industry worsened from 2003 to the -40% plummet of 2008.  Gallup offers some insight into the reason for decline:

Prices Dropped

“In late 2006, real estate prices in the U.S. began falling rapidly, and continued to drop. Many homeowners saw their home values plummet, likely contributing to real estate's image taking a hard hit.”

Housing Bubble

“The large drops in the positive images of banking and real estate in 2008 and 2009 reflect both industries' close ties to the recession, which was precipitated in large part because of the mortgage-related housing bubble.”

Bottom Line

“Although the image of real estate remains below the average of 24 industries Gallup has tracked, the sharp recovery from previous extreme low points suggests it is heading in the right direction.”

Should I Wait Until Spring to Sell?

Traditionally the thought process is to wait until spring to sell a home. The thinking is there are more buyers which will result in higher prices. The often overlooked part of that equation is that there are more homes for sale as well.

I do not know what spring 2015 will bring, (my darn crystal ball is on the fritz again.) But I do know that my recent listings have sold quickly, there are buyers looking NOW. So it might be worth selling now instead of waiting. My last 3 listings have all received and accepted offer within one week.

The Difference Between a Home's Cost vs. Price

This is a similar theme to what I have posted many times in the past, but it is worth repeating.





As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen in 2015?

A nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015. Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Existing Home Sales & Prices

To Stage or not to Stage?

Home Staging Can Help Sell Home for More, Realtors® Say

WASHINGTON (January 27, 2015) – Most homeowners know it is important to keep a home clean, bright and free from clutter while it is on the market for sale. But sometimes, Realtors^® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the National Association of Realtors^® 2015 Profile of Home Staging.

“Realtors^® know how important it is to have a home in the best shape possible when showing it to prospective buyers,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Arkansas. “At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues. Another option is staging a home, which Realtors^® often suggest to sellers to help prospective buyers better visualize themselves in the home and could modestly increase the home’s value for both the buyer and seller.”

The report, the first of its kind from NAR, found that 49 percent of surveyed Realtors^® who work with buyers believe staging usually has an effect on the buyer’s view of the home. Another 47 percent believe that staging only sometimes has an impact on a buyer’s view of the home only. Only 4 percent of Realtors^® said staging has no impact on buyer perceptions.

Realtors^® on the buyer side believe that staging makes an impact in several ways; 81 percent said staging helps buyers visualize the property as a future home, while 46 percent said it makes prospective buyers more willing to walk through a home they saw online. Forty-five percent said a home decorated to a buyer’s tastes positively impacts its value; however, 10 percent of Realtors^® said a home decorated against a buyer’s tastes could negatively impact the home’s value.

From the seller side, a majority of Realtors^® utilize staging as a tool in at least some instances. Just over a third of Realtors^® (34 percent) utilize staging on all homes, while 13 percent tend to stage only those homes difficult to sell, and another 4 percent will do so only for higher priced homes. The median cost spent on staging a home is $675. Sixty-two percent of Realtors^® representing sellers say they offer home staging service to sellers, while 39 percent say the seller pays before listing the home.

Realtors^® representing both the buyer and seller agreed on two major points in the report—which rooms should be staged and the change in dollar value a buyer is willing to offer for a staged home compared to a similar not-staged home. Realtors^® ranked the living room as the number one room to stage, followed by a kitchen. Rounding out the top five rooms were the master bedroom, dining room and the bathroom.

Realtors^® believe that buyers most often offer a 1 to 5 percent increase on the value of a staged home (37 percent from Realtors^® representing sellers and 32 percent from Realtors^® representing buyers). Additionally, 22 percent of Realtors^® representing sellers and 16 percent of Realtors^®representing buyers said the increase is closer to 6 to 10 percent.

“Working with a Realtor^® gives buyers, sellers and investors the advantage they need to succeed in today’s market, as they know what buyers want and how to best market and stage a home for sale,” Polychron said. “While many factors play into what a home is worth and what buyers are willing to pay for it, staging is an excellent tool that can be used to give a home a little extra push for sellers. Staging isn’t used by every Realtor^® in every situation, but the impact it may have and the value it can bring is clear to both home buyers and sellers.”

The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

 

WHY HAVE INTEREST RATES DROPPED?

Why Have Interest Rates Dropped?  Posted: 27 Jan 2015 04:00 AM PST The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream home, might think that they should wait to buy, because rates may continue to fall. A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the crude oil price. “As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.” You may have noticed that filling your gas tank has become substantially less expensive in recent months. A welcome change from the close to $5 a gallon that many Americans were paying this time last year. The average US household is projected to save around $550 in 2015. So what does that have to do with Interest Rates? NAR explains the correlation like this: “Lower oil prices mean lower inflation rate, which pushes down mortgage rates.” Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%. “The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.” How long will rates stay low? No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen. “If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.” Don’t wait too long The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015. Bottom Line NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.” If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.

 

Idaho in Top 10 States for Inbound Moves in 2014

Since 1977, United Van Lines has tracked state-by-state household migration patterns annually in 48 states and Washington, D.C. Basing their research findings on the household moves their company facilitates, United identifies which states have the highest inbound moves and the highest outbound moves each year.

In their 2014 survey, United determined that Idaho ranked number 10 in the states with the most inbound moves. The states that ranked higher than Idaho, number 1 to number 9, were Oregon, South Carolina, North Carolina, Vermont, Florida, Nevada, Texas, District of Columbia, and Oklahoma.

Michael Stoll, chair of the University of California Department of Public Policy, economist and professor stated, “With economic stability growing nationally, the current migration patterns reflect longer-term trends of movement to the southern and western states, especially those where housing costs are relatively lower, climates are more temperate and job growth has been at or above the national average, among other factors.”

 

New Fannie Mae Appraisal Program: Helping or Hurting?

I found this information to be a bit concerning. I certainly do not want to go back to the free wheeling days that led to our housing crash, but this seems like overkill.

Every home must be sold TWICE! Once to the buyer, and once to the bank appraiser if a mortgage is involved.

The second sale may have just become more difficult.

A new program announced by Fannie Mae may slow down the home-sale closing process by causing more disputes over prices between sellers and buyers. In a recent Washington Post article they explained the basics of the program:

“Starting Jan. 26, Fannie plans to offer mortgage lenders access to proprietary home valuation databases that they can use to assess the accuracy and risks posed by the reports submitted by appraisers.” “The Fannie data will flag possible errors in the appraiser’s work before the lender commits to fund the loan, will score the appraisal for overall risk of inaccuracy and may provide as many as 20 alternative “comps” — properties in the area that have sold recently and are roughly comparable to the house the lender is considering for financing but were not used by the appraiser.”

Using the additional information provided by Fannie Mae, the lender can then ask for an explanation from the appraisal company for any discrepancies and request an amended appraisal. This added step in the process of determining the price of the home to be bought/sold, could add time to the closing process and cost to the appraisal for the additional work.

Why is this happening?

Fannie Mae wants lenders to make informed decisions when agreeing to the amount of a loan that a buyer will be approved for.

“Excessive valuations create the risk of future losses to lenders and investors if the borrower defaults and the house goes to foreclosure.”

What is the process now?

As a seller:

You’ve put your house on the market, picked an agent who has helped you determine that the best price to list your home for is $250,000, and found a buyer willing to pay that price. The appraiser comes to the home and agrees your home is worth the asking price and writes their report. Everything is working perfectly!

As a buyer:

You’ve found your dream home, in the right neighborhood, in the right school district, with the perfect yard, at the high end of your budget, but all the pluses are worth it. You agree on a price and start daydreaming about living in your new home.

What happens after January 26th?

The lender submits the appraisal report to the new Fannie Mae program and they come back with “lower-risk comps” that value the home at $230,000. The lender then turns to the appraisal company to justify the $20,000 difference, adding time and frustration to the process. If the lender does not agree with the reasons for the price difference they will not lend the buyer the amount they need to purchase their dream home and the amicable, agreeable sale turns into a heated justification of the higher price. The buyer may even have to give up on the home if the funding isn’t there. An article by Housing Wire shares the appraiser’s point of view:

“The bottom line, appraisers say, is this could lead to delays to closings and higher costs, as well as a depression of prices in markets where prices are rising. Appraisers complain that if they have to justify every step of their comps for their valuation, rather than those coming from the one-size-fits-all evaluation from Fannie, it will delay closing, throw off buyer and seller timetables, and delay real estate broker commissions.”

Bottom Line

The fear of some real estate practitioners is that if appraisers feel as though they are constantly being second-guessed, they may become more conservative in their assessments, impacting home values and slowing growth in the market.

 

December Market Report – That Sure Was Fun

December Market Report – That Sure Was Fun by marclebowitz

January 12, 2015, 2015

by Marc Lebowitz · Leave a Comment

Single family home sales in December 2014 were 597 in Ada County, an increase of 3.5% compared to December 2013.  YTD total sales are down 2.5% compared to this time last year; 7,764 homes sold compared to 7,7,964.

Total dollar volume for December was $154M (up 8% over December 2013). Year-to-date dollar volume is $1.91B compared to $1.85B in 2013.

Consistent with the rest of 2014, sales of homes in December priced above $160,000 showed increases in every price category.

Average Days on Market in December were 66; nine more days than last month. In December 2013, Days on Market was 59.

New homes sold in December totaled 129; down 5% from last year.

Existing home sales were 468; up 6% from December 2013.

Historically December sales decrease from November levels by an average of 2%.   This year there was an increase of 11%.

Pending sales at the end of December were 712; up 4% compared to December 2013. Pending sales are our best “forward looking” indicator. December 2014 is the first month all year to have an increase in year-over-year “Pending Sales”….talk about a home run in the bottom of the ninth inning!

December median home price was $214,000; up 8% from December 2013. Our YTD median price is $210,000; up 6% over last year.

New Homes median price for December was $301,850; up 8% from December 2013. For Existing homes the increase is 6% to $194,600.

The number of houses available for sale at the end of December decreased 25% from November 2014 to 1,947. This is down slightly to last year.

As is typical this time of year, inventory contracted in all price categories for December.

Consistent what we’ve been observing regarding inventory, homes in the $120,000 – $160,000 shrank more than any other price point.

In Ada County we now have 3.5 months of inventory on hand, essentially unchanged from the end of July.

The price categories in shortest supply are $100,000 to $119,000 which has 1.3 months; and $120,000 – $159,000 which has 1.8 months.

From $200,000 to $400,000 we have 4 months available.

Of sales in December, the two strongest price points were $120,000 to $160,000; up 17% from November and $160,000 to $200,000; up 12%.

In the end, sales fell a little short of what we expected. We’re seeing the same picture nationwide. Because of the solid median price appreciation, dollar volume will be well ahead of last year.

 

Migrating out of the Basement

Kids moving out on their own is leading to more economic growth!

Good news for moms and dads! Now, Goldman Sachs reports in a circular for clients that while it’s still elevated, the number of twenty-somethings living at home seems to be on the decline!



With more millennials spreading their wings, the rental market is continuing to thrive. Occupancy and rent growth have been at their highest levels since the turn of the 21st century.

 

 

Existing Home Sales Report

Starting 2015 with a Bang!

Oftentimes sellers like to wait until spring to sell with better weather, nicer looking lawns and a perceived a better time to sell. I have posted here previously (November 12, 2014) statistics that show homes sell a week faster along with a higher percentage of selling.

A couple of personal stories to illustrate that point. I listed a horse property about a week ago north of Middleton, and it is now pending as of Saturday. Less than a week on the market! (Full price by the way.)

On a different property I received two offers in the last two days! This home has been lifted a couple of months but now two offers in January.  Moral of this story, there are buyers looking, today.

And remember you can always pay more to sell your home, but why would you want to? Call me, Roger, at Lowes Flat Fee Realty when you are ready to sell. 208-602-0055

FHA to LOWER Insurance Premiums!

In a major development, the FHA announced it would reduce the annual mortgage insurance premium it charges on new FHA loans from 1.35% to 0.85%. This change, to be implemented near the end of January, in effect will lower mortgage payments on FHA loans the same as a 0.50% reduction in rates. Lower rates have made home ownership more affordable, and this change reduces the cost of ownership even more. The reduction will benefit many people, particularly first-time home buyers, due to the low down payments and relaxed credit standards associated with FHA loans.

 

On a $200,000 house, here’s what it will look like:

OLD monthly MI - $220.92/month

NEW monthly MI - $139.10/month!!!!!

A SAVINGS OF $81.82/MONTH!!!

 

Horse Property-New Listing

Just listed this nice horse set-up, located north of Middleton with 2.99 acres. Complete with 4 stall horse barn, dry pen, auto-frost free waterers, large arena. House has been completed updated, if you are looking for horse property-come take a look!

The Barn



Priced at $269,000 Give me a call for more information. MLS#98574769

#1 Reason to Sell Now!

If you are one of the many homeowners out there who are debating putting their home on the market in 2015, don’t miss out on the opportunity that currently exists. There will be significantly less competition in the winter months than in the spring. According to the National Housing Survey released by Fannie Mae, 45% of homeowners “say mortgage rates will go up in the next 12 months.” What Does This Mean? Homeowners are unaware that interest rates are projected to go up by all four major reporting institutions – This is big news for move-up buyers reflecting the overall amount of housing inventory that will be on the market. If existing homeowners believe that mortgage interest rates are not going to increase, then they won’t be inclined to make a move by putting their home up for sale, meaning less competition for sellers who list now. Don’t Wait! The study also revealed that: “Those who say it is a good time to buy a house rose to 68%” & “the share of respondents who think it would be difficult to get a home mortgage today decreased by 3 percentage points.” As Doug Duncan, senior vice president and chief economist at Fannie Mae explains: “We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects.“ Bottom Line There are buyers out there who are ready to make a move. If your goal this year is to move up to your dream home, what are you waiting for?