Wednesday, September 26, 2012

Boise, Great Place to Raise a Family!

Did you see the latest ranking from Forbes magazine?  Boise was ranked 2nd best city in the country to raise a family. (Of the 100 largest metro areas)

The lower costs and less crime was mentioned along with BSU's Broncos!
We are listed 64th in cost of living, 44th in housing affordability, 29th in owning homes, 5th in level of crime and #1 in education.

If you are curious, we are just behind Grand Rapids, Michigan and ahead of Provo, UT.


Tuesday, September 25, 2012

Idaho Sellers-Reasons to Sell Now

I have had people asking me about whether to sell now or try and wait until spring, which traditionally is the best time to sell. No one solution fits everyone but here are some reasons to consider selling now.

We have a large amount of serious buyers still looking to buy, I have had 5 offers on 5 different properties across my desk in the last 3 days.  More serious buyers are looking whereas the looky-loos have moved on to other things.

Our inventory levels are way down, it is easier to attract attention.

There will never be a better time to move up, sure you can wait until you can receive more for your home but then the home you would like to purchase will have increased in price as well. And with these unbelievably low interest rates, strike while you can.

And it may just be the time to move on with your life. Whatever is the reason you have to want to sell, it is often worth more for your family, health or happiness than waiting around for a higher selling price.

Friday, September 21, 2012

5 Reasons to Buy NOW

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices will bounce along the bottom this winter. However, projections call for appreciation after that. Several studies and surveys call for price increases over the next few years starting in 2013. One such surveyshows that prices will increase over 10% by 2016.

Rents Are Skyrocketing

Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%.

Interest Rates Are at Historic Lows

Federal Reserve Chairman Ben Bernanke has kept interest rates low in an effort to stimulate a lethargic economy. He understands that low rates will help housing and housing is a key to bringing back the economy. As the economy approves, the need to keep rates low will no longer exist. The 30-year-mortgage rate before the financial crisis was 6.57% (August 2007).

Buy Low, Sell High

We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’. It’s time to buy.

Thursday, September 20, 2012

Strategic Defaults? Right or Wrong?

I have discussed this issue previously and here is another look.


“A deliberate default by a borrower. As the name implies, a strategic default is done as a financial strategy and not involuntarily. Strategic defaults are commonly employed by mortgage holders of residential and commercial property who have analyzed the costs and benefits of defaulting rather than continuing to make payments and found it more beneficial to default.”

A new foreclosure is created every time a seller voluntarily decides to stop making their mortgage payment. Obviously, an increase in foreclosures puts downward pressure on the values of other homes in the community. We believe there are several reasons this could be another headwind to any recovery in housing.

There Are 11.4 Million Homes in Negative Equity

According to CoreLogic’s most recent Negative Equity Report, there are over 11.4 million homes where the value of the home is less than the value of the mortgage(s) on that home, a situation know as negative equity or being ‘underwater’.

Negative Equity Is the Primary Reason Baby Boomers Default

According to a survey by web site You Walk Away, 68% of baby boomers who walked away from their homes (strategic default) listed ‘property value’ as the main reason. 88% of the defaulters did not access any of their retirement savings before walking away and 97% would advise family members in the same predicament to also default.

The Moral Objection to Not Default is Diminishing

In the past, homeowners felt a moral obligation to repay their debts. That is beginning to change. Dr. Andrew Jennings, chief analytics officer at FICO explains:
“After five years of a brutal housing market, many people now view their homes more objectively and with less sentimentality. Regardless of legal or ethical issues around strategic defaults, lenders must account for this risk when they evaluate mortgage applications in declining markets. Many homeowners who find themselves upside down on mortgages in the future are likely to consider strategic default as an acceptable exit strategy.”

Prices Could Soften Again Over the Next 6 Months

As we reported Monday, many experts feel that prices might falter again before they finally stabilize in 2013. Every time prices fall more homes fall deeper into negative equity. The CoreLogic report mentioned above also states that 2.3 million homes had less than 5 percent equity, referred to as near-negative equity.

We will continue to keep our fingers on the pulse of this issue to monitor whether or not it begins to slow the momentum the housing recovery is currently experiencing.



Wednesday, September 19, 2012

Smootville-What a Hoot!

I was driving out on Locust road south of Lake Lowell looking at a new acre lot subdivision for a client and I came across this animated display called Smootville. It is really quite clever from the dogs tail wagging, one person pumping water and another hoeing the flowers.  I do not know if this is a seasonal display or year around but it is worth a look.

Wednesday, September 12, 2012

Will Our Appreciation Stop? Or Reverse?

I am including an article from KCM blog quoting experts stating that we may see some declines nationally in values in the coming few months as seasonal adjustments. If you read yesterday's article Mr Lebowitz's prediction for Ada County for the rest of the year was single digit sales increase and double digit median price increase. I do not believe we will see any negative price movement in our area. It may slow, but I do not see declines in our near future.

An important item covered in this report that even if some declines are experienced, it is simply a seasonal issue and not a greater "sign of impending doom."

There has been a lot of excitement about home prices over the last few months. Though we agree that the housing industry is in a full out recovery, we also believe that there will still be price volatility over the next several months. We must realize home sales are seasonal and that fact impacts prices.

Lawrence Yun, Chief Economist for National Association of Realtors, explains that the inventory of lower priced homes has been constrained leading to the rise in median home prices:
“Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market.”

Celia Chen, housing analyst at Moody’s Analytics projects that this positive price movement may not be sustained over the next few months as more distressed properties enter the market:
“Housing is about to turn from being a drag on the broader economy to being a driver…House prices will remain the laggard, perhaps dipping a little before hitting a sustained and solid pace of appreciation next year…The distress pipeline casts a shadow over the outlook. Indeed, the CoreLogic price index gained strongly between late 2009 and the second quarter of 2010, when foreclosure moratoriums were in place, before losing nearly all of the gains once the distress share of sales picked up again.”

The RPX Report suggests that price declines in the next few months could erase any gains we have seen this year:
“The gains of the first half of 2012 could be short lived. They were the result of seasonal factors and REO disposition strategies that could reverse in the fall. The unusually rapid price appreciation could give way to equally rapid declines in the second half of the year.”

Calculated Risk probably did the best job of explaining the situation reporting:
“Home price indexes will show month-to-month declines later this year. This should come as no surprise and will not be a sign of impending doom… There is a clear seasonal pattern. In recent years the seasonal pattern has been exaggerated by the large number of foreclosures – foreclosures tend to be fairly steady all year, but conventional sales are stronger in the spring and early summer and weaker in the fall and winter. This leads to more downward pressure from foreclosures in the fall and winter.”

Again, Calculated Risk explains that this “will not be a sign of impending doom”. It is instead the normal seasonality we have seen in home prices over the last several years.



Tuesday, September 11, 2012

Ada County Real Estate Continues Recovery

by Marc Lebowitz, RCE, CAE

Executive Director Ada County Association of REALTORS

Sales in August were 2012 were 706 in Ada County, an increase of 15.14% compared to August 2011.   Year-to-date sales are 4,684; 10.5% over the first eight months of 2011.

Dollar volume for August was up 30.44% to $148Mil. For the year we are at $923Mil.

New homes sold in August increased 57% over new homes sold in August of 2011!!…and are up 65% YTD.

Historically, August sales increase by 3% over July. August 2012 sales increased by 11% over July 2012.

Of our total sales in August… 21% were distressed (148 total sales)….down 3% from July 2012. In August 2011, 44% of our sales were distressed.  In January 56% of distressed properties were REOs and 44% were short sales.  In August the ratio was 67% short sales (99 total sales) and 33% REOs (49 total sales). This is five consecutive months with short sales being the larger percentage of distressed properties sold.

Pending sales at the end of August were 1,113; down 9% from the end of July. In general pending sales in May are the highest of the year; and June the second highest.  The percentage of pending sales in distress increased 1% from July, totaling 27% overall. There has been very little fluctuation in this number since May 2012 when we first went below 30%. A year ago we were averaging close to 50% of pendings in distress; but have decreased steadily since January.  Of Pending sales in distress, short sales outnumbered REO’s 3 to 1.

At the end of August, we had 26% more sales pending than at the end of August 2011.

August median home price was $180,399; up 16% from August 2011. Median home price is up 30% since January of this year and above $150,000 for seven months running.  We continue to outpace our national recovery; according to NAR’s most recent report.

New Homes median price for August was $224,777; down 4% from August 2011.

The number of houses available increased slightly for the fifth consecutive month. At the end of August our total active inventory was 2,170 homes. This is up .5% from July and 12% less than last year at this time.

At the same time, the percentage of distressed active inventory held at 24%. This is the lowest number we’ve seen in several years. We have been hovering between 33% and 36% for the last year. We remain well below the 40% levels set last spring….when we were on the increase.

With an inventory increasing and the percentage of distressed inventory decreasing; median home price will continue to strengthen.

Of our Distressed Inventory 89% is Short Sales (436 homes) and only 11% is REO (57 homes); nearly unchanged from last month.

We didn’t increase available inventory very much.  We added five homes in the $200,000 to $250,000 and eight homes in the $400,000 to $500,000 price ranges…and…we added 6 homes in the $1,000,000+! All other price points had a decreases in available inventory.

The number of available new homes increased in the price ranges of $160,000 to $200,000 by a total of 11 homes.

In Ada County we now have less than 3.3 months of inventory on hand.

The price category in shortest supply is <$119,000 with 2.6 months. In the range of $120,000 to $159,999 we have 2.4 months. All price points up to $400,000 have less than 4 month’s supply. We have benefited for nearly two years from inventory levels much lower than national average.

Multiple offers are much more prevalent; now becoming the norm.

Based on August sold data, our most desirable price point is $120,000 to $160,000 which was 25% of total sales. The next largest price point sold is $160,000 to $200,000 at 19.7% of all sales.

I’m still going to stick with my conservative forecast for the rest of the year; single digit sales increase and double digit median price increase.


Saturday, September 8, 2012

Short Sales vs Foreclosures

A timely post from KCM Blog

For months now, we have been letting everyone know that banks were going to begin shifting their focus when liquidating distressed properties. They would start supporting short sales over foreclosures. There is no longer any doubt this is now the new normal.

In a recent news release, the FHFA announced new guidelines to streamline the short sale process.

FHFA Acting Director Edward J. DeMarco on the new guidelines:

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities.”

You can see the new guidelines here.

In a DSNews article, both Fannie Mae and Freddie Mac reaffirmed their desire to proceed with short sales rather than foreclosures.

Leslie Peeler, SVP, National Servicing Organization, Fannie Mae:

“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities. We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us.”

Tracy Mooney, SVP Single-Family Servicing & REO at Freddie Mac:

“These changes will make it clear that Freddie Mac servicers have the authority to approve short sales for more borrowers facing the most frequently seen hardships. These changes will further empower the industry to minimize foreclosures and help Freddie Mac in its mission to minimize credit losses and fortify a national housing recovery.”


Friday, September 7, 2012

Pending Sales Trend UP!

Last week the National Association of Realtors (NAR) released their Pending Home Sales Index, The Index, a forward-looking indicator based on contract signings (not closings), rose 2.4 percent to 101.7 in July up 12.4 percent above July last year. The index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. Lawrence Yun , NAR chief economist, said:
“While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity.”

This preceded NAR’s Existing Home Sales Report which showed closed sales were up 10.4% over last year. Prices were also up 9.4% year over year. NAR expects existing home sales to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.

And even though new construction sales showed a 25% increase over last year, Yun explained that should not dramatically impact prices:
“Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand.”

Housing is in the middle of a recovery without a doubt.


Thursday, September 6, 2012

Buyer Pet Peeves When Touring Homes

I just noticed this article and it makes good points in my mind as I have experienced each of them when showing buyer's homes.

3 Buyer Pet Peeves When Touring Homes


What makes home buyers grimace when they tour a home for-sale? Don’t let one of your listings fall prey to one of these common buyer pet peeves. A recent article at Zillow highlights some of the following turn-offs:

  • Pets: Dirty kitty litter boxes or dog toys scattered in a room can turn off buyers who associate pets with unsanitary homes. Remove all traces of pets in a home and pay attention to the home’s smell; get rid of any lingering pet odors when homes are for sale.

  • Kid items: Don’t let the kids overtake a home with toys cluttering every square inch. Also, pay attention to any sanitary or personal items involving infants. For example, “leaving breast milk, a breast pump, or dirty baby bottles on the kitchen counter could make a buyer feel that the home isn’t clean or sanitary,” according to the Zillow article.

  • Personal items: Watch the cleanliness of the bathroom and what’s left out: For example, make sure toothpaste residue isn’t left in the sink or prescription medications are left out in the open. “Buyers want to feel clean in the bathroom ... they don’t need to be reminded that they will be taking over a ‘used’ bathroom,” according to the Zillow article.


Wednesday, September 5, 2012

Movers Holding Owner's Hostage

Movers Hold Home Owners’ Items Hostage?


Federal lawmakers are cracking down on moving companies who try to hold home owners’ belongings hostage during a move — a scam that's more common than many realize.

Home owners will soon have more protection against this increasingly reported rip-off in the moving industry. It usually involves a moving company providing a home owner with a lowball quote for a move. The mover then packs up the home owner’s belongings onto a truck and refuses to unload it until a higher fee is paid.

"If you hire a mover to transport your goods across state lines and they hold your personal property hostage, you can appeal to the Department of Transportation and it now has the power to enforce fines," Ada Vassilovski, vice president of online marketing and product management for Imagitas, told the Pittsburgh Post-Gazette.

Starting in October, movers who hold home owners’ items hostage can be fined by up to $10,000 a day, according to new rules imposed by the Federal Motor Carrier Safety Administration, an agency of the Department of Transportation. Starting in October 2014, moving company owners will be mandated to pass tests on consumer protection and moving-cost estimates, The Pittsburgh Post-Gazette reports.

"We are finally seeing recognition that movers holding people's possessions hostage is a problem," Vassilovski says. "I don't think many people are aware of this being a problem, so it's great this legislation is shining a light on it."


Tuesday, September 4, 2012

Looking on Craigslist-BEWARE

I have received calls from a couple of different folks on two different homes, one in Boise and the other in Rexburg, that I have listed. And they found these homes for rent on Craigslist for super cheap and, of course, the person renting the home is out of the country and will need money sent to them.  Neither house was for rent and it was a complete scam.

I am posting an article that tells more about this common scam.

craigslist scamWith a burgeoning "sharing economy" and the growing amount of trust in peer-to-peer marketplaces like Craigslist, consumers have become increasingly comfortable with online transactions. These days, it's no exaggeration to say that people are willing to look for almost anything online. Whether it's finding a roommate, avacation home, a life partner or a rental apartment, this "Craigslist culture" offers no-cost or low-cost services that are quick and, most importantly, convenient.

But experts warn that convenience can sometimes come at an unexpectedly high price, particularly for those who turn to free classified sites like Craigslist for real estate-related transactions. Despite the media spotlight on the dangers of Craigslist in recent years, it appears that online rental scammers are still out in full force, preying on unsuspecting renters and landlords alike.

Just this January, a couple from Lynchburg, Va., were scammed out of $1,000 and confronted by the police because of a fake rental listing they'd responded to on Craigslist.

Richard and Faith Shive (pictured left) thought they'd found a beautiful vacant home and planned to rent it from the listing's author. The landlord claimed in the ad that he was away on a humanitarian "mission," and needed to rent the property in the interim. Convinced the story was true, the Shives wired a requested $1,000 fee to the renter, received the keys, and then moved into the empty house.

Two days later, police officers showed up at the Shives' "new home," demanding that they leave. It turns out that, while the home was legitimately listed for rent on the market, the unscrupulous party that advertised the rental on Craigslist was not the rightful landlord. The police informed the couple that the scammer had broken into the home and posed as the rightful owner only to make off with their deposit.

"They just made it sound believable," Faith told CBN News. "I didn't suspect anything."

And it's not just renters getting swindled -- landlords appear at risk, too. In another recent incident, Georgia resident Robert Fulton claimed that he got scammed out of $2,200 by a pair of prospective renters after he'd posted an ad on Craigslist to lease out his empty basement.

The pair reportedly sent him a $3,500 check as an advance on the rent, then asked him for a favor. Fulton claims that they requested he send the $2,200 they had "overpaid" him to an acquaintance of theirs to help "cover moving expenses." Though Fulton says that he had his suspicions, he went through with the transaction as the first check appeared to have cleared.

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But it hadn't.

"A couple weeks later I got an email from the bank saying the check was no good," Fulton told WSB-TV. He told the television station that after he'd called the scammers about their ploy, they propositioned him to join them in making counterfeit checks, just like the one they'd allegedly used to rip him off in the first place.

"They said, 'Why don't you get involved with us and you can make some money? You can make all your money back,' " Fulton said.

But experts are skeptical that such duped consumers will ever see that money again.

An Online Money Trap

"Unfortunately, it's not likely Fulton will get his $2,200 back," Janet Hart from the Better Business Bureau told AOL Real Estate. "It's probably in another country and he doesn't even know about it. Wire transfers are irretrievable."

Hart, an expert on consumer fraud, reveals that sadly, Craigslist real estate scams are still happening very frequently. Cashing in on fake advance rent checks, like in Fulton's case, is one of the "most popular" Craigslist scams, she says, along with selling and renting "fake" homes. (That's advertising unlisted homes for bargain prices to out-of-town buyers who cannot physically check on the home, and then asking for a "holding fee" to be wire-transferred to an account, like in the Shives' case.)

How to Protect Yourself

Hart warns consumers that diligence is key. You can help safeguard yourself from these scams by avoiding any wire transfers, unless it is to or from a large and reputable organization. Also, if someone's offering you a lot more money than you're asking for in a simple real estate transaction, just don't take it.

"If it sounds too good to be true, it probably is," Hart advises.

AOL Daily Finance also advises that if you are renting a place online and cannot physically see the place for any reason, at the very least you should Google the home's address and do some online research on the property before forking over any money. If the home shows up as a "for sale" home, there could be a problem.

"You can never be too careful," Hart adds. "Ask around and do your research before any online transaction, especially with things involving a lot of money like houses and cars."