Monday, November 26, 2012

A Segment in the Boise Real Estate Market is Disappearing.

Here is a great article reprinted from Boise Agent Weekly.

Home Sales are up in all price ranges in Boise (Ada County).  All prices ranges except homes priced below $120,000.  The supply of homes priced under $120,000 is disappearing, which has lead to a sharp decrease in sales in this price range.


If you are hoping to buy a home price near $100K or below, better start getting busy.  Most sales in this price range today are from old short sales started months ago. As of this writing there are only 59 available homes in ADA County priced under $100K (including townhomes and condos). Exactly one year ago there were 266 homes available under $100K.

Ada County homes priced under $100K are relativity a new thing for Boise. This price range was effectively created due to the massive outpouring of foreclosures on the market. Banks often competed with each other to make sure their homes sold which caused a sharp drop in home prices and a large uptick in homes sold under $100,000.

Now that Foreclosures have slowed down, there is no longer the downward pressure on home prices and almost no inventory of homes below $100,000 available anymore, unless a new distressed property comes available.

The lack of home sales below $100,000 is Boise's biggest insurance policy protecting homeowners from further price declines in the area. For home prices to drop significantly in the Boise area again there would need to be another surge in inventory priced below $120,000. If that surge does happen it would be an early warning sign that prices will dip again. Right now the entire county is sitting at record lows for available supply. There are no active threats influencing the Boise housing market except for winter slow downs. Therefore, I am predicting home prices should stay strong into 2013 and stay way above last year's numbers.

Boise Inventory of Homes under 100k.png

Boise Homes Sold under 100k.jpg


Saturday, November 24, 2012

Foreclosures-Discounts or not?

I have noticed in the Ada County market, and somewhat in Canyon county as well that foreclosure sales are not always reflecting the discounted prices from regular sales that has been the norm.  This is due to our low inventory levels. This illustrates that buyers need to check values on homes individually not just assume that foreclosures or short sales are ALWAYS the best deals.  I help buyers find the best values in all types of sales.

I am also reprinting a article speaking of this issue nationally.

Foreclosure Discounts Vanishing

Foreclosure discounts have nearly dried up due to low inventory levels, according to the latest housing reports.

The average discount nationwide for foreclosure properties has fallen to 7.7 percent, according to Zillow research. In some parts of the country, there is no foreclosure discount when compared to other sales.

“The smallest foreclosure discount is found in places where competition for homes is so high, people there are willing to pay the same amount for a foreclosure re-sale that they would for a non-distressed home simply to take advantage of historic affordability,” says Stan Humphries, Zillow’s chief economist.

The smallest foreclosure discounts can be found in:

  • Las Vegas (0%)

  • Phoenix (0%)

  • Sacramento, Calif. (0.7%)

  • Riverside, Calif. (1.8%)

  • San Diego (2.4%)

  • Miami-Ft. Lauderdale (2.9%)

  • Los Angeles (4.2%)

  • San Francisco (4.7%)

Meanwhile, the places with the largest foreclosure discounts are:

  • Pittsburgh, Pa. (27.8%)

  • Cleveland (25.8%)

  • Cincinnati (20.2%)

  • Baltimore (20%)

  • New York City (15.5%)

Source: “Low Inventory Wipes Out Foreclosure Discount,” Examiner.com (Nov. 18, 2012)

Friday, November 23, 2012

Is It Time to Buy A Rental Property?

Yesterday, we discussed rising rents and their impact on the long term housing expense of tenants. Today, we want to look at the opportunities that single-family rental units present for the small investor.

With house prices inching up and rents skyrocketing, this may be the perfect time to invest in single family residential real estate.

If you do, you won’t be alone. According to the National Association of Realtors’ (NAR) 2012 3rd Quarter Metro Area Report:
“Investors…accounted for 17 percent of all transactions in the third quarter.”

More than one out of every six houses sold are purchased by an investor. In the most recent MarketPulse Report by CoreLogic, their Principal Economist, Sam Khater, wrote on the subject in a story titled Roll Tide, or The Rise of the Single Family Rental Market. The major takeaways from the article are:

  • The single-family rental market remained very active in the late summer of 2012 with increases in demand, tightening inventory and rising rents.

  • Nationally, rental leasing volumes were up every month for two years. In August, they were up 7% over last year.

  • Supply was down 11% over the same period.

  • This tightness in supply has caused rents to increase.

  • Rent growth is expected to increase at a ‘strong clip’ late in 2012 and in 2013.

If a private investor is looking for a great hands-on opportunity, perhaps purchasing a single-family house to rent out makes sense.

Give me a call to check out the opportunities today! 280-386-2992


Thursday, November 22, 2012

Where Are Rents Headed?

Here in the Boise Valley we have seen rents increase. A couple of things to think about: if you are renting it may be an excellent time to buy, and if you have ever thought about having rental income, there are still some excellent deals out there!

When deciding whether or not to buy a home, one consideration will be the cost of alternative housing options. Renting an apartment is one such alternative. Where are rental prices heading over the next few years?

Rental prices usually increase by about 3 percent annually. Trulia just released their Trulia Rent Monitor where they revealed that rental prices have increased dramatically in the last year.
“Nationally, rent gains continued to outpace home price increases in October, rising by 5.1 percent.”

Based on the concept of supply and demand, we believe rental prices will continue to substantially increase over the next few years. The long-run 30-year average increase in rental households is 200,000 each year. Over the next few years, those numbers will more than double to over 500,000 each year. Freddie Mac in their latest report, Multifamily Research Perspectives, projects housing demand going forward.
“Given assumptions consistent with economic growth slightly slower than long run averages, multifamily demand is likely to be in the range of 1.7 million net new renter households between now and 2015.”

The cost of owning a home will begin to increase as both prices and mortgage rates are expected to inch up in 2013. Perhaps now is the perfect time to lock in your long term housing expense by purchasing your own home.


Wednesday, November 21, 2012

Why Waiting Until Spring to Sell May NOT Make Sense

We have been happy to report that house prices have increased over the last several months. However, we have also warned that month-over-month prices since 2009 have softened in the fall and winter. We are beginning to see that situation repeat itself in 2012.

CoreLogic, in their latest House Price Index revealed that prices increased by 5% over last year. Yet, prices actually dropped .3% month-over-month (m-o-m). Analytics firm FNC, in their latestResidential Price Index, reported that prices increased 2.3% over the last year but prices remained unchanged m-o-m.

What Does This Mean for Sellers?

Sellers should be excited about the headlines showing price appreciation across the country for the first time in a long time. However, if you want to sell your home in the next 6-8 months realize that there is a better chance that prices will soften than appreciate during that time span. Waiting until the spring for a better price probably makes little sense.


Tuesday, November 20, 2012

Cost vs. Price Explained

We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Let us explain.

Yesterday, we reported that the Mortgage Bankers Association (MBA) is projecting that mortgage interest rates will inch up over the next twelve months. On Monday, we explained that many experts are calling for home prices to also increase over the next year.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact certain changes would have on the mortgage payment of a home selling for approximately $200,000 today:

Monday, November 19, 2012

Cycle of Foreclosure, About to be Broken?

Is this where I say “I told you so…?”

by marclebowitz


by Marc Lebowitz, RCE, CAE


Executive Director Ada County Association of REALTORS


Sales in September 2012 were 563 in Ada County, an decrease of 3% compared to September 2011.   Year-to-date sales are 5,258; 9.13% over the first nine months of 2011.


Dollar volume for September was up 14% to $117Mil. For the year we are at $1.043Billion!


New homes sold in September increased 53% over new homes sold in September of 2011!!…and are up 63.4% YTD.


Historically, September sales decrease by 9% from August. September 2012 sales decreased by 20% from August 2012.


Of our total sales in September… 21% were distressed (112 total sales)….unchanged from August 2012. In September 2011, 42% of our sales were distressed.  In January 56% of distressed properties were REOs and 44% were short sales.  In September the ratio was 71% short sales (79 total sales) and 29% REOs (32 total sales). This is six consecutive months with short sales being the larger percentage of distressed properties sold.


Pending sales at the end of September were 1,110; unchanged from the end of August. 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 August, totaling 28% 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 2.5 to 1.


At the end of September, we had 28% more sales pending than at the end of September 2011.


September median home price was $174,990; up 21% from September 2011. Median home price is up 27% since January of this year and above $150,000 for eight months running.  We continue to outpace our national recovery; according to NAR’s most recent report.


New Homes median price for September was $240,565; up 12.5% from September 2011.


The number of houses available decreased 1% from August; reversing a five month trend of modest increases. At the end of September our total active inventory was 2,092 homes. This is 9% less than last year at this time.


At the same time, the percentage of distressed active dropped 1% to 23%. 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 91% is Short Sales (437 homes) and only 9% is REO (43 homes); nearly unchanged from last month.


Available inventory declined in most price points.  We added eight homes in the $200,000 to $250,000 and ten homes in the $400,000 to $500,000 price ranges…and…we added one home in the $700,000 to $1,000000. All other price points had 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 ten homes; and by seventeen homes in the $250,000 to $300,000.


In Ada County we now have less than 3.2 months of inventory on hand.


The price category in shortest supply is in the range of $120,000 to $159,999 where we have 2.3 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 September sold data, our most desirable price point is $120,000 to $160,000 which was 23% of total sales. The next largest price point sold is $160,000 to $200,000 at 15.4% of all sales.