Wednesday, July 31, 2013

3 Reasons to Buy that home NOW

From the folks at KCM Blog comes this timely piece of information. It totally applies to our area, so is upon the fence you are still sitting.....IT'S TIME TO GET OFF!

house keysHere are three great reasons to consider buying a home today instead of waiting.

1.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released last week projects appreciation in home values over the next five years to be between 12.3% (most pessimistic) and 32.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes any sense.

2.) Mortgage Interest Rates Are Increasing

As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows.

The National Association of Realtors, the Mortgage Bankers Association, Freddie Mac and Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.


Tuesday, July 30, 2013

Boise-One of the Safest U.S. Cities!

For the first time since 2006, violent crime was on the rise last year, according to FBI data. But in some cities, violent crime remains well below national averages. AOL Real Estate recently analyzed the FBI's report on crime to find the cities with populations of more than 200,000 that have violent crime rates "substantially" below the national average.

Here are the top 10 "safe zones" that made its list:

  1. Irvine, Calif. (ninth consecutive year named safest city in the nation)

  2. Fremont, Calif.

  3. Plano, Texas

  4. Madison, Wis.

  5. Irving, Texas

  6. Scottsdale, Ariz.

  7. Boise, Idaho

  8. Henderson, Nev.

  9. Chandler, Ariz.

  10. Chula Vista, Calif.


Thursday, July 25, 2013

Buying a Home? Don’t Let Fear Get in Your Way

financial burdenLast week, I was talking to a young couple I know that was about to close on their first home. They were riding the wild rollercoaster of current mortgage rate swings and were not happy about the mortgage process overall. Yet, when the conversation shifted to finally living in a home that they own, their disposition changed dramatically.

A smile came across their faces as they talked about decorating their son’s bedroom and how much he will enjoy the backyard. They talked about inviting friends over for dinner and their family over for the holidays. The more they talked, the more excited they became.

I asked them if many of their friends were also buying. I was shocked to find out that they weren’t. Why not? Their friends believed that homeownership was financially unobtainable right now. Many wanted to own but didn’t think they could afford the monthly mortgage payment. They decided to rent instead.

I said that, with interest rates and prices where they are today, owning a home might not be any more expensive than renting one. The couple agreed but said their friends were afraid; afraid they might not qualify for a loan, afraid to handle negotiations with a seller, afraid of the home buying process itself.


People should not make decisions out of fear! I’m not saying that every young person should own a home. I am saying that anyone that is qualified and wants to buy should not be afraid of the process. I realize the process may seem daunting but realize over 10,000 homes sell every day in this country. Sit down and discuss your goals with professionals from both the real estate and mortgage industries. Get the facts. Make an informed decision. Don’t let the fear of the unknown prevent you from living the life of your dreams.


Monday, July 22, 2013

Buying a Home? If you can buy TWO!

Buying a Home? If You Can, Buy Two

Posted: 22 Jul 2013 04:00 AM PDT


OB-KG706_roi093_G_20100930200048[1]John Paulson gave the keynote lunchtime address at the CNBC/Institutional Investor conference recently. He believes that housing will continue its strong recovery for the next 4 to 7 years saying:
The housing market has bottomed. It’s not too late to get involved. I still think buying a home is the best investment any individual can make. Affordability is still at an all-time high.”

When asked how the average person can take advantage of the current real estate market, Paulson said:
“Buy a home and, if you can, buy a second home.”

Should we care what Mr. Paulson thinks? Should we listen to him? The answer to both questions is a resounding ‘YES’. Here is why.

Who is John Paulson?

Paulson is the person who made a fortune back in 2007 betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell.

If we are to trust anyone’s advice, it should be Mr. Paulson’s.


Friday, July 19, 2013

Selling a House-What does it take?

sold homeThe most important need of anyone attempting to sell their house is – TO GET IT SOLD! It is imperative that you, the agent, are very direct in what it takes to get a house sold. Here is a checklist we put together.


A seller should be willing to give almost unlimited access to potential purchasers if they are looking to sell. Any restrictions to showing the home will result in fewer buyers which could result in a lower price, a longer time on market or both.


Condition goes a long way in determining whether or not a house sells. Bringing in a professional stager is the ultimate answer. If that is not possible, the seller should at least be willing to remove all the clutter and ‘throw on’ a fresh coat of paint where necessary.


Very few owners are willing to give a first mortgage to a potential buyer. However, there are other mortgage options they perhaps should consider. Allowing FHA financing is an example. Perhaps, they would be willing to help the buyer out with a seller’s concession. The easier it is for a purchaser to finance the home, the greater the chance more buyers will be interested.


Every house must be sold twice: to the buyer and to the bank if a mortgage is involved. To get a home sold the price has to be right. There are studies that have shown that listing a house at a price greater than the market warrants results in that home taking a longer time to sell and also selling for less money.


Thursday, July 18, 2013

SW Idaho Vacancy Report

Rent increases were substantial for this quarter with a total rent increase of 7.49% from last quarter. Ada County claimed the majority of those rent increases with a few Ada market segments increasing over 10%. Canyon County gains were mostly in multi-family housing alongside modest gains in single-family.


Tuesday, July 16, 2013

Hot Time in the City...for real estate!

by Marc Lebowitz, RCE, CAE

Executive Director, Ada county Association of Realtors

Single family home sales in June 2013 were 808 in Ada County, an increase of 16% compared to June 2012. Two months in a row above 800!?!  We sure haven’t seen that in a while.

Year-to-Date sales in 2013 are 3,760; up 12% over YTD 2012 sales of 3,344.

Dollar volume for June was up 36% to $196 Mil.

Days on Market averaged 45 in June; one day less than last month.  For the first six months we averaged 55 days-on-market.

New homes sold in June totaled 167, an increase of 33% compared to new homes sold in June of 2012.  Sales of existing homes were up 13% in June.

Historically, June sales increase by 8% over May.  June 2013 sales decreased by 1% compared to May 2013. Remembering that May sales blew up; its better to look at YTD trends than to compare these two months.

Of our total sales in June… 12% were distressed no change from May 2013. In June 2012, 26% of our sales were distressed.  In June 2013 45% of distressed properties were REOs (43 total sales ) and 55% were short sales (53 total sales).

In June 2012 we were experiencing significant improvement in the health or our “solds”; 29% of total compared to 53% in 2011.  We have now seen that distressed component reduced by almost half again.

Pending sales at the end of June were 1,368; down 4% from May.

Of Pending sales in distress (12% of total pendings), short sales outnumbered REO’s nearly 2 to 1.

At the end of June, we had 11% more sales pending than at the end of June 2012.

June median home price was $212,000; up 21% from June 2012. Median home price is above $210,000 since January 2008!  We continue to outpace our national recovery; according to NAR’s most recent report; national median price is $208,000.

New Homes median price for June was $266,518; up 20% from June 2012. For Existing homes the increase is 26%.

The number of houses available for sale at the end of June increased 11% from May 2013 to 2,113.  That represents several “Firsts”: 1st time over 2,000 in a year; 1st time increase year-over-year since 2007; 1st double digit increase in availability.

This is 2% more than last year at this time. Since January we have increased the number of single family homes for sale by 26%.  This is what is allowing us to sustain our YTD sales increase.

The overall increase in active listings continues to be driven by the addition of existing homes to the market; increasing 18%. The number of New Homes available decreased 1% from May.  With Existing Home’s median price up 22% YTD it’s clear that more owners are getting their relationship with their mortgage “right side up” and deciding that now is  a great time to sell.

At the same time, the percentage of distressed active listings held steady at 14% overall.

With an inventory increasing and the percentage of distressed inventory decreasing; median home price will continue to strengthen well into 2013.

Of our Distressed Inventory 80% is Short Sales (236 homes) and 20% is REO (59 homes).

Available inventory increased at all price points except $250,000 to $300,000; which decreased by 5 homes. The price range adding the most homes to the market…$120,000 to $160,000 with an increase of 64 homes.

In Ada County we now have 2.6 months of inventory on hand.

The price category in shortest supply is <$120,00 where we have 1.8 months. All price points up to $500,000 have a <4 month’s supply.

Based on June sold data, our most desirable price point is $160,000 to $200,000 which was 20% of total sales. The next largest price point sold is $120,000 to $160,000 at 19% of all sales. Coming in a strong third is $200,000 to $250,000 which was 18%. The category most improved is $200,000 to $250,000 which was up 32% from May to June.

The pace of this recovery is beyond what most of us thought coming into the beginning of the year.  “Last year was so strong.  We would be competing with a strong 2012. Declining inventory would hold sales increases well below 10%.”  Well…that sure was wrog.

Ask any broker how long this market is going to last.  Mostly you’ll here that: “it won’t be too long; but we could we just enjoy it while it’s here.” I agree.


Monday, July 15, 2013

Selling a House? Don't over price it!

HiRes (6)There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare.

Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:

  • Year-Over-Year prices jumped 10.7%

  • Quarter-Over-Quarter prices jumped 4.1% (16.4% annualized)

  • Month-Over-Month prices jumped 1.5% (18% annualized)

No expert is expecting home prices to shoot up 18% in the next twelve months. If anything, price appreciation may slow as rates and inventories increase. Investors will begin to slow their purchases and the first-time buyers expected to take their place will be working within a pre-set budget in many cases.

Buyers’ Purchasing Power

Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).

The Impact on Prices

This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.

If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months.


Friday, July 12, 2013

The Cost of Waiting

I have several buyers looking at this exact scenario. If  you are in this situation and it gets too emotional I recommend looking back at post from a couple of days ago regarding the Serenity Prayer. (I know I did!)

Buying a House: The Cost If You Waited

Posted: 08 Jul 2013 04:00 AM PDT


We often talk about the potential cost of waiting to buy a home. Today, we want to look at the actual cost for someone who waited over the last year. We used a 10% increase in house values as prices have gone up by double digits in the country on average. We looked at approximate mortgage rates last year compared to this year. Here is the impact on a monthly mortgage payment (principal and interest):



Thursday, July 11, 2013


After having this discussion twice this morning, it bears repeating again and again. If you price it too high to begin you will likely take longer to sell and sell for LESS than those properties that are priced correctly from the beginning.

What follows is the research that bears this out.

House Price See SawThe Research

Are there any negative effects from changing the listing price of a property? This question haunts Brokers/Agents as well as sellers of property every day. At present, there does not seem to be a consensus answer to this question within the professional real estate community. Fortunately, this question was scientifically investigated by John R. Knight. Unfortunately, few know the results of Professor Knight’s research.

In Knight, the impact of changing a property’s listing price is investigated. Additionally, the types of property that are most likely to experience a price change are also estimated. The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties. Furthermore, bigger price changes are found to experience even longer marketing times and greater price discounts. Finally, as for which properties are most likely to experience a price change, Knight finds that the greater the initial markup; the higher the likelihood that any given property will experience a listing price change.

Implications for Practice

Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start. Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight. Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors. Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.

Interestingly, I have found in my own research that the direction (up or down) of the listing price change does not matter. A listing price increase and decrease both lead to similar results found in Knight’s work – longer marketing times and lower prices. Therefore, get the price right from the beginning. It is best for all.



In an analysis of metropolitan areas with 250,000 or more populations, using March price data from Clear Capital, Kiplinger shared their list of the top ‘12 Cities Where Home Prices Have Risen Most’. Ranked 12th on the list was Boise, Idaho with a +15.6% change in March home prices compared to March 2012. The national one-year change in home prices was +6.8%. Boise’s unemployment level was at 6.5%, lower than the national unemployment level of 7.5%. And, while existing-home sales rose 10% year-to-date in March, inventory remained constrained in the area

Wednesday, July 10, 2013



hands in prayerYou may be frustrated while attempting to buy a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to decide whether it is the right time for you and your family to move. Even in the current market.

“How?” Let’s look at the simplicity of the famous Serenity Prayer and apply it to buying a home in today’s real estate market.

“God, grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main concerns many talk about when discussing the housing market are:

  1. the current economy

  2. the rapid rise in interest rates

As an individual, there is very little you can do to impact either of those two situations. The best think-tanks in the country are struggling to discover what impact each of these items have on real estate.

Have the courage to change the things you can

If you are a buyer and you believe now is the right time for your family to purchase a home – DO IT! Prices will only be higher later this year and though interest rates are rising they are still at historic lows. That means that your monthly housing expense will still be lower than almost any time in the last 50 years – and probably lower than your current rent payment.

The wisdom to know the difference

We all realize that the economic situation will take some time to correct. The question is whether or not it makes sense to delay moving on with your life until everything gets ‘better’. Should you not buy a house and enable your kids to attend the school you have already decided is best for them? Should you spend another winter up north even though your doctor recommends you move to a climate better suited to your current medical situation?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by moving forward. The time has come for you and your family to move on and start living the life you desire. That is what truly matters.


Wednesday, July 3, 2013

Interest Rates...Where are they Headed?

RollercoasterToday’s $20,000 question is…Where are mortgage rates headed in the near future? Most believe the rapid rise in rates experienced over the last month will not be sustained and that they will level off into a range between 4% and 5%.

When recently asked, Zillow’s director of Mortgage Marketplace, Erin Lantz suggested:
“It is impossible to predict. However, we expect there to be a lot of volatility, probably between 4.5% to 5%.”

In Bankrate.com’s Mortgage Rate Trend Index last week, 20% of the experts said rates would go up this week, 30% said rates would go down and 50% said they would remain unchanged.

What about going forward?

Doug Duncan, chief economist for Fannie Mae recently addressed where mortgage rates may eventually end up:
“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”

Why wouldn’t the Fed be troubled? They have artificially kept rates low in order to stimilate the economy. As economic indicators begin to show signs of a recovery, the stimulus will be pulled back and rates will rise.

Frank Nothaft, Freddie Mac’s VP and chief economist confirms this:
“As the economy continues to improve, we expect to see continued upward movement in long-term interest rates.”

Buckle in!! The rollercoaster ride will probably continue.


Is there a another housing bubble?