Monday, December 30, 2013

Boise Still Good Housing Bet!

As reported in Forbes magazine Boise is number 10 on the list of Top Ten Housing Bets in the country for investors.

"Investments in single-family homes for rental properties will remain an attractive venture in many markets in the new year, says Ingo Winzer, president of Local Market Monitor. Winzer notes that Texas and Oklahoma offer some of the best bets “with their low unemployment rates and ability to profit for years from new shale oil and gas development.”

Local Market Monitor and HomeVestors, an investment company that brands itself “We buy ugly houses,” named the following top 10 housing markets for investing in single-family homes for 2014. All of these markets have posted strong appreciation in the past year but are still underpriced by up to 28 percent.

  1. Forth Worth, Texas

  2. Dallas

  3. Charlotte, N.C.

  4. Nashville

  5. Houston

  6. Atlanta

  7. Oklahoma City

  8. Orlando, Fla.

  9. Las Vegas

  10. Boise City"

So whether you are looking for a home to live in or for an investment, give me a call and make your good housing bet!

Saturday, December 28, 2013

Housing Predictions for 2014

As the end of the year approaches it becomes time for both new year resolutions and also predictions. Here are the predictions from Diana Olick of CNBC.


Home sales will rebound: After a brief lull in the fall of 2013, I predict that sales activity will return to the market with more homebuyers. The steep jump in home prices has brought thousands of homeowners above water on their mortgages, enabling them to sell and move. Negative equity has been one of the biggest barriers to home sales since the housing crash. Come spring, there will most likely be more sellers, more homes on the market and therefore more transactions.


Home-price gains should ease: Prices will still rise, no question, but probably not as steeply as they did in 2013. Annual gains of more than 12 percent were driven in large part by investors on the low end of the market. As foreclosures ebb and fewer distressed sales are in the mix, prices will moderate. Still low inventories, however, will keep them in the positive.

Rents will rise: Despite the return of home sales, renter nation should continue throughout 2014, as younger Americans and first-time homebuyers are still left out of the recovery. Saddled with student debt and unable to come up with the large down payments required from today's mortgage lenders, this cohort will probably continue to fuel both the multifamily apartment market and the single-family rental trade.


Investors will not leave the market: Some have predicted that with rising home prices, the large-scale private-equity investors will leave the newly evolving single-family rental market. Just the opposite. Now that they have built economies of scale and figured out the management, they will most likely settle in for the long haul — perhaps not buying as many new properties, but keeping the bulk of the ones they have. Some smaller investors may opt to sell, but they may sell to the bigger guys rather than to individual-owner occupants.

Mortgage rates will rise: The days of the 3.5 percent, 30-year fixed are over. Rates are already up well over a full percentage point from a year ago and as the Federal Reserve begins its much-anticipated exit from the bond-buying business, I believe rates will inevitably go higher. How much that affects home sales will depend entirely on job and wage growth. Mortgage underwriting will remain tight, but buyers with solid credit should be able to weather slightly higher rates. By historical standards, they are still relatively low. It is less rate and more availability that will continue to hamper sales.


Wednesday, December 18, 2013

Canyon County Showing Stability and Growth

The following graph, courtesy of the Idaho Statesman, shows an a increasing stable real estate market in Canyon County.

Sunday, December 15, 2013

Today's Prices Compared to Peak

I found this graphic rather interesting. I would like to also see one illustrating the increase from the bottom of the trough that our market was in a couple of years ago.

Saturday, December 14, 2013

Harvard: 5 Financial Reasons to Buy a Home

From KCM Blog:

Harvard: 5 Financial Reasons to Buy a Home 

Posted: 10 Dec 2013 04:00 AM PST

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“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.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.


Thursday, December 12, 2013

November Real Estate Market Report for Ada County – Some good some not so much

Single family home sales in November 2013 were 548 in Ada County, a decrease of 3.3% compared to November 2012.  I expected a better month, but sales fell about 30 units short.

Year-to-date sales are 7,385; up 14% over 2012 YTD sales of 6,471.

Dollar volume for November was up 9.5% to $131 million and YTD we are just over $1.7 billion in sales.

We now have had two consecutive months with sales falling behind the previous year. October 2012 was a really strong month; up 19%. November 2012 was pretty good too; up 15%. December is an interesting month for sales. Some years its higher than November. Some years close and some years well below.

The last two months sales have been with 5% of previous year. If that trend continues in December sales will be very near 500 units which will give us a total sales increase for 2013 of 13%.

Days on market averaged 52 in November, no change from October.  Our year-to-date average is 51 days.

New homes sold in November totaled 105; down 14% from November 2012…but slightly stronger than in October

Historically, November sales decrease an average of 9% from October.  November 2013 sales decreased 11% compared to October 2013.

Of the total sales in November, 10% were distressed; up 1% from last month. In November 2012, 24% of sales were distressed.

For the month of November, REO sales (57% of Distressed; 31 total sales) exceeded Short Sales (43% of Distressed; 24 total sales), for the first time in 2013.

Pending sales at the end of November were 831; down 9% from September 2013; but even to what was pending in 2012 at the end of November.

Of Pending sales in distress (13%), there was an increase in the number of Short Sales (from 52% to 59% of activity; 63 total sales) and a decrease in REO sales (from 48% to 41%; 44 total sales).

November median home price was $205,700; up 16% from November 2012. According to NAR’s most recent report; national median price is $199,500.

New Homes median price for November was $274,161; up 10% from November 2012. For Existing homes the increase is 15% to $185,000.

This is the fifth month in which we’ve been above $200K.

In Ada County, the median family income is $67,519; making a $205,700 home within reach for that “median family income” family.

The number of houses available for sale at the end of November decreased 10% from October 2013 to 2,263.  This is the third consecutive month of decrease.  This is 21% more than last year at this time. Since January we have increased the number of single family homes for sale by 36%, allowing us to grow our YTD sales increase.

Historically, inventory decreases steadily from August to December. Anecdotally, I’ve spoken with several sellers who listed their homes in September/October at an aggressive price; then took one or two reductions before pulling the listing from the market, deciding to wait until Spring 2014.

Of the total active listings, 11% are distressed, up 1% from the end of October 2013.

With inventory experiencing seasonal decreases and the percentage of distressed inventory holding very low, median home price will remain strong through the end of this year.

Of our Distressed Inventory, 71% is Short Sales (163) and 29% is REO (66).

Available inventory decreased at all price points except in the $120,000 to $160,000 range, with an increase of 16 homes.

In Ada County we now have 3.9 months of inventory on hand, up a little from the end of October.

The price category in shortest supply is <$100K where we have 1.8 months. All price points up to $400,000 have a 4 month’s supply. Above $400,000 the supply is closer to five months.  Remembering that six months of available inventory describes a “stable real estate market”; it looks like we are heading into a period of “normal” like we haven’t seen in several years.

Of sales in November, the most popular price point was $120,000 to $160,000 (21%); followed by $160,000 to $200,000 (17%), $200,000 to $250,000 with 14%.

So…what’s next?

Lawrence Yun, NAR chief economist, said a flattening trend is expected. “The erosion in buying power is dampening home sales,” he said. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

For Ada County, the positives that have helped push the pace of our recovery past the national average are still in place; growing population, jobs creation and quality of life issues will bridge us through the slow winter months.


Wednesday, December 11, 2013

Knowing Your Options for the "Fixer Upper"

Couple PaintingThe fixer-upper properties on the market will give you more purchasing power when shopping for a new home. Bargains can be found in homes that have been foreclosed, seized by the government or just fallen out of repair due to homeowner neglect. While it is true that you will save thousands of dollars on these homes that will need lots of work, there are hidden costs that buyers fail to consider. Ask yourself if it’s worth it and know your options.

Know exactly what you are getting into

Don’t underestimate the cost of renovations and repairs. A home inspection will let you know the fundamental repairs and maintenance that must be done to the home. Without a home inspector, you may end up over paying for the fixer-upper anyway.

The inspector will evaluate any problems with the interior and appliances, roofing, heating and cooling system, plumbing, electrical wiring, insulation and ventilation, and the structural foundation, exterior faults and more. Fixer-uppers may have a lot of problems with these parts of the home, and a realtor can downplay the extent of the issues because of their stake in the outcome of the sale. A home inspector is worth hiring to get an unbiased perspective and uncover problems you can’t see yourself.

You ultimately have to decide how much money you are actually saving by buying the fixer-upper once you add in the costs. Once you spend all the money on repairs to make it habitable, will you still be satisfied with your choice? Will you hire someone to do the repairs or do you have the patience and skill to do it yourself?

Consider a FHA insured HUD 203(K)

It is worth checking to see if you qualify for a program known as HUD 203(k). It allows the buyer to purchase a fixer-upper with a FHA guaranteed loan, and the best part is that it protects you from extra costs if the “fixing” part costs more than estimated. You must submit a comprehensive list of repairs with corresponding cost estimates with your application, so you will need to get a home inspector, have the cost of labor and repair determined, and prepare your detailed plan for accomplishing it all for the FHA and your creditor.


The ideal fixer-upper would consist of superficial revamps rather than major appliance, ventilation, or structural repairs. Minor renovations would be painting inside and out, installing ceiling fans and light fixtures, and replacing carpets, windows, or doors.

Be patient

Fixing up the house might take longer than you originally planned, but it can be well worth it. Remodeling and minor repairs will most likely take longer than you expect, especially if you are haven’t dealt with this before. You chose to save money with a fixer-upper. It takes time to give a house the proper care that will result in a comfortable house to call your home. Do your homework and make an informed decision.


Monday, December 9, 2013

Baby it's COLD outside!

I  don't know about you, but as far as I am concerned they can take this  "arctic blast" somewhere else! I have had enough. Of course when I start complaining I check the temperature for my daughter in Miles City Montana and they hit 35 below! so perhaps I should just grin and bear it.

I also think of a couple of people whom I have sold houses to this past summer from much warmer climates, I am sure they are questioning what they have gotten themselves in for.

I did see these recommendations that are worth reprinting.

During the current winter weather conditions we recommend you do the following to protect your home and protect your pipes from freezing:

  • Close foundation vents around the base of your home when the temperature is below 20º F then open them once above 20º F if they are around a water area (i.e. exterior hose spicket, etc.)

  • Leave a little water dripping from inside faucets

  • If you have plumbing that runs along an outside wall, be sure to leave cabinets open & wrap exposed pipes with insulation, as well as wrapping any exterior pipes with insulation

  • If you water heater is in the garage, keep the garage door closed

  • Disconnect hoses from outside the home

I guess it is time for me to go put on my 6 layers of clothing and go for my walk today. ENJOY!

Tuesday, December 3, 2013

14,027 Houses Sell Every Day in the U.S.!!

houses with cartThere are some homeowners that might consider waiting for the spring to sell their house thinking that no one buys a home during the winter months. What we should understand is that homes sell EVERY DAY. As a matter of fact, according to the latest Existing Homes Sales Report from the National Association of Realtorson average14,027 homes sell daily in this country.

It is true that more houses sell in the spring than the winter in most markets.  However, it is also true that there will be more competition as many sellers wait to the spring to put their house on the market.

Thousands of homes sell each and every day in this country. Don’t be afraid to put your house on the market this winter.