Tuesday, November 25, 2014

Treasure Valley City Tax Rates

The vast difference between these levy rates are hard to believe. I knew that Nampa and Caldwell were higher, but then comparing to Eagle's, wow!  These are the city tax rates, your tax bill may also have a variety of county, school district, highway district, cemetery, ambulance levy, mosquito abatement and community college assessments.

Per $100,000 taxable value:

Caldwell $1080.99

Nampa $949.35

Boise $748.37

Meridian $400.58

Garden City $372.46

Kuna $319.77

Star $215.23

Eagle $85.88

Source: Idaho Statesman


Saturday, November 22, 2014

Where Are Prices Headed Over the Next 5 Years?


Where are Prices Headed Over the Next 5 Years? | Keeping Current Matters
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred 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.

The results of their latest survey

  • Home values will appreciate by 4.8% in 2014.

  • The cumulative appreciation will be 23.5% by 2019.

  • That means the average annual appreciation will be 3.6% over the next 5 years.

  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 15.1% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.


Thursday, November 20, 2014

Harvard’s 5 Financial Reasons to Buy a Home


Harvard's 5 Financial Reasons to Buy a Home | Keeping Current Matters 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. Last year, he released a 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 an assortment of social and family reasons. It also makes sense financially.


Wednesday, November 19, 2014

5 Real Estate Predictions for 2015

Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac's U.S. Economic and Housing Market Outlook for November.

"The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better," says Frank Nothaft, Freddie Mac's chief economist. "Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015. And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity."

Freddie Mac economists have made the following projections in housing for the new year:

  1. Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.

  2. Home prices: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. "Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers," according to Freddie economists. "Historically speaking, that's moving from 'very high' levels of affordability to 'high' levels of affordability."

  3. Housing starts: Homebuilding is expected to ramp up in the new year, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.

  4. Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.

  5. Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.


Home sales heading to fastest pace since 2006

WASHINGTON (MarketWatch) — Sales of previously-owned homes next year are set to hit the fastest pace since 2006, as jobs, wages and the broader economy pick up, the National Association of Realtors forecast Friday.

In 2015 existing-home sales will likely hit 5.3 million, an 8% jump from 2014’s expected final tally of 4.9 million, NAR said.

“We’re starting to see more workers showing a willingness to quit, which usually signals they’re becoming more mobile and confident they can find a higher paying job,” said Lawrence Yun, NAR’s chief economist. “The impact of rising interest rates on affordability will be minimal as long as job creation keeps pace.”

Sales took a hit this year from bad weather, a relatively low number of homes on the market, and quickly escalating prices and mortgage rates.

One potential fly in the upcoming home-sales ointment is the difficulty that would-be borrowers have in getting a mortgage. Federally controlled mortgage-finance giants Fannie Mae FNMA, +0.48% and Freddie Mac FMCC, -0.50% are working on new programs that aim to expand the pool of borrowers, such as by bringing in more first-time purchasers (this group’s share of home sales recently hit a 27-year low).

Housing-market analysts, however, are skeptical about the extent to which government efforts, such as backing low down-payment loans and clarifying rules for lenders, can open the credit tap.

“We see this change as incrementally positive at best for single family housing demand because [Fannie and Freddie] have focused their mortgage purchases on the top quartile of credit scores for several years now,” Sterne Agee analysts wrote in a research note. “Mortgage originators are concerned about lawsuits over past lending practices fielded by a state or city attorney general from markets with high foreclosure rates.”

Even if lenders do become willing to loan to more types of borrowers, there could still be a demand problem, Fannie and Freddie’s regulatory chief said Friday. Mel Watt, director of Federal Housing Finance Agency, described a laundry list of demand issues, such as young people delaying family formation and choosing to rent, burdensome student loans, and trouble saving enough for a down payment.

“While things will not change overnight, it is my hope that many creditworthy individuals and families who are currently renters — but have the ability to pay a mortgage and become homeowners — will have the opportunity to pursue homeownership and will decide to do so,” Watt said.

On a bright note, there was good news Friday about potential young home buyers. Employment among young people hit the highest rate in almost six years, getting this group closer to be in a position to ramp up their home buying.


Wednesday, November 12, 2014

Ada County Real Estate October Market Report

by Marc Lebowitz, RCE, CAE

Executive Director

Ada County Association of  REALTORS


Single family home sales in October 2014 were 665 in Ada County, an increase of 6% compared to October 2013.  This is the first month for which we've had a year-over-year increase since March 2014!  YTD total sales are down 3% compared to this time last year (an improvement from the 5% we were down YTD through September); 6,616 homes sold compared to 6,829.

In October, sales of homes priced above $160,000 showed increases in nearly every price category. A bright spot in October is the surge in sales for homes priced between $160,000 and $200,000; up 2%. This price point had been flat for several months.

Average Days on Market in October were 59; five more days than last month. In October 2013, Days on Market was 51.

New homes sold in October totaled 134; down 3% from last year; up 6% from September.

Existing home sales were 531; up 9% from October 2013.

Historically October sales decrease from September levels by an average of 3%.   This year there was an increase of 2%.

Pending sales at the end of October were 885; down just 3% from October 2013. This is the smallest “decrease” in Pending sales all year (April was down 18%). This bodes well for the 4thquarter sales “rebound” we are forecasting.

October median home price was $208,698; down 1% from October 2013. Our YTD median price is $209,900; up 7% over last year.

New Homes median price for September was $302,257; up 10% from October 2013. For Existing homes the increase is 1% to $190,500.

The number of houses available for sale at the end of October decreased 10% from September 2014 to 2,591. This is 3% more than last year at this time.

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

A positive trend in new homes inventory: for homes priced between $160,000 and $200,000 there has been a steady increase since June.

In Ada County we now have 3.9 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 1.4 months; and $120,000 – $159,000 which has 2.1 months.

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

Of sales in October, the two price points that held on to their summer pace were $120,000 – $160,000 and $250,000 to $300,000..

The fourth quarter “rebound” that we’ve been anticipating arrived in October. The very modest “cooling” of median price is a reasonable tradeoff for the increase in sales.

There was also a dip in interest rates in October.

The Federal Reserve announced an end to “quantitative easing” that will most like cause rates to rise going into 2015.


Really? Data Shows Selling a Home in Winter Pays Off

If you’re waiting until spring to put your home on the market, you’re going to want to take a look at these numbers. Redfin analyzed homes listed from March 22, 2011 through March 21, 2013, and found that those listed in winter have a 9 percentage point greater likelihood of selling, sell a week faster, and sell for 1.2 percentage points more relative to list price than homes listed in any other season.

Thursday, November 6, 2014

First Time HomeBuyers Hit 27 Year Low

First-Time Buyers Hit 27 Year Low
Just 33% of primary residences sold this year were purchased by first-time buyers, down from 38% last year to the lowest level since 1987, the National Association of Realtors reported Monday.

The NAR says that the first-time-buyer share of home sales has typically hovered around 40% since 1981

The headwinds facing young buyers are well known: higher student debt, rising rents and a weaker job market have made it harder for would-be buyers to save for a down payment


Wednesday, November 5, 2014

Debunking 4 Myths about Buying a Home



Debunking 4 Myths about Buying a Home | Keeping Current Mattersrecent study by the Joint Center for Housing Studies at Harvard University revealed when renters were asked why they do no plan to own in the future, financial constraints were a more common response than the perceived lifestyle benefits they may receive from renting. Today, we want to go over those financial challenges and see if we can put some fears to rest and also clear up some misconceptions. Here are the top four financial hurdles that cause renters not to buy:

You Cannot Afford a Home

Well over 50% of renters consider this as a financial barrier to homeownership. However, study after study has shown us that there are major misunderstandings about what is required to purchase a home. The biggest misconception is the amount of a down payment required. A recent survey revealed that 44% of respondents believed that a 20% down payment was required. In actuality, mortgages are available with as little as 5% down (and even 3% in certain situations). The same survey showed that 30% of respondents believe that only individuals with ‘high incomes’ can obtain a mortgage. In actuality, there are several programs intentionally created to help moderate income families buy a home of their own (look at the FHA program for example).

You Do Not Have Good Enough Credit to Get a Mortgage

The survey mentioned above showed that 64% of respondents believe they must have a “very good” credit score to buy a home. Most people don’t realize that the average credit score for closed loans has actually dropped 24 points in the last two years. For more information on credit scores click here.

It’s Not a Good Time to Buy a Home

Determining when is the right time to buy a home from a pure financial calculation can be difficult. There are two elements of the cost of a home: the price of the house and the mortgage interest rate. When considering a purchase, you want to have at least an indication where prices and mortgage rates are headed. According to over 100 experts, house values are expected to increase by almost 20% between now and 2018. AndFreddie Mac recently projected that mortgage rates would be as much as one full point higher by this time next year. With both prices and interest rates projected to increase, now is the perfect time to buy a home.

It’s Cheaper to Rent than Buy

This is a myth that doesn’t want to die. However, Trulia recently reported that, in fact, buying is actually dramatically cheaper than renting. Here is what they said:
“Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. In fact, buying is 38% cheaper than renting now, compared with 35% cheaper than renting one year ago.”

Bottom Line

If you are even thinking about buying, get the facts from a trained professional. You may be pleasantly surprised by what you find out.