NewHomeIdaho.com Real Estate Blog

4 Things to Know About the Current Shift. Protect Your ASSests

We know that real estate is cyclical. The up and down of real estate is somewhat predictable. The crash of 2007-2008 was on track with the trend but far more devastating than could have been anticipated. While many people lost their homes, retirement and loads of cash, we all gained some crucial knowledge. Some of them being, don't get into extreme amounts of debt (even when times are good), when the market crashed, there is opportunity (flipping, auctions and foreclosures were excellent opportunities for the investor with cash.) and third, listen to your gut. 

The crash created low inventory because apprehensive home owners were and are hanging onto their houses longer before deciding to sell. This has created a shortage of inventory around the country. Locally in Boise, Idaho, we have had historically low inventory for the past three years. So how can we have historically low inventory and have a market shift? Here are 4 things to know.

  1. MORTGAGE RATES The Feds have said they will raise rates for the fourth time this year! This means that buyers qualify for less home. The amount a buyer can borrow is lower because a higher interest rate raises the monthly payment. Qualifying debt to income levels don't change when rates change. The adjustment is made in what the buyer can afford and at a higher interest rate means a lower priced home. This means that the buyer will have to come to the closing table with more cash down to compensate or home prices have to adjust to attract the buyer.
  2. HOME PRICES DROPPING In the past month, locally, we are seeing a lot of price drops. This happens seasonally but these price drops are drastic after a slow August and September. Buyers just aren't looking or making offers on properties at the same pace as the winter, spring and summer of 2018. This slow down along with interest rate increases means the market corrects...

Frustrated Buyers

Home/Hands

The excitement of buying a home can be a pivotal moment.  The decision was made...it's time to move! You've gone throught the process of getting pre qualified.  Seemingly mountains of documents that your lender has asked for, to finally be ready to make an offer on your dream property. You have seen properties come and go. Your Realtor said you must be pre qualified first before you could make any offers.  She also said you needed to have your house on the market and it MUST be pending for you to make an offer.  Done, done and done!  You are READY!

You look at the few homes on the market and finally find "the one".  It is perfect, you make that big decision to make an offer.  You think it's a pretty great offer. You even included a picture and a nice letter for extra persuasion.  The escalastion clause your Realtor suggested was brilliant.  You think it is fool proof...the houe is pretty much yours in your mind.  

Then you get that call...you lost the house to a all cash offer. Or a buyer that outbid you. How can this happen? There is nothing else on the market that you even liked! The rage builds. The injustice! You sleep on it and realize, these things happen.  Then it happens again and again. Before you finally won the bid on "the one" house, you are exhausted and frustrated. 

This is a typical scenario for buyers in the Treasure Valley right now. The inventory is steadily decresing. Buyers are becoming ftrustrated with the quality of homes available and the emotional roller coaster of putting multiple offers in on houses before winning the bid. So what can we do as buyers, sellers and Realtors to ease the frustration. In addition to being pre qualified and having your home pending or sold, I have three suggestions. If these don't satisfy you...let's talk about...

BUYER AND SELLER MARKET?

Spring buying season starts the day after Christmas in Boise, Idaho.  Going into 2018 is proving to be an exciting time to buy and sell!  How can that be you ask?  Let me explain.

If you plan to finance the purchase of your new home you may be interested to know a few things. With interest rates still historicall low, buying a home with rates under 5% means you can buy more house with your money.  When rates go up, that means your ability to buy a higher priced home goes down.  To get mathmatical on you, as an example at a 4.5% FHA loan with a minimum of $7,000 down for a $200,000 home, your payment (principal, interest and mortgage insurance) would be about $1350.  Depending on your cirucumstance (credit, debts, etc) you would need to make a minimum of $55,000 a year to qualify.  As rates are expected to go up this year as the economy has improved let me give you another scenario.  At a 5% FHA insterest rate, you would need to put a minimum of $10,000 down for a $200,000 home and your payment would be around $1400 a month (principle, interest and mortgage insurance).  Minimum yearly income would go up to about $60,000 depending on your situation. Just a rate incarease of 1/2 a percent woudl increase your minumum down payment by $3000, increase you monthly payment and increase your requirement for yearly income.  This is why it is a buyer market too.  Even with low inventory, it is a GREAT time to buy becaue you can afford more house NOW.  As a disclaimer, check with your lender to verify interest rate and numbers for your specific situation.

You will need an aggresive agent that can win multiple offer situations for you.  That's why you need me.  I have the skills and stategy to get the house that catches your eye.  I am your agent!

So why is it a seller market?  We have EXTREMELY low inventory and it has been steadily DECREASING over the past three years.  In some areas...

Renters Have the Advantage Over Home Owners

Good Morning Friends!  It's Friday!

I have just been thinking a little bit about renters.  I am geeking out on real estate facts here.  So, I just wanted to share with you a little bit of what I have been thinking about and why renters have the advantage in buying a house over current home owners.

There are a couple reasons for this:

1. Renters are free to act. They see a home come on the market, they are pre qualified.  They can get that house, the can put an offer in.  Usually in a multiple offer situation, a seller is going to choose a buyer that doesn't have complications.  A renter that dosent' have to sell a home first is pretty appealing, especially if that home owner is wanting to buy a house as well.  They don't want to be contigent upon a contigency.  So renters look much more apeealing in that situation.

2. Renters are free to look.  They ahve simonth or a year lease and they have time on their side to look.  So they can wait out the market.  During the winter months we tend to have lower inventory but in the Treasure Valley, we don not have  decreasse in activity.  winters are very busy around here for home buying.  Lots of people are moving here.  We have a great market, really, year round.  Our challenge right now is low inventory.  Renters have those searches set up whre they automatically get listings everydat and they can go look at a home on a moments notice.  Where as a seller, if they know they have to sell a home first and don't have that hoe on the market yet, they are ata disadvantage.

3. Easy to get out of a lease.  Because we have such low rental inventory righ now in addition to love inventory of houses to buy, renters...

First Time Buyers Face Obstacles On Path to Homeownership

First-Time Buyers Face Obstacles on Path to Homeownership

For people with good jobs and strong credit, today’s real estate market is an attractive one - with low mortgage interest rates and continued affordability. However, some buyers, especially first-time buyers, are struggling to enter the market and don’t always find the home buying process easy.

According to the National Association of Realtors®, first-time buyers accounted for 26 percent of home purchases in January. This is down from 27 percent in December and 30 percent a year ago, making it the lowest level for first-time buyers since October 2008. This group of buyers should normally be closer to 40 percent of the market.

Why is the number of first-time buyers so low? Ada County Association of REALTORS (ACAR) says several factors are making it difficult for these buyers to purchase a home in today’s market. “Things like tight credit, limited inventory, higher home prices and higher mortgage interest rates are hindering first-time buyers,” said Dave Ferguson, ACAR President. “Traditionally, first-time buyers are instrumental in housing recoveries because they help existing homeowners sell and make a trade up to a larger home. Therefore, it’s important to make sure first-time buyers who are willing and able to purchase a home have the opportunity to do so.”

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10 Ways To Prepare for Homeownership

10 Ways to Prepare for Homeownership

  1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
  2. Develop your home wish list. Then, prioritize the features on your list.
  3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
  4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
  5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
  6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
  7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
  8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved...

Yes, It's Time to Sell!

The first question people ask when considering to sell their home is “What the value of my home?”.  After the crash in home values five years ago, we are seeing a progressive recovery.  Property values around the Treasure Valley are up a conservative 15% each year for the past two years.  With that increase, homeowners who were once “upside-down” are now able to sell their homes and pay off the mortgage.  That is a positive note!  So my question for you is, is it time to sell your home?

Of course, if you were to sell and buy a new home, your next question becomes “What are the current interest rates?”  Still historically low!  Currently hovering around 4.5%.  Which means you can afford more home for the money.  That’s great news for anyone wanting to sell and buy a new property.  I have one lender I work with, Mike McLean with Gateway Funding in Boise, who offers a home warranty with any new loan closed with him.  That is a great value to any homebuyer.  Could now the be the time to take advantage of the low rates, incredible offers from lenders, and get a new home?

Perhaps your next question would be, “Who could get my home sold?”.   I know one Realtor, me, Kristen Johnson, who has a written plan on how she sells homes.  It is on this website under the tab “Sell My Home”.  As added value she has a professional photographer who will showcase your home capturing the beauty and unique features.  Those pictures will be seen by thousands looking to buy in our area.  Another benefit of using me as your Realtor is I put together a beautiful color brochure for interested buyers to set your property apart.  To consider the facts: increased value in your home, great interest rates, and an exceptional Realtor to be part of your home selling team.  Do you think, “Yes, it’s time to sell”?

Call me today! ...

Boise - Time Magazine Says 'Getting It Right'

Boise - Time Magazine Says 'Getting It Right'
The City of Trees has made more than its fair share of top ten lists in various national publications.
 
However, the most recent issue of Time includes an impressive addition for Idaho's capital city.
 
Under the magazine's "Solutions for America" header, Time ranked Boise no. 1 out of 9 cities for what it called "getting it right."
 
The criteria for cities to make the list includes a thriving economy, a booming cultural scene, quality health care, and a growing university. See the article here

Article Courtesey of ACAR

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January Ada County Market Report: This Will Take the Chill Off

January Ada County Market Report: This Will Take the Chill Off

Single family home sales in January 2014 were 406 in Ada County, an increase of 10% compared to January 2013.  January sales were strong, and, when linked with December gives us two months in a row or double digit year-over-year increases.

Dollar volume for January was up 23% to $96 million.

Days on Market for January were 70.  Yep. You read that right…70. In December we were at 59. In January 2013, Days on Market was 53. Is this a one time “blip” or something more. Check back in March.

New homes sold in January totaled 99; up 27% from last year.

Existing home sales were 307; up 6%.

Historically, January sales decline from December by an average of 27%. January 2014 posted a 29% increase over December 2013.

Of the total sales in January, 12% were distressed; up 2% from last month. In January 2013, 25% of sales were distressed.

For the month of January, REO sales (70% of Distressed; 34 total sales) exceeded Short Sales (30% of Distressed; 17 total sales).

Pending sales at the end of January were 813; down 15% from January 2013.

Of Pending sales in distress (14%), there was a decrease in the number of Short Sales (from 57% to 56% of activity; 31 total sales) and a increase in REO sales (from 43% to 44%; 25 total sales).

January median home price was $208,190; up 12% from January 2013.

New Homes median price for January was $267,000; up 11% from January 2013. For Existing homes the increase is 12% to $189,900.

The number of houses available for sale at the end of January increased  slightly...

Why Sellers and Buyers Should Have a Home Warranty

What is the low down on a home warranty?  You have probably heard about them.  A home warranty is an insurance plan that is affordable option to protect home systems and appliances.  Having a home warranty when your home is on the market can offer peace of mind against disaster and increase buyer confidence.

Home warranties protect the owner when they are selling their home.  Tragically, sellers of real estate have unexpected repairs while trying to market and sell their home, which can be costly.   The affordable home warranty plan can minimize costs and avoid closing delays.  Besides protecting the current home owner, a home warranty will give the property a competitive advantage over other homes on the market.  Buyer confidence increases, because there is a warranty to fall back on in the event of unexpected repairs.

From day 1 of a new home purchase, a buyer will be protecting their real estate investment.  Since owning a home requires a budget, peace of mind can be found with a home warranty purchase, which serves as budget protection from costly breakdowns and service costs of home repairs.

If your selling your home, consider offering a home warranty to the new owners.  As a buyer consider a home warranty to protect your new investment.  Either way, if you are buying or selling a home, a home warranty can offer peace of mind to your next real estate purchase.

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Rates Still Good Buy Now

The holidays are over and now you can think about buying a house!  Many first time home buyers think that means looking at homes.  Well, yes and no.  The first step is actually to talk to your bank or let me recommend a few of my team members who are loan officers that can prequalify you.  Knowing what you can afford will save you time and help me focus on what type of home we should be looking at.  After you are prequalified you have the ammo to put an offer in on a home you like.  Getting your offer accepted is more likely with a prequalification letter.

Rates are still low and there are several loan programs available.  Gabe Crum at Idaho Central Credit Union recently told me about an arm they have.  Here are the details; "Our fantastic ARM option has changed a bit for the New Year and is an incredible option for the home buyer that is planning to be in their new home for less than 10 years.  This product is fixed at 2.95% for 5 years and will then only adjust once every 5 years at a maximum adjustment of 2% per 5-year period and a lifetime maximum adjustment of 5%.  After nine years of having this loan, the worst rate the borrower could have is 4.95%.  This product only requires a 3% down payment, does not have an origination charge, and features lower PMI rates because we retain the loan at ICCU."  Wow!  What a great product!  What a great time to buy your new home.

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Baby Boomer What Are You Looking For?

Who is retiring in the next few years?  If you say “I am”, you may find what you are looking for in Idaho.  Recently I had a few conversations with some local builders who say they are responding to the demand of recent retirees. What do you want?  To name a few items, smaller square footage & yard maintenance taken care of, luxury upgrades in features such as granite and wood flooring.  You want neighborhoods that are close to shopping and entertainment.  Does this sound like what you’re looking for?

In the spring you will see more “patio” type homes becoming available that will fit your needs.  Boise, Meridian, and Nampa, are three of the communities who will have new developments designed for the Baby Boomers generation.  If you would like to know more about these communities, call me!  Kristen Van Leuven 208-918-0749

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Retirement Relocation Reality

For the next 19 years, 10,000 people a day will be turning 65.  The Baby Boomer generation is creating a new style of retirement.  The needs and wants of which deserve our attention.  Necessities include low cost living, low maintenance housing, and access to good medical care.  Since our retirees are active and healthy, they want 4 seasons, recreation and many shopping choices.  Undeniably, retirement is time for activities that have taken the back burner to work.  Such as, learning a new trade or taking classes to keep the mind sharp.   Retirement in next two decades will be changed by the Baby Boomers.

               Golden years meet the golden sunsets of the Treasure Valley in Idaho.  Boise, Idaho and its surrounding areas boast many amenities that retirees find attractive.  Housing in the Treasure Valley is moderately priced.  For example the average sold price for a typical three bedroom, two bath home is $139k.  While those who want more land and square footage for friends and family to visit will find an average sale price of $400k for a 3000-4000 sqft home on a minimum of 1 acre.  (All prices are based on sold home since January 1, 2013 to date)  City planners and local hospitals have done a tremendous job placing their facilities around the valley in the most convenient parts of town.  Recent hospital remodels and new building have made Treasure Valley hospitals modern and equipped with skilled doctors and tools to provide excellent medical care.  It is substantial to note that roads are well taken care of and freeway access is greatly improved over the past 10 years, making travel from one end of the valley to the other simple.

               White winters, colorful spring flowers and grass, pleasant, warm, late...

Comprehensive List of Activities for Idaho Retirees

Comprehensive list of retirement activities in the Boise, Idaho Area

Recreation

               Hot Springs

               Nampa Recreation Center/YMCA

               Golf Courses

               Running Races

               State Parks

               Skiing Idaho

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Early Bird Gets the House

     555 homes sold in Ada County in March 2013 showing an increase of 4.3% over the same time last year.  Average days on the market was only 67 days!  Will this motivate more homeowners to sell their homes?  Median home price was up a whopping 22% for existing homes. The local market is improving with each passing month.  With all these statistics supporting the fact that it is a great time to sell your home.

     Distressed home sales, those that are bank owned and shorts sales, made up only 18% of total sales in March 2013.  That is down 5% from March 2012.  We are seeing less percentage of distressed sales than previous years.  With those killer deals becoming fewer and far between, property owners could potentially sell their homes faster when they are not competing with really low priced homes.

     Inventory is low and the market is bouncing back but not at crazy, expensive price tags that we saw in 2007.  The good deals are there and the early bird gets the worm.  Get the best realtor, Kristen Pond!  My services are free for buyers.  I can look up any home on the market and, customize searches to get you what you want and save time.  Now let’s go catch your house before someone else gets it first!

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