Welcome to Idaho Windermere Real Estate, your premier source for Real Estate in Boise, Eagle, Meridian, Nampa, Garden Valley and other areas throughout Idaho. Whether you are looking to find a statewide Idaho Realtor, or a local Boise Realtor, we have the knowledge and resources to help you find, buy, or sell a home throughout Idaho with the West’s Best Real Estate Agency. Our Real Estate agents can help you select a home from Idaho MLS, Boise MLS, and other MLS lists throughout Ada County and Canyon County.
January 8th, 2010
Market Report For January 2010
Information from Idaho Data Providers
Idaho Data Providers Market Report - January 2010
· Complete Foreclosure Numbers for 2009
· 2010 Starting With A Record Level of Distressed Properties
· Real Estate Market Forecast for 20102010 Market Forecast
Nationally, although the government stimulus payments for buyers and record low interest rates have recently given the appearance that the housing market has reached the bottom and is recovering, this is not the case. The trifecta of: (1) continued high unemployment; (2) nearly 30% of all borrowers upside down on their mortgages and; (3) an increasing serious default rate (60+ days delinquent) on loans not yet in foreclosure that is triple the number of loans already in foreclosure (9% versus 3%) means a continued, constant and record stream of distressed properties entering the foreclosure pipeline and keeping inventory levels abnormally high in 2010
Government efforts to stem the foreclosure tide through its loan modification program (HAMP), have failed miserably and there are no other real solutions on the drawing board to stop or prevent foreclosures. The U.S. Treasury Department’s new short sale program (HAFA) will still result in the same number of distressed properties entering the market as just completing the foreclosures to begin with would have. In fact, it may even speed up the rate that new distressed properties reach the market as the new short sales under the HAFA program will come on the market much sooner than if the properties would have had to complete the foreclosure process.
Locally, a continued and increasing flow of distressed properties entering the local real estate market will keep inventory levels very high and further depress market prices during 2010 in the Treasure Valley. For the first time ever active distressed listings have exceeded 4,000 properties. We are entering 2010 with the highest level of distressed properties ever recorded for this area.
Idaho Data Providers not only tracks new foreclosures but also postponements of foreclosure auctions and the trend we are seeing from lenders has been disturbing. Over the last year, the lenders have been repeatedly postponing a vast majority of their scheduled foreclosure auctions.
In past years 50 scheduled foreclosure auctions on any given day locally was considered a heavy day. We are now seeing over 200 properties on the daily auction schedule more and more frequently with only a small percentage of properties actually going to sale. This has resulted in a hidden backlog of thousands of foreclosures with pending auction dates. If the lenders start allowing these properties to go to auction there could be a potential flood of new REO properties hitting the market.
What this all means is that you should brace yourself for a double dip in the housing market in 2010. Look for local prices to still fall another 7% to 10%. A bottom to the housing market and the beginning of a real recovery is unfortunately still at least one year away.
Final Foreclosure Numbers for 2009
Ada & Canyon County Notice of Default Statistics
Ada County Defaults Remain Unchanged in December
December 2009 foreclosure rates dropped slightly from that of November by falling 9% to end the year with another 630 new foreclosure starts for Ada and Canyon Counties. Overall, during 2009 there were an incredible 8,639 new foreclosures filed in Ada and Canyon counties. Compared to 2008 when what was then a record shattering 5,202 new foreclosures were filed, this is an astounding 66% year over year increase to follow up the unfathomable 216% increase in 2008 over 2007. The breakdown of the numbers between the counties is set forth below.
Foreclosure Rates Down 22% in Canyon County for December!
In December 2009 new foreclosure defaults filed totaled 214 which is an 22% drop from November. In total during 2009 a total of 3,304 new foreclosure starts were filed in Canyon County. This is a 240% increase from 2007 when only 969 notices of default were filed and a 56% increase over 2008 when 2,121 defaults were filed.
TheCalm Before the Storm! Short Sales Decline By 1.9%
We very well may be seeing the ‘calm before the storm’ as far as short sale numbers are concerned! In December there were 2,667 short sales listed on the market. This number is consistent with the number we have seen for the past six months. The coming flood of new short sales will primarily be caused by the new US Treasury Department short sale program (HAFA). This program will cause the current number of short sales to skyrocket in mid to late 2010 as all potential foreclosures must now be evaluated for a possible short sale before a foreclosure can be started on the property.
New REO Listings Up Sharply by 7.7%
After remaining virtually unchanged in November, December REOs are up sharply by 7.7% with 1,342 REOs currently listed. As lenders start shedding properties from their all time record levels of REO inventory we can expect the number of REO listings on the market to gradually increase during 2010.
Total Distressed Listings Exceed 4,000 for the First Time!
We are entering 2010 with the highest level of distressed properties on the market ever recorded for this area. The total number of distressed listings at the end of December 2009 reached 4,009. This number is an increase of 38% in only the 11 months that Idaho Data Providers has been tracking this number.
December 31st, 2009
Happy New Year!
All of us at Windermere RE Capital Group are excited for 2010! We would like to thank our clients, families, colleagues, and friends for your continued support in 2009 and look forward to working with all of you again in 2010!
December 4th, 2009
Thanks for attending our New Office Open House!
All of us here at Windermere Real Estate Capital Group would like to extend a sincere thank you to all of you who attended our open house last night! The event was great fun, with good food and drinks, festive atmosphere, and great conversations. We are very excited about our new space and happy to share it with all of you!
November 25th, 2009
OPEN HOUSE: Visit Our New Location!
November 6th, 2009
We Are On The Move!
Windermere Real Estate Capital Group, LLC has officially moved to its new location at 251 E. Front Street! We are located in the same building as George’s Cycles on the 4th Floor. We look forward to starting 2010 in our new working environment and welcome all our clients and real estate agents to stop by and visit us in our new space.
If you would like a personal tour of our new office, please call Shelley at 381-8000.
October 7th, 2009
A Website That Won’t Try To “Capture” You
This is my first real estate blog. It is inspired by a recent email I received that congratulated me on my great web site. The thesis of the email was that he liked the fact that he could cruise through my site and the MLS listings without being required to give his name, rank and serial number. I like that too. My first job was as a telemarketer, my dad didn’t believe woman should work outside of the home ( the best of the male chauvinists, a wonderful man of his time) so when I wanted to earn more money than he would give me in allowance I had limited choices. Telemarketing was allowed because I didn’t work in a place that served alcohol or served food. At 16 that left babysitting and telemarketing. I hated that job, it was intrusive and required that I call people during their dinner hour and invade their privacy. I don’t respond well to that myself, and I do not stay on websites that try to “capture” me. If you do, you will find yourself inundated with countless emails that offer you “free” dinners etc in an effort to hook you in.
Advertising has changed, and consumers are so much harder to reach. People can Tivo through commercials, tape the shows and fast forward through commercials, turn off the radio, stand by the trash can when they go through their mail, and throw the direct mail directly into the recycle bin. Now in movies you might notice that the actors are drinking name brand sodas and eating from boxes of name brand crackers. The idea is you can’t watch the movie and escape the subliminal messages. I ramble, and the mind salad is getting too big. Here’s the point, at Windermere you can go to the websites as often as you want and look through the live listings, updated every hour and no one will bug you or contact you unless you want them to. Sounds good? It is. It’s my kind of website. Visit as often as you want. Call me when you are ready for help. It’s a great time to buy, interest rates are low, inventory is high, and prices are low. It is the classic best time to buy to those who have the desire and means. My website you ask? www.BarbBurnell.MyWindermere.com
Thanks for asking,
Barb
October 5th, 2009
Surprise Valley Sensation Maples
Fall is in the air in Boise and it is fabulous! Being born and raised in Les Bois I’ve grown up loving the autumn changes that fill the air each year! From the heat of the Indian summer to the rainy days & surprise of snow top mountains, these are the signs of fall that surround us. The entrance to our neighborhood in Surprise Valley is lined with the most beautiful trees, Sensation Maples, and each day they change a different color when fall hits, ultimately ending with the most brilliant red leaves I’ve ever seen. It is such a wonderful greeting to come home to each day.
Boise also boasts many of the best public celebrations in the fall, such as, Art in the Park, the Hyde Park street fair, and the Women’s Celebration run. I love all of the outdoor activities and festival that Boise has to offer, along with the changing seasons, chill in the air and smell of BSU football tailgating.
These are the few reasons I love the seasons in Boise, Idaho…the best place on earth! Now this is Living!
September 21st, 2009
Rentals in Boise: Do they pencil?
I‘ve been getting a lot of calls lately from potential buyers and investors asking that very question. Have prices of easily rentable homes in Boise dropped to a level that makes them pencil out as cash flow positive? The answer is yes…and no.
As we are all aware, the mortgage crisis and the ensuing recession have all put downward pressure on housing prices both nationally and here in the Boise market. The latest numbers for August 2009 indicate that single family home prices in Ada County have dropped 17.9% in just the last year and in many areas have dropped as much as 35-40% since the peak in 2006. The current climate of near record low interest rates, readily available credit for well qualified borrowers, and relatively low prices presents a unique opportunity for those with access to cash, whether they be seasoned investors, or those lucky enough to have saved up a nest egg. Add to this that rents, while somewhat down, have held up much better than home prices and you can see why there is renewed interest in buying rental properties.
There are many, many ways to approach this question from in-depth analysis using several different measuring criteria such as Cap Rates, time value of money, GRM (Gross Rent Multiplier), etc. to the most basic. Is there any money left each month after I make my payment and cover other expenses? For the purposes of this discussion I will only be looking at single family residences, not apartments or multi-family houses. If the answer is yes, then there is positive cash flow. Obviously, this is the most desirable scenario. However, especially in times when home values are rising, there are many investors who are willing to tolerate negative cash flow in order to build equity. I believe it will be quite some time before home prices in this market begin to significantly appreciate so it makes much less sense to look at anything that isn’t cash flow positive or at least neutral, unless you have deep pockets and lots of patience.
I spoke to Gary Stott, a loan officer with Waterstone Mortgage The Stonebrook Group here in Boise, to get a lender’s perspective. A few basic things to consider before you decide that buying a rental makes sense now:
Almost all lenders will require at least a 25% down payment to provide competitive rates.
You will also need closing costs of around 3% of the purchase price.
Rates are currently around 5.5% for this type of loan, but can change daily.
You must be well qualified.
If you currently own a rental you must have a 2 year history as a landlord for the rental income to be eligible for qualifying you for the loan. Banks will typically assume a 25% vacancy rate and deduct that from the allowable rental income.
Most lenders will limit you to a total of four financed properties (including your residence), although Fannie Mae is now allowing up to 10. However the PITI reserves required by lenders increase dramatically for 5 or more properties.
Since the property will not be your principal residence you will not be eligible for the Idaho property tax homeowners exemption. If the property you are buying currently has the exemption applied to it you will need to multiply the assessed value by the levy rate to determine what the approximate taxes will be. This information is available from a qualified real estate agent or on line at www.adacountyassessor.org
There are other expenses which should be considered in your decision such as maintenance, repairs, vacancy, and management fees (optional).
So what are the magic numbers that you should look for to find properties that will pencil? There is no simple magic formula because there are so many non-numerical variables, such as location, condition of the property, layout of the house, etc. Most importantly in evaluating the property you need to try and determine, ‘How rentable is the property and how much will it realistically rent for?’ Rentability and rents vary by neighborhood, so thorough research is important. You need to ask, ‘Who are the potential renters in this neighborhood?’ ‘What affect will things like proximity to large employers, the freeway, or schools have?’ You can also research what current rents are by talking to a qualified real estate agent, property manager, or by scanning such sites as www.CraigsList.org and www.idahostatesman.com. You can typically search these sites by neighborhood and type of house.
But is there a simple litmus test the potential investor can use in today’s market here in Boise? Depending on your investment and income goals there are some criteria that you can apply to “weed out” properties once you have determined the areas you want to focus on and what the expected rents will be. 1) Typically, the most “rentable” home is a 3 bedroom, 2 bath newer home with at least a 1 car garage. 2) Rents will, of course, vary by neighborhood, but for our purposes, $800/month is a pretty reasonable number to use.
So one easy place to start would be 3 bedroom, 2 bath, homes with a garage where the PITI (Principal, Interest, Taxes, & Insurance) payment is going to be less than $800/month. We assumed hazard insurance of $35/month ($420 annually) and taxes at $185/ month ($2,220 annually).
We figured $140,000 for a starting point. Of course these are only estimates and the actual numbers would be dependent on the specific property involved. So I researched to see if there were specific properties available in the city of Boise that would meet our most basic criteria. There were:
| Listed Price (3bed, 2bathw/garage) | Number Listed as of 09-10-2009 |
| $140,000 or less | 181 |
| $130,000 or less | 91 |
| $120,000 or less | 38 |
I had Gary Stott at Waterstone Mortgage The Stonebrook Group run some sample good-faith estimates for me to see if we could hone in on a price point that works.
| Purchase Price | Loan Amount | Interest Rate | PITI Payment |
| $140,000 | 105,000 | 5.5 | 816 |
| $140,000 | 105,000 | 6.0 | 849 |
| $130,000 | 97,500 | 5.5 | 773 |
| $130,000 | 97,500 | 6.0 | 805 |
| $120,000 | 90,000 | 5.5 | 731 |
| $120,000 | 90,000 | 6.0 | 759 |
Based on Gary’s samples it looks like at an interest rate of 5.5% or lower the purchase price cutoff is around $130,000 and if the interest rate jumps to 6% then it is closer $120,000. Of course, this is not the whole picture as no allowance was made for other expenses such as vacancy, repairs, maintenance, or management. Nor does this consider that you are tying up anywhere from $30,000-35,000 in cash as a down payment in a market where values are not expected to increase anytime soon.
My conclusion at this time would be that if you can find a well located, easily rentable, property under $120,000 there maybe some marginal positive cash flow and that if you are able to hold the property for at least 3-5 years you may see some increase in the property’s value. Given the relatively large amount of up-front cash required and the relatively low (if any) cash flow in a declining market, this is probably not the investment strategy for most. However, compared to from 2005-mid 2009, the numbers are really starting to improve. For those who are comfortable doing more detailed financial analysis of rental properties there are several web sites that offer easy to use programs to quickly analyze investment properties. www.erealinvestor.com, www.realdata.com (I suggest the REIA Lite Edition), and www.planease.com are three that I am aware of. And of course you can always seek the advice of a qualified real estate professional.
August 26th, 2009
East Parkcenter Bridge Project
For many of us who live in Southeast Boise, the new East Park Center Bridge has been an unsettling issue. What we have found in watching the project unfold is much different than some of the doom and gloom predictions that many of the opponents had suggested. The actual construction, which began in April of 2008, has progressed quite smoothly with little noise, few traffic interruptions and minimal dust and debris. The structure itself appears to be well designed to handle pedestrian, bicycle, and, of course, automobile traffic while maintaining a low profile and a minimal environmental footprint. The project is on schedule, we understand, and is to be complete this November.
One of the biggest concerns about the project is the effect it will have on Park Center traffic. While it is too early to know, it is worth mentioning that we have seen only a minimal increase in traffic while Warm Springs Avenue has been completely shut down these past six weeks as the north side intersection of the bridge, Starview Drive, Barber and Highway 21 are realigned. With the installation of traffic lights and other traffic calming features, we believe the post completion traffic count will not significantly affect our neighborhood.
Our view is that any negative effect increased traffic might have on our area is going to be offset by the positive impact Bown Crossing has brought and continues to bring. What a great thing to be able to walk to restaurants, shops and professional services. You only have to take a child or grandchild to Powell’s to be hooked! We love living off ParkCenter Boulevard with the bike path and greenbelt on either side of us and think the bridge will have little or no long term effect on the lifestyle we enjoy in our neighborhood.
July 15th, 2009
FSBO vs. Real Estate Agent
So you’ve decided to sell your home and you are tempted to sell it yourself… For Sale By Owner, FSBO, Fizbo, etc. For some, a FSBO is the way to go and they can reach all of their home selling goals. However, while a prospective FSBO’s determination and sense of economy is to be admired, have they truly considered everything involved with a FSBO and what potential disadvantages a FSBO has? There are a large number of things to consider prior to going FSBO but here are just a few:
Do you know how to prepare your house for sale?
While you may love your extensive collection of birdhouses, will it turn-off prospective buyers? That wall of memories that includes photos of every event of your child’s life? Sorry, it needs to go. Remember, you’re not selling the home you live in. You’re selling property that someone else can envision as their home. Can you make that distinction?
Do you know how to price your property properly?
It’s fairly easy to “take a shot” at pricing your property. But what if you’re wrong? If you are too high then your house sits on the market and you keep spending money on whatever advertising you decide to do. Meanwhile, the price of homes continues to drop and you chase the market price down. You may end up selling your home eventually, but what did the “chase” cost you? Maybe you price too low and you leave money on the table. Simply put, the information that a licensed real estate agent has access to is vastly superior to non-licensed individuals. Do you really want to determine the selling price of your largest asset based on partial information you may have?
Are you prepared to spend your money up front?
In most cases, the listing agent funds the marketing efforts on a listing and re-coups those costs after the property sells (we hope). A FSBO seller must front all costs. If the property does not sell then the FSBO seller simply lost the money spent. The nice thing about sales commissions is you don’t pay them until the result you want actually occurs… your house sells.
Do you know how to market your property?
It takes more than a yard sign and a Craig’s list ad to give property the best chance of selling. There are powerful promotional tools only available to agents; the Multiple Listing Service (MLS), agent tours of newly listed properties, the most widely used real estate search tool on the planet (Realtor.com), and magic selling powder. Okay, I made the last one up.
Are you prepared for the legal issues?
Selling real estate has become increasingly complicated. The days of a simple one page contract are long gone. Selling the house yourself to save some commission dollars may be a short-lived victory if you get sued after close of escrow. Do you fully understand what disclosures you must provide? What about your responsibilities to obtain work permits on improvements you have made to the property? Are you inadvertently discriminating through your advertisements? How do you protect yourself if the Buyer backs out of a contract?
Do you know how to close the sale?
Are you prepared to open an escrow account, get a preliminary title report, order property inspections, handle contingencies, and order payoff demands for your mortgage? A licensed agent takes care of all of these details for you.
Thanks for reading. Do you agree? Disagree? Think I’m an idiot? Whatever you think, please share your comments and experiences.