Real estate is a dynamic market that reflects local, regional and national economic changes. The professionals at Windermere Real Estate-Capital Group, Inc. follow the trends that affect Idaho. From the number and value of homes sold in your neighborhood, to the latest ideas on selling your home or buying your dream home, you’ll find it here.

Check back often for the latest in what’s happening and how it may affect your home buying, selling and financing options.

If you have been reading the local newspaper lately like I have, one might wonder what is actually happening in the real estate market.  In the past month I have seen the following headlines:

“Low prices, cheap loans: But where are all the home buyers?”

“Home-sale contracts fall off cliff in May”

“Home prices rise in 20 major cities as buyers rush to obtain tax credit”

“Foreclosure sales decline, but housing recovery still has far to go”

“Foreclosures in the Treasure Valley fall for second straight month”

“Home sales rise slightly in Treasure Valley”

Confused?  So are many other local buyers and sellers.  The June market statistics are out on the table and the results look surprisingly positive.  Despite the end of the government backed tax credit, June pendings in Ada County rose.  Buyers are still entering the market with other incentives available like low interest rates, low prices and investment opportunities.  As the Ada County for-sale inventory drops and the foreclosure rates decline, current homeowners can look forward to a more stable market.  Buyers, don’t miss your opportunity to buy into the rock-bottom market.

In short, the Ada County real estate market is becoming slightly more stable everyday.  Higher June pendings without a government stimulus gives me comfortable optimism that the market is beginning to recover.  Look for market statistics provided by your Realtor for the most up to date information on the market specific to your area.  Regardless of market conditions, real estate deals are made everyday in Ada County.  Real Estate still is and will always be a fantastic investment in your local economy, a great way to build memories, and a starting point to the American Dream.  

For more detailed information on market condition specific to your area…send me an email at cbaldwin@windermere.com, or visit my website http://chrisbaldwin.mywindermere.com .  Happy Selling and Buying!

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Late last night, the Senate passed the homebuyer tax credit extension bill, which will extend the closing date deadline until September 30. This will allow first time homebuyers who already had a property under contract to receive an $8,000 tax credit if they close before the deadline. The bill also extends the closing deadline to September 30 for qualified existing homebuyers with a property under contract.

Although this bill will not help buyers currently looking for a home, it is great news for many people who already had a property under contract and were unable to close their transactions by June 30, the previous deadline. The bill is on its way to Obama and he is expected to sign it.

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Have you considered purchasing an investment property in the Treasure Valley?  For some, real estate investing is a compliment to traditional investments like mutual funds, bonds or the stock market. Have you heard the saying “Buy low, sell high?”  The next ten years of real estate in the Treasure Valley might not yield a better opportunity than now to purchase an investment property.  Real Estate prices are low and many existing homeowners are choosing to rent.  Here are the top nine reasons why you should consider buying an investment property through your Windermere agent in the Treasure Valley:

1. Diversify Your Investments: Owning your own home is a step toward diversification, owning investment real estate is a step toward protecting your assets from volatility in many areas of the market.  With all financial investment comes risk.  Talk to your financial advisor to see if real estate investment is an opportunity for you.    

2. Windermere Property Management: Windermere Capital Group now offers property management services with the Windermere value, trust and professional atmosphere you expect.  Windermere Property Management will professionally manage and protect your investment, making it our first priority.  Windermere has a high level of management standards in the industry and we will help you with the whole process from finding the right tenant to marketing and maintaining your property.  Our creative programs benefit, tenants, agents and most importantly landlords. 

3. You don’t need a lot of Money to Start: Many people believe that real estate investment is only for the wealthy.  Real Estate investment is typically available for purchase with 20% or less down, backed by a mortgage.  In some instances, sellers are willing to assist the buyer with costs.  If you purchase your first home and refinance once you have built up equity, you can leverage that capital for a down payment on a rental property.  Some homeowners are even offering seller financing to help you make that investment purchase.  Talk to your mortgage representative to find out what financing options are available to you.   

4. It can be a Second Income: Real estate investing can become a part time job and offer second income.  In a low market like we are experiencing now, many rental properties offer instant monthly cash flow.  I have come across listings that have homeowners ready and willing to stay in the home and rent the property from the investor immediately upon closing. 

5. You Gain Tax Advantages: Real estate is one of the most favored investments from a taxation standpoint.  With a real estate investment you can deduct expenses, depreciation write-offs, tax deferred exchanges and favored capital gains tax rates.  Owning a rental is a business, and tax laws allow deductions against your rental income.  You can deduct expenses like payroll, property management, advertising, maintenance, utilities, insurance and property taxes.  Tax laws change from year to year, so always discuss tax situations with your accountant and attorney. 

6. Real Estate Holds its Long Term Value: For some homeowners selling at the moment, it is hard to believe that real estate can hold its value in the Treasure Valley market.  In the long-term, real estate is a cyclical value and can change during any given year.  We have all seen the ups and downs of real estate over the years, yet in the long-term many manage to make good money from equity buying and selling homes.  Many invest in the stock market, yet it goes up and down all the time.  Historically, those who invested 35 years ago in the stock market and rode out the lows and highs have seen great returns.  If you hold on to a property 30 years and have a renter pay off the mortgage for you, you are most likely to walk away with equity if your investment is worth anything…which all real estate has value.  Even in the current market, if you purchased a home and paid it off over the past 30 years you would walk away with equity. 

7. You get Leverage: If you purchase an investment property mortgage at a particular interest rate, over 15-30 years, as long as your return/appreciation exceeds your interest rate, you are in a position to gain on your investment.  Leverage allows for creative financing that will allow you to grow your investment pool and create returns in the long-term.

8. You get a Positive Cash Flow: In some cases rental property might not cash flow for the first two to three years.  If you are fortunate to find the right properties, you could potentially cash flow in the first few months.  In the long-term, once an investment property is paid off, you have the potential to have pure monthly cash flow minus your taxes and management expenses.  In some cases, the tax advantages pay for the taxes.

9. It can help you Retire: Creating long-term investments can allow for a better retirement when your properties cash flow more with a paid off mortgage.  Just imagine having monthly cash just from sitting on a few homes you purchased years before.

If you are interested in real estate investments or looking to buy or sell a home in the Treasure Valley, I would be happy to help you achieve your real estate goals.  Email me at cbaldwin@windermere.com today to find out more information.  Happy Buying!   

Follow me on Facebook at ‘Chris Baldwin Real Estate’ for more information on the Boise market!

A great resource for those of you who are new to real estate investing: ‘Property Management for Dummies,’ Griswold 2001.

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See for yourself…

It appears that spring has sprung in our local Boise-area housing market. The graph below demonstrates a significant increase of both Pended and Sold properties in the last several months, with only a modest increase of listed(Active) properties in the same time frame. While this trend is typical due to seasonal implications, it is no less encouraging data in a marketplace with an uncertain reputation. Sales of single-family homes in Ada County(comprised generally of the greater Boise area and the cities of Meridian, Eagle, Star, Garden City, Kuna) have jumped 63% from February 2010 to March 2010, from 339 to 553. The number of transactions that established Pending status increased 59% in the same time frame, while the number of listed(Active) properties only increased roughly 1.4%, from 3412 to 3459. If you look back in the graph to the year-over-year comparison in March of 2009, you will see that the statistics support nearly identical improvements. The notable difference to consider is that the number of listed properties has declined nearly 10% in the last year.

If you would like to know how this trend analysis applies to your specific neighborhood, please contact me for more information. I can also provide statistics that relate to the percentage of list price versus sales price, average number of days on market, average price per square foot and months of inventory. Enjoy the beautiful weather!

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Even though the Homebuyer Tax Credit for first time and ‘move up’ buyers will expire on April 30, 2010, buyers should not let that deter them from entering this market. There are many loan programs and low interest rates still available to meet the needs of various buyers. 

The most common loan programs are Conventional and Federal Housing Administration (FHA) loans.

General guidelines for a Conventional loan are:

• - A 95% maximum loan-to-value (LTV)
• - Minimum down payment of 5%
• - No income restriction
• - Mortgage insurance is required above a 80% LTV
• - Maximum loan amount is $417,00
• - Borrower needs two months of reserves
• - Debt-to-Income (DTI) at 50%
• - Credit score of 620 or higher

General guidelines for a FHA loan are:

• - A maximum loan-to-value (LTV) of 96.5%
• - Minimum down payment of 3.5%
• - No income restrictions
• - A 0.55% mortgage insurance rate
• - Maximum loan amount of $303,750
• - No reserves
• - Debt-to-Income (DTI) no greater than 43%
• - Credit score of 580 or higher

In addition to these loan programs, the Idaho Housing and Finance Association and Boise City offer affordable housing programs to assist low-to-moderate income households in obtaining financing to purchase a home.  Please refer to http://idamortgage.com/  and http://cityofboise.org/housing  for more information on these programs.

Please contact Paula Johnson at paulajohnson@windermere.com  to learn more about these programs or for any of real estate needs.

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