April 15th, 2009
Market Trends March 2009-Sold Vs. List Price %
This graph shows us how slow the market has been since the dramatic decline on the national economy of the last six months. There has been a 40.3% increase in the average days on market of the properties sold.
The Sold/List Price % is a very interesting data set that at times can be very difficult to understand. I believe that this indicates clearly that buyers simply did not purchase until the sellers price hit the appropriate level. Then buyers jumped off the fence and purchased.
April 15th, 2009
Market Trends March 2009- Average Price Per Square Foot
This data set clearly shows that the average price per square foot has declined dramatically over the last 15 months. This does not mean that every house has declined in value by 22.1%, but rather higher quality homes simply have not been selling over the last six months and thus the only ones that have been selling are more average in quality.
I believe we will start to see this slowly increase in the coming months and see more activity in the upper price ranges.
April 15th, 2009
Market Trends March 2009-Number of Homes
This data set shows the number of homes for sale, sold, and pended during each of the prior 15 months. At first glance we can notice the obvious decline in number of available homes. The 15 month low was in January and even though we have increased slightly from that low, one would expect that due to normal seasonal trends. The active inventory level at the end of March 2009 was still lower than any month in 2008.
The number of homes sold or closed in March 09 was down 12% over March 08. This would normally be very bad news, but I choose to see the overall number as being very positive because Jan and Feb 09 were considerably lower than the same months in 08 and this indicates a current upward trend.
The most positive part of this data set is the number of homes pended, or under contract but not yet closed, which shows the highest number of pending transactions in the last 15 months. This combined with declining inventory levels is a very positive sign of stabilization and market recovery.
February 19th, 2009
How is the Obama Housing Plan going to help?
How is the Obama Housing Plan going to help? Click here to read an article that describes some of the benefits.
February 13th, 2009
Is now a good time to buy a home?
Hardly a day goes by without an article in the paper or a news clip bemoaning the state of the real estate market. While values have clearly suffered over the past year, there are several components of the real estate market that are positive.
Interest Rates
Interest rates for 30 year, fixed rate mortgages are at historical lows. While rates are a bit of a moving target, I have clients who closed on homes over the past couple of weeks with rates as low as 4.8%. The impact of these low rates can be significant. On a $200,000 mortgage, the difference between 4.8% and 6.25% is $180/month!
While you may hear from the media that no one is lending, I have not seen any problem with qualified Buyers getting approval on home loans. Even though qualifying is a bit more difficult than years past, there are still several outstanding programs available. The more traditional programs will require 20% down, but options still exist for Buyers with as little as 3.5% down.
If you need the name of a quality lender, please do not hesitate to give me a call.
Home Values
So, what can be positive about the decline we have seen in prices over the past 12 – 18 months. Depending on the area, prices have declined between 10 – 20%. This decline in prices, however, has created affordable housing opportunities for a larger group of people.
There has never been a better time to buy for the first time home buyer. There are close to 200, newer 3 bedroom, 2 bath homes in the Boise/Meridian area priced under $150,000. In 2006, this would have been close to zero! Additionally, first time home buyers may qualify for a $8,000 tax credit. This combined with the low interest rates makes buying a home as inexpensive as renting.
For those people considering selling their current home and buying a larger home, this is also a good time to be looking at real estate. While the value of their existing home has declined so has the value of the larger, dream home. The key is to focus on the net difference between the price of the home you want to buy and the price you will receive for your current home. In absolute dollar terms, the larger home has corrected by a greater amount than the less expensive home. If you budgeted $50,000 additional to spend on a home, that $50,000 will go a lot further today than it would 2 years ago. The lower interest rate will also help the affordability.
The Stimulus Package
It is currently looking like there will be a very attractive in the stimulus package to bolster the real estate market. The current plan if approved would provide an $8,000 tax credit to first time home buyers. Unlike the current program in place, this $8,000 would not need to be repaid.
While I am not able to predict when home prices will stop their decline, I can say that we will only know the bottom has been reached after we have had several months of increased prices. With very low interest rates, significantly reduced prices and unheard of tax incentives all indicators are it is a good time to be buying real estate!
February 9th, 2009
What does it all mean; Short Sales, Foreclosures, Deed in Lieu?
It is hard to pick up a newspaper or turn on the news without hearing about short sales or the increase in foreclosures. As I talk with people about real estate, this is one of the areas that is probably a bit of a mystery.
Short Sales
In the vast majority of real estate transactions, when someone purchases a home they borrow money from a bank or mortgage lender to cover a portion of the purchase price. As security, the lender places a lien on the property in the amount of the loan. In order for the home to be sold and clear title issued to a new buyer, the lender has to remove the lien. Typically a lender removes this lien once the loan balance is paid in full. A short sale occurs when the net proceeds of a real estate transaction are less than the amount owed on the property. In a short sale situation, the lender must agree to accept less than the amount owed in return for removing the lien.
A lender’s willingness to accept a short sale depends on several factors:
- The home owner has to display some type of financial hardship. They must submit past tax returns, bank statements, brokerage account documents, etc. Based on their review of a person’s specific financial situation, the lender will give preliminary approval for a short sale.
- All offers on a home in a short sale situation must be approved by the lender. While the person selling the home may agree to the offer, the lender must also approve the sale and agree to remove the lien. Getting approval from the lender can be a very time consuming and involved process. The biggest time consuming part of this process is getting the contract and associated paper work to the top of the stack. Lenders are dealing with so many short sales it is easy for your contract to get lost in the process. Once you are on the top, the lender will compare the contract price to a liquidation appraisal or similar value estimation. They will also compare the estimated net proceeds from this transaction to what they feel they would obtain under a foreclosure scenario.
Short sale transactions can take anywhere from 30 – 180 days to close. My experience this year is that the average is running close to 75 days. Given the drawn out nature of this process and the uncertainty associated with getting lender approval, many Buyers shy away from a home going through a short sale. As a result these homes are typically sold at a significant discount.
Foreclosure
When a home owner falls behind in their payments, the lender can initiate the foreclosure process to gain full title to the property. There are very specific steps the lender must take as they work through a foreclosure. In Idaho, this process takes a minimum of 120 days. If the home owner has been approved for a short sale, they can still sell the home during this time period. If at the end of this period, however, the home owner is still in default an attempt is made to sell the property at auction. Typically the lender places a minimum bid on the property at the auction. If there are no buyers at this price, the property is taken over by the lender and becomes what is referred to as an REO property or Real Estate Owned.
It is important to note that a home facing a short sale situation may not be in foreclosure. A home owner could very well be current on their payments yet still owe more on the home than it is worth.
Deed in Lieu of Foreclosure
There are times when a home owner is facing foreclosure that they may opt to sign all of their interest in the property over to the lender in exchange for avoiding a formal foreclosure. The benefit to the home owner is that they are immediately released from their debt and they avoid any of the public notoriety associated with the foreclosure process. The benefit to the lender is they avoid the timely process associated with a foreclosure.
While the above three scenarios are not very appealing, they are a reality of the times. If you have any questions, please do not hesitate to give me a call.
February 3rd, 2009
What’s the difference between a Condo and Townhouse?
Many of the people that I work with that are searching for home downsizing options are often a bit confused as to the differences between townhomes and condominiums (condos) and even use the terms interchangeably. Sometimes it’s hard to tell the difference by just looking at these homes. Well, at its most basic level, a townhouse is a type of construction while a condominium is a form of ownership.An individual condo owner holds title to the condominium unit only, not the land beneath the unit, the air above it, or the building the condo is in. This is why you most often see condos stacked on top of each other… because each owner individually owns only the inside of their condo, not anything around it. I often describe to prospective condo buyers that their ownership includes “from the paint on the walls and in”. All condo owners share title to the common areas of the development they live in. Common areas include land, the exterior of buildings, hallways, roofs, swimming pools and any area used by multiple owners. A property owners’ association usually manages the complex and collects fees from all condo owners in order to maintain common areas. One should always make sure to clearly understand the condo association dues and what they do/do not cover. 
Townhomes are usually a series of single-story or multistory units that are linked to each other by common walls. Townhome owners hold title to their units, the land beneath them and air above them… just like a “regular” home. This is why townhome units cannot be stacked on top of each other. As with condos, common areas are owned jointly by all townhouse owners. The property owners’ association usually manages the townhouse complex and collects fees from all owners in order to maintain common areas. Most townhome associations take responsibility for front and backyard lawn maintenance. While both condos and townhomes require less maintenance than other homes, condos usually require the least amount of maintenance because the entire exterior of the units is managed by the owner’s association. Of course “maintenance-free” lifestyle does not mean “free”. Condos usually have higher association fees than townhomes.January 23rd, 2009
Is Now A Good Time To Buy and/or Sell A Home?
In these confusing economic times, the question always comes up for those who are considering selling their home and/or purchasing a home. Is now a good time to move forward?
I believe the answer lies very much in your situation. For those who are renting and have good credit the answer is a resounding “YES”. Interest rates have never been lower, and with good credit, loans are still available. And prices of homes have not been this low in a long time.
For those who need to sell a home before purchasing, there are two types of situations to consider. If you do not have sufficient equity in your home right now, then it is probably best to be patient and wait until the market begins to appreciate again. If you do have sufficient equity for a down payment, this now is a good time to consider selling your home and purchasing another home. Although you will be selling your home in a “wholesale” market, you will also be purchasing a home in a “wholesale” market. If you are moving up, you will probably be able to proportionately get a better “deal” than waiting until a “normal” market where you will sell at “normal” market value and purchase at “normal” market value.
Whatever your situation is, if you are considering purchasing or selling, it is important to find a highly qualified Real Estate Consultant that can provide to you the up-to-date market data, and can advise you and protect your interests in the best possible way.
For a Free Update on the current market data for your neighborhood area , please click here.
January 23rd, 2009
Are you considering downsizing your home?
It is fairly well known that America’s population is aging, or “graying” to use a widely used term. There are currently nearly 90 million people in America that are over 55 years old. That number will double by the year 2030. Among the many life-changing decisions this group faces are should they, or how do they, downsize their home? Contemplating a move to a smaller home can be daunting from physical, emotional, and financial standpoints. There are so many questions that you need to ask yourself. What type of home should you look for… condominium, town-home, or patio-home? What’s the difference in these homes? What about Home Owner’s Association dues… do they really cover enough areas to allow you the low-maintenance lifestyle you crave? Who takes care of snow-removal? Where do I put my “stuff”? These are just some of the dizzying questions that need to be addressed.
One of the areas that are often overlooked is how downsizing a home can result in big decreases in cost of living. The cost of taxes, insurance, utilities, and home maintenance can generally be expected to decrease when you move to a smaller home. Are you currently spending too much money on maintenance and repairs and are you using/living in all of your rooms? Heating all of those empty rooms in your current home is probably not the best thing to do with your money. Downsizing doesn’t necessarily have to mean giving up the features you love about your current home. There are numerous homes available in the Boise are that can provide you with all the features you love in your current home, but eliminate the things you would like to live without.
For answers to your downsizing questions and to explore all of the options available to you, feel free to e-mail me at bhaycock@windermere.com and I will be happy to guide you through the downsizing process.
January 13th, 2009
ADA County Market Trends For October 2007 Through December 2008
Although it may not always be good news, knowing what trends are occurring in the real estate market is always valuable to the savvy buyer and seller. Here are the most recent real estate trends for ADA County in three important areas from October 2007 through December 2008: For Sale vs. Solds, Average Price for Sale & Sold Properties, and Months of Inventory.
The For Sale vs. Solds graph indicates the following: a -25% change in homes for sale, a -32% change in homes sold and a -15.2% change in homes that are pending.
The Average Price For Sale & Sold Properties graph indicates the following: a -13.2% change in average listing price and a -22.9% change in the average sold price.
The Months of Inventory graph indicates the following: a 10.3% change showing 12.9 months of inventory of homes available based on homes listed vs. homes sold.
For more detailed market data specific to an area, feel free to email me at Doug@BoiseHomeGuru.com and I will be happy to provide the market data you request.