Dale Alverson

Hello everyone! This month I thought I might try sending an email rather than a newsletter. As many of you know by now -Team Boise is now at 43 Degrees North Real Estate. Recently I have written several blogs regarding: Current Boise Market Conditions - Buying Short Sales v/s Foreclosures - Buyer Representation and most recently a response to one of Debbie's clients who was so frustrated with the market that they decided to do nothing! (Click here to view these blogs)

Today I want to give you a gift and it is free, and there are no strings attached. The Gift is Knowledge and as you know Knowledge is power! Today as your 401K accounts have reached 50% of their value from last year and you ask yourself is their any hope - the answer is YES The answer is FORECLOSURES! The absolute best hedge against the inflationary cycle coming - is going to be Real Estate. Real Estate got us into this mess and it will be Real Estate that gets us out of this mess.

Today you can buy Bank Owned Property for 20+% under the current deflated market pricing. Here is an example: Last month we penned a purchase for one of our clients for a New Construction Home - 2740 sf with 5 bedrooms 2.5 baths + a den + a bonus room - with a 3 car garage - with $20,000 worth of upgrades for $229,000 Quite a deal right? - Well today I found the same exact home with similar upgrades on a Bank Foreclosure for $189,000 ASKING PRICE! ...and we can probably get a $180k-$185k offer accepted - The above example is one of many that are out there ...and we can find them in all price ranges.

The point I am trying to make is that their is good money to be made in a down market. Fear in the market place provides advantages for people who are willing to take researched calculated risk. A recent article in the Idaho Statesman by a national economist suggested purchase of Rental property as the best hedge against the coming inflationary cycle that will surely follow this deflationary cycle. Our market here in the Boise Valley in homes under $300k has bottomed out and is starting a slow comeback.

Many of my clients are under the false assumption that the stock market is going to rebound in a few years to 2007 levels. What you need to understand is in order to get back to where you were in 2007 the DOW will have to reach above 28,000. Stock in a normal market only averages 10% per year. Translation: 20 years of an average market to get back what you had in 2007!

By contrast Real Estate historically doubles every 10 years. And the biggest difference of all.....Stocks can go to ZERO....and many as you know have! They are not tangible assets. Real Estate on the other hand is tangible - underneath all is the land and it's not going anywhere. Even in a depression - people have to live somewhere - The other interesting facet is even as Real Estate values have swept through the ceiling and dropped to the bottom - RENTAL Prices have stayed within 10% over the last 20 years!

I'm not suggesting by any means that it is time to rush out and buy just any foreclosed property. That would be as foolish as it was in the boom years. What I am suggesting is avid dedication to looking for the gems in this depressed market and taking advantage of the opportunity before the inflationary cycle starts. Once the inflationary cycle starts it will be too late to advantage the market - Interest rates will increase to try and stifle the inflation, and property values will inflate and the cost of manufacture and fuel prices will drive everything over the top.

I realize you are thinking " why are we worried about inflation now in a deflating market?" Because we are bottoming out....and the US Govt. has just put the nation 5 Trillion dollars deeper in debt that we don't have the money to pay back!. The dollar is bound to deflate which equals Inflation. Inflation is not a question - it is a certainty - you can count on it - You can't get out of debt by borrowing more money - Unfortunately many of us can personally attest to this! - If it doesn't work for us - it won't work for the Government either.

Bottom Line: Do whatever it takes to take advantage of Bank Owned Properties that are currently 20%+ under valued. If you have to roll over your 401K plans do it - if you have other monies that are setting idle - move them into targeted Real Estate - NOW! Waiting is not an option - Waiting will be detrimental to your economic health! Please understand - not all Bank owned Properties are worth buying even at huge discount - we still have to be proactive and selective - that's why you have me - to show you the right path - the best choices - and to protect your investments - It is what I do 24/7-365 days a year! Like I said in my response in my latest blog:

At the end of the day - the bottom line is you are gambling either way. You can choose to gamble with your fear and frustration and do nothing - or you can gamble with your faith and hope and the best information available and go forward. We believe in.... and provide the latter - The choice is always up to you!

Dale Alverson CBB,CRP, ABR, e-PRO

43 Degrees North Real Estate www.43RE.com

35 year Career Realtor

20 year Certified Buyer Broker Designee

35+ years Representing Clients - not sales!

Free 1 Hour Consultation upon request

Direct cell 208-863-3093

www.teamboise.com
dale@teamboise.com
Toll Free 800-359-0855

Comment from a client:

Sorry for not getting back with you, we have been kind of watching the

market and continue to see prices drop. We have decided just to wait.

I am just thankful that I have a nice house with equity. We will keep

you posted if things start to improve with time.Thanks for your help.

Sorry to see that the house we liked so much sold but that's good for

you and for the builder. It is a beautiful house and will make a

wonderful home for that lucky someone.

Mike

Response:

Mike,

I can certainly empathize with your feelings and sense of the market. With the Media's constant advertising of Gloom & Doom and the New President saying the word "crisis" 25 times during his address to Congress, it is a wonder anybody gets out of bed in the morning!

With that said I need to make you understand the dynamics of the actual situation we are in. 1st of all we need to analyze why the President appears so negative about the economy. He needs to sell the Stimulus package and the ONLY way anyone is going to sell the American Public on a 2 Trillion Stimulus Package and a 3.5 Trillion 2009 Budget, is to make the country believe that if we don't pass it , we are a doomed Nation. Once this legislation is approved and passed you will see a more positive note coming from Washington and the Media. ...and we will see what is going to appear like a start of a recovery.

We are entering into a Window of opportunity to get into your ideal home in the next 12 months before the start of massive inflation which will be the by-product of massive deficit spending.

So here is what I believe is current Reality of Real Estate in our regional area:

Home prices in the "Starter Home Market price range of $100k- $200k have bottomed out. Homes in the $250k - $350k range are nearly bottomed out and are still soft with negotiations still a reality. Homes above $350k are likely to continue to deflate as much of the National economy.

The Boise Valley while not immune to Recession is still one of the brighter spots economically due to it's make up of largely "Service Sector jobs" In other words our economy is not linked to one or two Mega Corporations but to many smaller Service Sector jobs. People don't move to Idaho for high wages and big corporate employment. The majority of people move to Idaho to escape the big city environment for a more normal and higher "quality of life". This has been our reason for growth in the past, and will certainly be our "Silver Lining"even more so in the future, as California's economy and liberal welfare state collapses around their shrinking ability to fund all of their liberal programs.

The result of these dynamics provides us a unique window of opportunity to take advantage of the current economic conditions: Your current home being in the lower price range will stand the best chance of selling for the least amount of discount. It also stands the best chance of selling now with the Stimulus Tax Refund being appropriated by Congress at this very moment. Your move -up home will never be built cheaper than it can be today. Building materials and contract labor are at 1990 pricing. Lot prices have been reduced by 30%-50%. The bottom line and the advantage for you is that New Construction prices are as low as they are going to get. To wait for market to improve will be counter productive, and when it does, the cost of New Construction due to inflation will certainly out pace the appreciation of your existing home. Waiting is a no win situation in our Boise Valley Economy.

Inflation is inevitable due to the massive creation of debt/money which our Government does not have, nor is our economy backed by Gold. Economists will all tell you inflation is coming no question. History will tell you that with inflation comes higher interest rates to try and control it. This is why I am telling you to take advantage of all of these temporary conditions while they are still available, before they disappear.

Today you can easily sell your home with the availability of low rates and Government Tax incentives for first time buyers. (a short term window)

Today you can easily purchase a "New" current "state of the art" home at yester- year price in a high quality area. (a short term window)

Today you can receive one of the lowest interest rates in the last 40 years. (a short term window)

Waiting is always an option, however it may turn out to be a poor option when confronted with the facts of this massive changing economy. Waiting to see the future is missing the present. Opportunity is always in the present. They say hind site is 20/20 and always easy. Foresight is for gamblers and risk takers and is always hard. Winners use hind sight for history to forecast the future - then take acceptable risks to take advantage of dis-advantaged situations.

As Professional Real Estate leaders with over 3 decades of experience, we do not have a crystal ball, however we are in the forefront - the trenches of the market - and we have the best view of the future. From this vantage point it is clear that the greatest time of opportunity is in the midst of a bottoming market - before the recovery.

At the end of the day - the bottom line is you are gambling either way. You can choose to gamble with your fear and frustration and do nothing - or you can gamble with your faith and hope and the best information available and go forward. We believe in and provide the latter - The choice is always up to you!

Dale Alverson43 Degrees North Real Estate

35 year Career Realtor

20 year Certified Buyer Broker Designee

35+ years Representing Clients - not sales!

Free 1 Hour Consultation upon request

Foreclosure Versus Short Sales - What's the difference for Buyers?

This is a common question that I am often asked. The simple answer is a foreclosure is a property that title has been taken back by the lender, and is now Bank or Lender owned. The previous owner has no connection to the property. The lender now becomes the sole owner of the property and retains the sole discretion as to the offer amount they are willing to accept. There is NO EMOTION. It all comes down to the offer they have in front of them today, and if they believe they can get a better offer by waiting and incurring continuing costs in maintenance & taxes. Generally they will respond much quicker than will a short sale that can take 6-8 weeks to hear back. The other difference is in how Bank or Lender owned property is marketed. In Bank owned property, a Broker Price opinion is ordered and or an appraisal. Once those are received a sales price is established and the home is marketed at that price. If you make a full price offer you can be assured that you can actually purchase the home at the listed price.

By comparison, a short sale is a property that is delinquent and is danger of a foreclosure, however the deed has not yet been returned to the lender, and the owner is still in title. The current owner in title has made a request to the lender to take less tha what is owed in lieu of taking the home into foreclosure which can be a lengthy process taking 6 months to a year to achieve. The lender will agree in most cases to CONSIDER a short sale however will not commit to a sales price until they receive an offer and have received a Broker Price Opinion. They will in most cases not order the BPO until they receive an offer to purchase. Then while the potential buyer waits for the BPO they continue to take offers and the whole process turns into a type of silent auction where the buyers wait to hear. Often there are several offers on the property as the Listing Realtor tends to market the property at sub normal market evaluations thereby generating many offers. In the end , the best offers are tendered 1st and the rest of the potential buyers wait 6-8 weeks only to find out they did not get their offer accepted. Usually after 1-3 failed attempts, most potential buyers become discouraged at the inability to generate a home purchase and end up looking for real homes that they can actually purchase.

"Team Boise" at 43 Degrees North Real Estate, does not recommend or encourage buyers to consider short sales as an acceptable way to purchase Primary Housing. Foreclosures are much easier to purchase and negotiate than short sales, and generally can produce better results with far less grief and confusion. We only recommend Short Sales as an option for Investors who are willing to write multiple offers over a extended period of time and pick up a few homes out of several offers. Nationwide only about 1% of Short Sale offers result in closing.

Dale Alverson is the Director of Relocation at 43 Degrees North Real Estate and is Idaho' only Certified Buyer Broker designee. Please email or call Dale direct at 208-863-3093 for answers to your Real Estate Questions and concerns about Boise and the surrounding towns of Meridian,Eagle,Star & Kuna.

Short Sales seems to be the New BUZZ Word in Real Estate now days. It seems every client and everyone I run into wants to talk about what's the deal with "Short Sales".

Available to the public for Free Consultation by appointment.

35+ years Representing Clients - Not Sales! 2028-863-3093

Boise Real Estate Market - Half Full or Half Empty

OK, OK, I know "the Market is in the toilet" and the sky is falling & Blah Blah Blah-

Let's talk Reality V/S Realty

Boise Valley Inventory in 2009 is Down 10% in numbers and 25%+ in price from 2008 at the same time

Yes the "Media" will leave you to believe that - DOOMSDAY HAS ARRIVED - However the truth of the matter is that while the Boise Idaho market is indeed off from the anomaly years of 2004-2006, It is not that far off from the pre 2004 Boise Idaho market, which everyone agreed upon was a "Good Market" just 5 years ago. The constant onslaught of the media expounding on the negative actually makes the market worse than it is in Reality.

The truth of the matter is the Boise Idaho Valley area is still growing, which translates into lower than National unemployment rate, and is one of the more stable economic environments in the country.

It is quite true that the Market is in general, a definitely abnormal over-supply condition. It is also true however that the inventory has been reduced by roughly 10% in the Boise Valley Real Estate market in the last 12 months. Unfortunately the "Media" does not focus on the positive improvement because they believe it doesn't sell. They know from past history that negative news may not be "good news" (however as unfortunate it may be), it does sell newspapers and it does increase Television viewership. Hence the negative news media does indeed control or at the least heavily influence the public's decision to purchase or not to purchase, based on the belief that what they hear and see is true. Unfortunately this influence is felt not only in the Boise Idaho and Valley Real Estate Markets - it ripples out through the rest of the discretionary spending market to a similar degree, causing the entire local economy to falter.

The Reality of the Boise Market is that it is absolutely the "BEST" Buyer's Market that we have experienced in my 35+ year career! The selection is fabulous by any standard - The interest Rates at an All Time Low 4.5% range Fixed Rate - and last but not least almost everyone is willing to negotiate a lower price by 5%-20%+ .... oh and did I mention concessions - well what do you want? help with closing costs? All of your closing costs? Refrigerator? Washer & Dryer? furniture? the car in the driveway? the dog? Name it and you have a very good chance of getting it!.... What is not to love about this Boise Valley Real Estate Market? Oh yea that's right ... "the Media" thing about the sky is falling ...blah ...blah....blah

The other significant fact being overlooked by the media and the media followship is the impact of the very unusual exuberant Winter as well as the National Economic Bad News contributing to the Reality of Sellers feelings of desperation and depression about the ability to sell their homes. Couple the above mentioned Real Estate Market conditions with Seller desperation/depression and you get the "Best Purchase Power" that you may witness in the next few decades. Again have you read/heard anything about this in the Media? No of course not. By the time you hear about it in the media, you will have already missed a lot of the gain and profit that are sure to come from the results of the after life return of the Boise Valley Real Estate Market.

Now let's address the unfortunate sellers predicament ...... or is it? Again what will the media tell you? Don't sell unless you absolutely have to - It's a terrible time to sell - Short Sales climbing - Foreclosures - Prices dropping with no end in sight - the sky is falling - blah blah - blah Let's again turn to REALITY - If you are a move up buyer and say you own a $200,000 home and it is time to purchase a larger home because your family has grown. If you listen to the "Media" you will stay put because you can't bear to lose all that money in a "Bad Real Estate Market, so you do nothing .....but lose more! How you ask? OK lets look at facts: The more expensive the home - the larger the discount. $200,000 homes are currently discounting marginally by comparison at about 5% or less than asking price. - say $5,000 - $10,000 off. Now let's look at $400,000 homes which are currently discounting 5% - 8% - say $20,000 - $32,000 off. So what if you give up $10,000 - if you get $20,000 - $30,000 off on your subsequent purchase? OK .. so let's say you have to sell the $400,000 house and give up $30,000 - that's a lot of money unless of course you are going to buy a $600,000 home for $500,000 - $550,000 Compare a savings of $100,000 to a loss of $30,000. If someone told you to sell $100,000 of bad stock for $70,000 you would probably not do it ...unless of course you knew the $70,000 could buy you $150,000 worth of more valuable stock. In other words - It's all Relative -

So who should not sell Boise Valley Real Estate? Anyone who is in a move down market is going to suffer or anyone who is not going to repurchase at a higher value should probably not sell unless they have to or can't wait for 12-18 months for the return of the normal Real Estate Market.

The opportunity to make a lot of money in Boise Idaho and Boise Valley Real Estate is here now today! Within the next 12 months there will be countless opportunities to invest in your next home ... at yester-year pricing... Pre - 2004 Pricing in many cases... and at phenomenal interest rates with enormous selection for those willing to swim upstream against the media flow, and step out and take advantage of a very unusual and temporary condition in the Boise Market.

Dale Alverson is a 35-year career Realtor and is the Relocation Director at 43 Degrees North Real Estate. He is Idaho's 1^st and only Certified Buyer's Agent as well as one of three Certified Relocation Professionals in the Valley.

If you have questions or comments about your options in 2009 in Boise Real Estate (whether to buy, sell, remodel, or just stay put and do nothing) please feel free to contact Dale at your convenience for counsel and a free consultation.

Best wishes from Team Boise for 2009 - Happy Real Estate

43 Degrees North Real Estate Dale Alverson - direct cell 863-3093

35+ years representing Clients not Sales!