Bad News V/S Good News -
Sometimes I wonder if someone published a newspaper with just Good News - Would anybody buy it? Apparently not because all of the media focus is always on Bad News.
As a tribute to the New Year, I would like to focus on the Good News in Boise Valley Real Estate. The numbers suggest we are near a post 2004 Real Estate Market in terms of monthly supply of homes on the market. Our supply for average price - size homes 1500 - 2500 sq ft (which comprise the bulk of sales), ranges from a 6 months supply in East Boise to 9 months supply in West Boise. Eagle has about a 12 month supply, while Meridian ranges from 10 months to 15 months depending whether you are South of the Freeway or North of the Freeway.
While these numbers are becoming close to those of the Post 2004 market in terms of supply, the silver lining is in terms of seller motivation caused by the perception of the media in general. The result is a much stronger "Buyers Market" than we had post 2004.
Another interesting statistic is that in 2004 it took about 21% of an average families income to purchase an average price home. By 2006 it took 38% of a families income to purchase an average home in the Boise Metro area. Today that figure is down below the 2003 number to about 19% of an average families income to purchase an average home. This is incredible GOOD NEWS! Not only is the ratio down to the post 2004 numbers - the ability to discount is much higher than in the 2004 market when it was a Seller's Market. Today is definitely a Strong Buyers Market.
In short it is easier today to buy a home in the Boise Valley at greater Discount with lower interest rates than in 2004 when we had a Great Market!
The only problem today is Perception which is a buyer’s ally and a seller's enemy. Simple Translation: The time to purchase Real Estate here locally in our Boise Market is NOW!
For the conservatives who wait to hear it in the Media before considering a home purchase be advised that you will spend more and get less both in terms of Home Value for your dollar and in loss of interest rates that can not sustain at today's sub 4.5% levels. A 1% difference in interest rate translates to over $23,000 in purchase power - Think about it - a 6 month delay could end up costing a conservative thinking rational person $5000 - $10,000 in purchase negotiations alone + $23,000 in Interest rate purchase power or over $28,000 - $33,000 by waiting to hear from the media that the local Market has indeed bottomed out.
Let's look at my latest two examples of Purchase power for two of my clients the first week in January 2009:
Client A purchased a New Model Home in an upscale SW Boise Community (Tuscany) 2736 SF with all upgrades (Slab Granite - Tons of Hardwood - completely landscaped, fenced, all window covering, all appliances including pedestal washer & dryer, & surrounded by common area on 2 sides) for under $300,000 with a 4.5% 30 year fixed loan. Anybody you know in the last 5 years get a deal like that? Me neither!
Client B was looking for an average family home 2000+ sq. ft. for $200k - $240k with hopefully 4 bedrooms. We looked at over 15 homes we had previously screened from 75 possibilities and came up with an unusual 2500 sq.ft. home in West Boise in a good sub. It had a sub standard floor plan but it did fit their needs with an extra 5th bedroom and bonus room that they had not expected to be able to afford. The asking price was $249k and we offered $220k. The seller was not able to accommodate our price so we looked at a build job and were able to build a 2743 sq.ft. home with $15000 worth of upgrades for $225,000 including a large lot with 5 bedrooms + a Den + a Bonus Room and a 3 car garage....and a 4.65% loan with ONLY 1.5% down. So tell me again how bad times are in the Boise Valley! I guess I'm not seeing it. but of course I'm not getting my information from the Media - I'm out creating the Good News!
Call today and pick yourself up some GOOD NEWS!
35+ years Representing Clients - not Sales!
Dale Alverson
Certified Buyer Agent
Relocation Director
43 Degrees North Real Estate
863-3093 800-359-0855
TIME TO INVEST in Boise Valley Real Estate ?????When would you say is the best time to invest? at the bottom of the market or at the top of the market?
The question is obvious, however what is not obvious is when - where is the bottom.
When & Where are the key components separating the smart investors from the herd. We all understand the "herd" principle - wait until everyone is doing it and jump in right? That would be those that jumped into the market in 2006 -2007
For those of you that are waiting for the return of the 2004-2006 market conditions that propelled 20% - 30% + appreciation per year - forget it - not here - not now and probably not again in your lifetime. That was what is called an anomaly - an abnormal set of conditions that are not likely to prevail again.
OK so now what?
Let's check back in on Reality - From 1982 - 2002 Real Estate in the Boise Valley appreciated quite consistently at around 3% - 5% per year. This meant that if you owned a $150,000 home you were receiving added value at the rate of about $4,500 per year more than your neighbor who was renting. If you were the landlord, your renters were paying off your mortgage and providing you with a $4,000 + savings account that was probably more than you could save from your paycheck.
Then came the "herd" and everything went crazy and now of course the aftermath.
So now let's get back to that question about when and where is the bottom of the market? Wouldn't it be nice to invest at the bottom instead of the middle or top?
Those of you that have been listening to my advice about the Boise valley Real Estate over the past several years may remember that I have constantly advised you that SE & East Boise properties have always been the highest appreciating properties during times of appreciation and conversely during the rare times of depreciation have seen the least depreciation. This is not an accident or an anomaly; it is simply a result of supply & demand.
So Now you have one of the answers to "Where" ..now about when .. the answer: the 1st quarter of 2009.
Now let's talk about HOW
1. It is probably the absolute "Best" time to consider selling your existing home at a discount and buying your move up home at a greater discount. + pick up a better location with enhanced appreciation and less commute ( consider gas in the future at $5 a gallon in this equation and calculate additional savings)
2. This would be a great time to consider moving your Retirement account into a "self directed Real Estate Trust" and investing in prime locations with stable conditions. If you don't have enough money in your retirement account to purchase outright you can use your 401 K or other retirement funds for a 30% down payment and let the lessee make your payments.
When considering Real Estate investment you should plan on 20% - 30% down for positive cash flow in the Boise Valley unless you need negative cash flow for tax purposes.
This is probably the best "Buyers" Market you will see - don't let the media hype deter you from making sound decisions. I am certainly not advocating that you can go out there and just jump into any short sale or foreclosure because it's a "steal" It is a great time to make careful and extremely selective choices - It is not a slam dunk by any measure, and I certainly do not recommend any purchase without carefully analyzing your own unique situation and tax and investment strategy.
Dale Alverson is a career Realtor with43 Degrees North Real estate, A Certified Buyers Agent, an Accredited Buyer Representative with 35+ years representing client's interests - not sales!
Dale can be reached at 208-863-3093
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