Jeff Martel

It seems like the general topic of discussion at the Holiday parties of late is the preverbal "are we at the bottom" conversation. I for one am excited that the topic is finally becoming part of general conversation. I told my agents about 8 months ago that things would start to get better when we start to see the media begin to print positive articles - like this one from the NY times - and when the general topic of discussion moves from how "bad" everything is to "are we at the bottom?".

The Boise, Idaho Real Estate Market hasn't been near as bad as what has been going on in other areas - but it also isn't exactly stellar. It's probably just back to normal at this point and it is taking all of us in the industry a bit of time to get used to it. But, positive signs are all around us. Recently, the Wall Street Journal printed a large article on Real Estate (sorry I can't link to it, but I have a scan I would be happy to email to anyone interested) where the Journal specifically pointed to Boise, Idaho and Albuquerque New Mexico as the 2 places where appreciation will outpace the rest of the nation over the next 10 years! To me, that was the true ringing of the Bell that says we are at a bottom and it is time to get in.

It is common knowledge that it is near impossible to time a bottom - by the time you know it, it already has passed. So, I can't say now is the bottom but I can say I see these 10 reasons that the Boise, Idaho Real Estate Market is at or near a bottom:

1) Prices are truly great right now. Being December as our worst Real Estate Month (weather and holidays collide to make selling tough), and coming off 2 years of a tough market - we are at the point where prices have come down about 19% overall

2) The Feds will be introducing a massive Housing Stimulus in the next few months - Stimulus = price increases at some point

3) Money is cheap - it's almost a no-brainer to borrow money right now because the return on that money should outpace the interest carry

4) New construction prices are unsustainable - what the market is paying right now is less than what it costs to build - the builders have completely stopped production so no more supply - as supply dwindles - demand will go up - thereby prices go up

5) There is still a large in-migration of people to the Treasure Valley and Idaho as a whole - as more people come, and less product is built to meet the needs - then supply vs. demand kicks in once again

6) I have no ability to prove it, but in talking to some of our government and economic focus folks - some large and medium scale employers ARE relocating operations to Boise, ID - They won't tell us who because it needs to stay cloak and dagger until the company itself announces so their competitors don't know what they are up to. - The question still remains as to when this will happen - but I am hoping it is soon!

7) Boise State University has put us on the map - GO BRONCOS!!! Check out the SMURF TURF here.

8) The creation of our new community college system all but guarantees large scale employers will be looking at our Valley with renewed interest - strong education systems = educated workers for the high-tech industry

9) The Internet has made high-level consulting companies free to relocate to where quality of life is the best - and Boise, Idaho has the quality of life that so many are looking for - no longer do you need to live in the "Big City" - I think this technological revolution that we are all living in right now is probably the single most humankind changing event - and we get to be part of it!

10) Transaction volume is way up in feeder states like California - As folks can get out of larger markets - they will flock to markets like Boise, Idaho - where quality of life is good, unemployment is low, crime is almost non-existent, and guess what - you actually know your neighbors here!

So, that's my view on the current state of opportunity in our market. What do you think? Tell me about your market and what you see happening.

<!--StartFragment-->Everything you ever wanted to know about distressed properties but were afraid to ask.

Below statistics were complied using MLS data. I did not scrub the data or check every single listing, so accuracy is implied but not guaranteed.

Ada County

Currently there are 5209 total Active listings (4156 Single Family)
Currently there are 1087 Active new construction listings (790 single family)

Currently 659 Active Short Sale Listings (Average price of $260,424 – Average DOM = 103)
56 are new construction
20 are less than 1 year old
290 are 1-5 year

Currently 104 Pending Short Sales (38 of the pending short sales were added this month)
7 are new construction
4 are less than 1 year old
48 are 1-5 year

Since Jan 1, 2008 there have been
5384 Sales (4753 single family)
1338 Sales were New Construction (1213 Single Family)
210 were short sales (39 New Construction, 30 single family)


Foreclosures for Ada County current list 11-25-08 (source Realty-Trac)

1169 Properties in pre-foreclosure (on 11/6/08 there were 1,200)
803 Scheduled Auctions (on 11/6/08 there were 379)
534 Bank-Owned Properties (on 11/6/08 there were 526)

Boise Only
521 Properties in pre-foreclosure (on 11/6/08 there were 544)
331 scheduled auctions (on 11/6/08 there were 131)
213 Bank Owned properties (on 11/6/08 there were 205)


My thoughts:
Short Sales represent 12% of the current active listings
Short Sales represent 3.9% of the sales so far this year
Bank Owned represent 10.25% of the active market (this isn’t exactly accurate because not all bank owned properties are listed but I counted them all for this purpose)
New Construction Listings represent 20.8% of the active market
New construction sales represent 24.8% of the sales so far

In all the numbers above I see a slight balance starting to form. Although new construction sales pace is WAY off historical marks, the listings to sales ratio over all is looking healthier. Short sales are not a huge number in these stats, although I assume the numbers will increase over the coming months. There are still at least 6 months ahead of us before Foreclosures peak, but that could be tempered over the coming months as I assume short sales will be more of a dominate factor over the next 90 days of sales. People who do not “need” to sell will remove their properties from the market which will leave the “have to sells” as a majority of active listings. This may also slightly bode well for new construction as there will be less competition.

The above statistics are complied from MLS data and Realty-Trac. Although the data may not be exactly accurate, it shows a decent picture. Not all pre-foreclosures will end up being Bank Owned – some will short-sell before they are foreclosed upon. The Bank Owned market is hard to track as it is not a searchable field in the MLS. Not all bank owned properties get listed so those numbers don’t get into the statistics either – but I would estimate a majority do end up on MLS.

I see the next 3 months as our best opportunity for “purging” of the market. Savvy buyers and investors are out right now. As long as we do not experience a large lay-off event from a major employer, the next 90 days of sales will probably be more heavily oriented to distressed properties. Our spring market should then be more stabilized as the ratio of distressed properties becomes a smaller percentage of the overall market – as long as distressed properties as a whole begin to trend downward.

Wild-cards to look for:
Our government has become drunk on spending. They are now feeling pressure to do something for “main street”. I predict that there will be some sort of Foreclosure relief in the form of the Government taking equity partnership in homes and resetting loans or they may just suspend foreclosures for a time period. We may also see some government sponsored incentives for purchasers – either an interest rate buy-down program or a tax credit (the current tax credit loan did nothing and the government knows this – it will be more like an actual rebate, not a loan). There also looks to be some Massive stimulus package from the Obama camp. Probably an infrastructure rebuilding campaign and possibly some sort of spending stimulus to jump-start the economy.

Whatever they do, the effect on housing will be positive for the short term. People are afraid to commit to large scale purchases right now. The governments actions will probably be massive enough to jump-start consumer sentiment enough that people will begin to buy again. Any incentive through rates or credits will probably be a short-term opportunity which will jump-start buying and reduce inventory levels further. We may also see a supply imbalance by summer 2009 as New Construction starts nation-wide (as well as locally) are considerably down. The US adds approximately 3 Million people per year and we need 1 Million starts per year to keep up with demand. Starts nationally are on track to be under 800K (20% off) so at some point supply vs. demand functions will kick in to get things rolling in a positive direction again.

The news and reporting are probably the biggest wild cards to watch. Once a general “good feeling’ washes over the media we will see that emerge in the general populous as well. I would predict that as the Obama presidency begins, the news will become more upbeat. The “honey-moon” period for this new president will probably be quite long and very positive. I assume the media will be attempting to look on the bright side of things for some time to come – this in turn will be great for our industry. Baring any large-scale calamities, I predict an overall good-feeling will emerge in spring or summer 2009 with appreciable stability coming to the housing sector by the end of 2009. Gains in housing will probably not begin to happen in our area until 2010 unless we get a large-scale employer to relocate to the valley. I see job stability coming spring 2009 as the economy as a whole should be propped up enough by then (they seem to be printing enough money at this point to make that happen!).

Let me know if any of this isn’t clear or if there is more information you would like! <!--EndFragment-->

Hi all,

I have a 22 acre horse ranch listed in Emmett, ID and I am looking for ideas on how to target market to the horse enthusiast crowd. Does anyone have any recommendations for websites or publications that have worked in the past for marketing horse property? The home is great, shows perfectly, and the property is amazing. The price is right and the location is very much what you would expect when dreaming of an escape in Idaho - it is private and peaceful. So, it's making me a bit nuts that it hasn't sold yet so I think a targeted marketing approach to horse enthusiasts might do the trick. Any ideas?

Here is the listing for reference (Intermountain MLS # 98363553): http://www.43re.com/default.aspx?id=IMM0020&pageid=2&systemID=2&subpage=detail&searchresults=default.aspx%3fid%3dIMM0020%26pageid%3d2%26systemid%3d2&mls=98363553

These days every penny counts. I can't waste money and neither can any of my agents. So, what are you doing to effectively market and not break the bank? It's funny but right now I feel really good about Craigslist. You can't beat the price - free - and it works. I get leads and people do respond to the open house listings.

So what are you doing? I know it's probably a closely guarded secret, but sometimes sharing is a great way to get that warm, fuzzy feeling!

We are living in amazing times right now. What happens over the course of the next few months will definitely effect our lives for years, if not decades in the future. I am becoming concerned that the Government and Corporations are gaining a foothold into the control of personal property rights in the country. What makes of a free society believe it or not is the right for the citizens to own property. The power of the government and large corporations is balanced by our freedoms. Our freedoms are directly attributed to the fact that we own property and on the property we can do as we please (for the most part).

When the Government uses these amazing times to swiftly take ownership stakes in our Banking and our Lending institutions it causes me concern. What will property ownership look like 10 years from now? Will it change? Will the Government decide who can own a home? What happens if homeownership becomes reserved for only a select few?