Monthly Archives: June 2012

Displaced Homeowners Crowd the Boise and US single-family Home Market

Posted on by
Reply

Thanks to Andrew Propst, President of Park Place Property Management for this great info!

The housing market in Idaho and across the country is experiencing a transformation unlike anything we’ve ever seen. Working families are demanding flexibility over stability more than ever and the real estate market has begun to reflect that. Gone is the dream of a house with a white picket fence and a gold watch after working for 30 years at the same company.

Generations X and Y have different priorities from their parents. Employee tenure has shortened drastically and mobility and flexibility are important factors in making a decision about where to live. This need for flexibility has caused a noticeable shift from homeowners to renters. Throw in those who were financially devastated by the housing collapse and those who are timid to be home owners again and the number of new renters in the market is staggering.

There has never been a better time to own investment property, please contact us anytime for a rental market analysis on your clients’ investment properties.

A recent USA Today article provides quality insight on this shift. http://www.usatoday.com/money/economy/housing/story/2012-06-05/are-home-rentals-the-new-american-dream/55402648/1#.T-30HcDlzjo.email

To paraprase: Unlike traditional apartment renters, this new breed of American tenants is older and have kids, U.S. Census Bureau data indicate. As they move from homes they owned to ones they rent, they’re changing neighborhoods for better and for worse. They’re fueling a land-rush as investors snap up homes, mostly in markets hard-hit by foreclosure, to rent to them. And their growth — in cities from Florida to California — has implications for home builders, school districts and companies that will jockey for the dollars they used to invest in homes, predict Wall Street analysts and demographic researchers.

“We’ve never seen anything like this,” says John Burns, CEO of John Burns Real Estate Consulting.

The foreclosure crisis will drive 3 million former homeowners to rent single-family homes between 2010 and 2015, Burns estimates. That’s three of four homeowners who lose homes to foreclosure or other mortgage distress. The single-family home rental was the fastest-growing part of the rental market from 2005 to 2010, Fannie Mae says, citing U.S. Census data. Its continued growth is “unprecedented,” Burns adds.

“In the next five to 10 years, you’ll see tens of billions, if not hundreds of billions, of dollars of private equity” pouring into the single-family rental business”, says Justin Chang, principal of investment firm Colony Capital.

In the past six months, Colony has bought more than 1,000 homes to turn into rentals. Most are in Arizona, California and Nevada, though Colony expects to expand into Texas, Georgia and Florida. In the next year, it will invest at least $1.5 billion in single-family rentals, Chang says.

Val and I will be investing our savings in the Boise single family rental market this year. If you want to catch the wave, please contact us.

 

How much is my small horse property worth?

Posted on by
Reply

A past client contacted me asking about the value on his home on 4.6 acres just west of Kuna Idaho. I looked at recent real estate sale prices in rural areas of the Treasure Valley and I was surprised how few have actually sold or are currently on the market.

People who were in trouble have been forced to sell or walk away by now. The problem has been dealt with one way or another you can only hang on for so long. People with cash are stepping up now because the consensus is that prices have started to rise again all over. But a rental on four acres is not a good investment property and it’s the investors who are fueling the market. In a time where condos are selling fast in the once disastrous Miami housing market, cash investors are pouring in from all over the globe into places like San Diego but not the Boise area.

People still love their horses and their elbow room so how is the demand for small horse properties? In a word – FLAT.

Banks have gotten stupid in the other direction now, predictably, so it’s tough to get a loan. Warren Buffet said recently that if he could, he would buy 100,000 single family homes in America. (I think perhaps his board of directors might pitch a collective fit if he did) He also said that hormones will push the housing market out of the doldrums. He went on to explain that young, first-timers will get sick of living with mom and dad and want to start families.

For now, small horse properties remain a bargain.

Boise Housing Market for May 2012

Posted on by
Reply

Sales are down 6% from last month and unchanged from this same month last year.

Pending sales are up 8% from last month, and are up 26% from a year ago. The shift to New Construction in Pending status continues this month.

Distressed sales were down this month. Short Sales were 18% of the total sales this month. Record high 1/12 23%. REO sales were 9%. Record High 12/10 at 40%. That makes 27% of the sales “distressed” this month. Record high was 12/10 at 61%. This is the “healthiest” month in terms of the highest % of Equity sales since 11/08!

Short Sales closing success holding at 16%. Many challenges still exist but with the number of REO’s approaching zero, investors seem to be willing to struggle through and buy short sales. 12/10 high of 22%. Low 1/10 at 10%.

The dollar volume was up 7% from last month and up 21% from this same month last year.

Year to date sales are up 8%.

Median Sale Price up this month to $179,900 – up 13% from last month and up 26% from this same month last year.

New Construction Median Price up this month to $224,567. This is a 16% gain from last month and a 0% increase from this same month last year.

Resale Median up this month to $165,000. This is up 12% from last month and a 22% increase from this same month last year. Record low 01/11 at $126,500.

Inventory is up 4% from last month but 24% lower than last year at this time.

New Construction inventory up – 548 from 545 last month. Last year at this time there were 597 new homes for sale. New Construction inventory has dropped for 49 of the last 68 months since reaching a high of 1890 September 2006. Record low was 12/10 at 503.

Resale inventory is up – 1458 from 1381 last month. Last year at this time there were 2043 resale homes for sale. July 2008 was the all-time record high at 3920! July 2005 was the low point in resale inventory at 657.