Boise Real Estate Blog

How Higher Interest Rates Affect Payments

We’re all spoiled rotten by today’s low interest rates.

But, our current interest rate environment will not last forever.

Our national economy is slowly improving and we can probably expect higher interest rates in the not too distant future.

Curious about how higher rates will affect monthly payments?

Here are some comparisons of monthly principal/interest monthly payments at varying interest rates, using a $200,000 30-year fixed rate loan:

• $200,000 @ 3.5% = $898.09
• $200,000 @ 4.0% = $954.83 (+6.3%)
• $200,000 @ 4.5% = $1,013.37 (+6.13%)
• $200,000 @ 5.0% = $1,073.64 (+5.95%)
• $200,000 @ 5.5% = $1,135.58 (+5.77%)
• $200,000 @ 6.0% = $1,199.10 (+5.59%)

As you can see, your interest rate is probably more important than the price you pay for your home.

If you wait to buy a home until rates rise from 3.5% to 6.0%, your monthly payment jumps from $898.09 to  $1,199.10 ~ a 33.5% increase!

Worse yet, that payment difference totals $108,363.60 over the life of the loan!

If you wait to buy until prices AND interest rates have risen, you could easily get priced out of the market.

In our current market, it’s a good idea to focus on your financing more than the price of the home.

May 21st, 2013 Posted in Inside Real Estate |  Print This Post | No Comments »

Builders Facing Severe Lot Shortage

I’m currently working with several build-job buyers and builders are telling me that their #1 challenge these days is finding an available finished lot.

You’d think our market would be awash in lots following the downturn of the past several years, but that’s not true.

Most subdivisions have no available lots and waiting lists for their next phase.

Lots in foreclosed subdivisions have mostly been absorbed.

There are numerous new developments going in, especially around Eagle, but those lots will be created on recently-purchased land acquired at today’s higher price.

And, development costs for infrastructure are increasing on top of higher land costs.

My best guess is that lot prices are about to take a big jump in the near future as those new lots come online.

Those higher lots costs will inevitably lead to higher home prices.

If you’re thinking about building, better get going on it this year!

May 20th, 2013 Posted in Inside Real Estate |  Print This Post | No Comments »

Weird Real Estate Stuff: IRS Lien Kills Sale

Back in the 1980s, in Roseville, California, I was working with a young builder who wanted to buy a lot and build a spec home.

Even better, I had a buyer lined up for the home he planned to build.

We found a nice lot for $36,000, got it into escrow, and my builder/buyer signed final papers as we prepared to close on the lot.

Title companies are pretty smart; they always run a last-minute lien search on the buyer, seller, and property before closing an escrow.

This time was no exception.

On closing day, I got a call from my escrow officer, informing me that the IRS had filed a lien on everything the builder owned the day before closing.

That killed the deal because the title company couldn’t issue title insurance with the IRS lien in existence.

May 19th, 2013 Posted in Weird Real Estate Stuff |  Print This Post | No Comments »

Phriends of Phil: The Carpet Geek

Charlie Lyman (aka “The Carpet Geek”), cleaned my carpets again yesterday.

In addition to stellar carpet and upholstery cleaning services, Charlie also offers carpet stretching, carpet repair, hardwood polishing, tile grout cleaning, and hard-surface counter polishing services.

Charlie even steam-cleans my German Shepherd, Sarro!

For the ultimate in carpet cleaning services, call The Carpet Geek at 855-5715.

May 18th, 2013 Posted in Phriends Of Phil |  Print This Post | No Comments »

Are We Done With Short Sales Yet?

Back in 2009-2011, more than 60% of our listings/sales were short sales.

It’s interesting to see how things have changed.

Here’s a breakdown of current short sale activity.

• Total Available Listings: 1,857
• Short Sale Listings: 257 (13.8% of all available listings)
• Short Sale Listings With Offers: 200 (77.8% of all short sale listings)

Takeaways

• We are seeing very few new short sale listings.
• Most (nearly 80%) of existing short sale listings have accepted offers awaiting lender approval.
• Despite some improvements in lenders’ short sale processing, short sales remain difficult, frustrating, and can take months or more to close.

I have often said that the only person who should buy a short sale is someone who doesn’t care if they get the property.

Data pertains to Ada County single-family homes on lot or acreage.  Data does not include condo or townhome properties.

May 17th, 2013 Posted in Short Sales |  Print This Post | No Comments »