• Positive: Meridian’s average/median sales prices are stable vs. a year ago’s numbers.
• Positive: Eagle’s listing inventory is down to only 318 homes (was 574 in July, 2008).
• Positive: Eagle’s vacant listings are down to 33% (vs. more than 50% for the rest of the county).
• Positive: Ada County’s average sales price declined only 1.9% year-over-year.
• Negative: Ada County and Meridian listing inventory has increased (not what we want to see in Summer).
• Negative: 57.1% of Meridian’s listing inventory is vacant.
• Negative: We sold fewer homes this July vs. last July despite lower prices and lower interest rates.

Observations:

• Market activity has slowed since the end of the federal tax credits, but the market has not collapsed.
• We are surely somewhere near “the bottom” (prices will not go to zero!)
• I remain concerned about our economy, jobs, and the possibility of a double-dip recession.
• It is stunning to see some homes in Eagle selling for half the price per square foot of just 3-4 years ago.
• Interest rates at 50-year lows, combined with today’s attractive prices, are what’s driving this market.

Many focus on “overcoming objections”.

Have you ever been subjected to the “feel, felt, found” technique by an aggressive real estate agent?

It goes like this:

You walk through a home with your agent and say something like “I don’t like the putrid green shag carpets!”

Which is followed by the agent saying something like:

“I know how you feel”.

“I have felt the same way in the past”.

“But I have found that I could learn to enjoy putrid green shag carpeting if I just gave it a little time”.

You get the idea.

No genuine compassion for your thoughts, just a shallow attempt to overcome your objection and “close the deal”.

Perhaps I have it all wrong, but I believe there’s no need to overcome objections.

It’s better to explore objections with clients, discuss them, and find solutions for them (like new carpets, for example?)

Serious, motivated, qualified clients simply want honest, truthful information instead of self-serving sales talk.

The bottom line?

A motivated seller will do what it takes to sell their home.

And, a motivated buyer will buy when they find the right home.

They don’t need to be “closed”!

There’s no point whatsoever for a builder to take a chance on building a spec home and ending up subsidizing the sale at closing, or even worse, losing their spec home in foreclosure after investing tens of thousands of dollars and months of effort building the home.

Builders in the Boise real estate market face many challenges these days, including:

Competition From Resale Properties

How can a builder compete with a resale home seller with equity to negotiate who has been transferred, lost their job, or is getting a divorce?

Competition From Foreclosures/Short Sales

How can a builder compete with a lender who’s selling foreclosed properties at a substantial discount to the builder’s brand-new home?

Difficulty Obtaining Construction Financing

Construction lenders are skittish about making construction loans these days. The terms for those loans make it difficult, if not impossible, for a builder to qualify for construction financing in many (most?) instances.

Which is why we see very few builders building spec homes in the Boise area at this time.

During better times, we had numerous quality builders (like Flaherty, Tahoe, Marrs, Price, Mayer,  etc.) building dozens of homes each year in the Treasure Valley.

Now, we have just a few builders treading carefully and avoiding risk.

Many of our former respected builders have either gone out of business or moved to the sidelines awaiting better times.

Months’ Supply is calculated by dividing the number of available properties by the absorption rate.

On 7/1/10, there were 96 homes for sale in Eagle priced above $500,000.

Using the example of our current Eagle market, you would divide 96 available properties by the absorption rate of 5 homes per month to arrive a 19.2 months’ supply of homes priced above $500,000.

Absorption rate is calculated by dividing the number of months you want to analyze into the number of closed sales.

Here’s a current example that calulates the absorption rate for homes in Eagle above $500,000 over the first six months of 2010:

During the first six months of 2010, 29 Eagle homes priced above $500,000 closed escrow.

In this example, the absorption rate works out to about 5 closed sales per month.

(see my next post for an explanation of “Months’ Supply”)

Chris is in the military, has lived in various places around the world, and is curious about Boise real estate practices because, in Italy, sellers apparently remove and keep their cabinets when selling their homes.

(hmmmm  .  .  .  . that only happens with foreclosures in our area, right?)

He wants to know what usually stays with a house when it sells in the Boise area.

My answer: It depends!

The general rule in Boise real estate is that it stays if it’s attached and can be removed if it’s not.

That means obvious things like floors, toilets, cabinetry, plumbing, furnace, etc. remain with the house.

However, things can get interesting when we start talking about freestanding ranges, mirrors on walls, refrigerators, washers, dryers, etc.

In general, if something is attached and the seller intends to take it with them, the listing agent should specify that it is excluded in the MLS listing to avoid confusion.

I am currently representing a buyer of a $525,000 home where the seller intended to remove and take the water softener, but the listing agent didn’t mention that in the listing. Thus, my buyer will get the water softener (I specified that it stays with the house in my offer).

In the Boise real estate market, sellers typically leave freestanding ranges, installed water softeners (if owned; not leased), central vacuum systems (including attachments/tools), but usually take their refrigerator, washer, and dryer.

That said, everything is negotiable but should be clearly specified in the purchase and sale agreement.

It’s not unusual for refrigerators, washers, and dryers to be included in a sale if they are older, the seller doesn’t want to move them, and the (especially first-time) buyers will benefit by having them.

Over my 38 years of real estate, I have seen some pretty interesting behavior when it comes to personal property.

The most bizarre instance occurred when I was a newly-minted agent and one of my first sellers took all of the light bulbs when they moved out.

Can you spell c-h-e-a-p ???

MLS Status Codes

• “Available” obviously means the property remains unsold and is available (I told you it was “:101″!)
• “Pending” means there is a pending sale (the property is “in escrow”, pending closing).
• “Sold Contingent” means that there is an accepted offer that is contingent upon another event, such as selling another property, closing another property, getting the down payment from grandma, etc.)
• “Closed” means that the property has been sold and escrow has closed.

Spec Home

A spec home is one that has been built by a builder who’s speculating that someone will buy it (very risky business these days).

In other words, the home was not pre-sold before starting construction.

Build Job/Build To Suit

A build job is a home sold prior to starting construction that is being built-to-suit for the buyer.

Prequalification Letter

Mortgage lenders issue pre-qualification letters to provide general assurances that a borrower will be able to obtain mortgage financing. It is not a firm loan commitment because the lender has not thoroughly investigated the borrower’s ability to obtain financing.

Loan Commitment

A loan commitment is issued by a mortgage lender after the lender has completed a thorough review of a borrower’s credit, employment, debt to income ratio, etc. Generally speaking, a loan commitment is more reliable and more thorough than a pre-qualification letter.

REO

The term “REO” means “real estate owned” and refers to foreclosed real estate that is owned by a mortgage lender.

Short Sale

The term “short sale” means that the net proceeds from the sale of a property are “short” (less) than the amount owed on the mortgage(s) for the property.  It definitely does NOT mean that the sale will be short or easy!

Title Search

The term “title search” refers to the process of searching the title of a property to determine ownership, legal issues, liens, etc.  In Idaho, this process is completed by the title/escrow company prior to closing and issuance of title insurance.