Boise Real Estate Blog

Are We There Yet, Dad?

I grew up in Indiana.

When I was a little boy, our preferred summer vacation destination was the Rocky Mountains of Colorado.

Getting there entailed a long drive across humid Midwest corn-belt states in stifling heat with open car windows back before air conditioning became commonplace (yes, I was born after the wheel was invented, so don’t even ask).

I remember making the trip in a 1951 Pontiac Chieftain, and later in Dad’s pride-and-joy 1956 Oldsmobile Super 88 4-door hardtop.

We would get started around 3:00 a.m. to beat the heat, and I would usually start asking “Are we there yet, Dad?” about 3o miles from home, thereby driving my parents crazy in the process.

Those days are a distant memory now that my parents are both in a nursing home. I didn’t know that those were the good old days as I was living them.

(note to self: live for today; these are tomorrow’s good old days)

I am reminded of those days now when people now ask me “Are we at the bottom yet, Phil?”

I don’t know.

No one knows ~ not even those optimistic government economists and real estate cheerleaders who want us to believe that our pain will be short-lived and that we will return to the glory days of real estate next Spring, next year, or whenever.

I have a sense that we’re going to be slogging through this market for more than a few months, but I hope I am wrong.

I was going to write a post about this, but I happened onto Diane Cohn’s brilliant post on this very topic in her Reno Realty Blog.

Diane says it better than I ever could have, so I encourage your to peruse her post in its entirety.

You can substitute your city of choice for the word “Reno” as you read her post and get a pretty good idea of whether or not we are at the bottom of our current correction.

December 7th, 2006 Posted in Uncategorized |

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Boise Real Estate November Stats

Here are the November market stats for Boise, Meridian, and Eagle, Idaho.

(You might want to take a deep breath and sit down before reading this)

Ada County

Listing Inventory = 4,246 homes @ $299,900 median price

November 2005 closed = 1,184 homes @ $208,000 median price

November 2006 closed = 619 homes @ $231,000 median price

6.9 months’ supply (if no new listings)

-47% closed units (homes)

+11% median price

Meridian

Listing Inventory – 1,295 homes @ $299,900 median price

November 2005 closed = 379 homes @ $282,500 median price

November 2006 closed = 166 homes @ $234,900 median price

7.8 months’ supply (if no new listings)

-56% closed units (homes)

+20% median price

Eagle

Listing Inventory = 438 homes @ $574,000 median price

November 2005 closed = 69 homes @ $348,000 median price

November 2006 closed = 36 homes @ $350,000 median price

12.2 months’ supply (if no new listings)

-48% closed units (homes)

+.6% median price

I am very suspicious of the accuracy and relevance of the above statistics; specifically rising prices combined with declining closed units.

The law of supply and demand pretty much dictates that this cannot be true, or at least, cannot continue.

I think it is more likely that the stronger market of a year ago overpowered the current weaker numbers and that I would get entirely different results if I ran numbers for a shorter time period. In other words, our market was much stronger a year ago than it is now.

Then, there’s the fact that the numbers are NOT the numbers ~ those are sales prices that do not reflect seller-paid closing costs, bonus commissions to selling agents, etc. Very few transactions are closing these days without some seller concessions, and those concessions do not show up in the median price numbers.

For example, I received my “Christmas Present” from Corey Barton Homes today ~ a slick little brochure offering me $2,500 bonus commission to sell one of their homes, and another $2,500 for my buyers to use as they please. I wonder if this is on top of their previous offer to make the first six months of mortgage payments for buyers of their homes?

Our market statistics are continuing to deteriorate month-over-month. I want to attribute that to seasonality, but that doesn’t work because I am comparing to the same time period a year ago.

While I am not in the doom and gloom camp, this sure doesn’t match up to the “soft landing” so often predicted by our vaunted National Association of Realtors^® cheerleaders.

The Boise area is a great place to live, we were just named the “most secure place to live” at www.bestplaces.net, we have almost no crime, great weather, 3.2% unemployment rate, and relatively affordable housing.

Why are we getting hit harder than some of the so-called “bubble markets”?

Can anyone help me out here?

Note: Statistics derived from Intermountain MLS data and pertain to single-family homes on lots or acreage.

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Bubble Blog Links Gone

If you have really, really been paying attention you have noticed that I removed various “bubblehead” blog links from my blogroll a few days ago.

While I encourage all points of view and open discourse, I think it’s pointless to be focusing on doom and gloom.

The glass is neither half-full nor half-empty; the market simply “is”.

We must deal with our current reality and avoid trying to cast it as better (NAR) or worse (bubbleheads) than it is.

Overstated positions, whether positive or negative, serve little purpose when it comes to facing reality.

Our real estate market is in a very necessary and needed correction for past excesses, but we will survive and end up better off in the long run.

All markets eventually return to the mean, given enough time, and that is exactly what is happening now.

Skilled, experienced professionals thrive in markets like this.

There are still buyers and sellers who need help buying and selling real estate and we need to focus on those who need and want our help.

December 1st, 2006 Posted in Uncategorized |

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Boise’s Cheesecake Factory Opening !

Boise’s new Cheesecake Factory will open on December 11th in the new 35,000 sq. ft. addition to Towne Square Mall.

The Boise location, the 118th store for the California-based chain, was chosen based on Boise’s growth and the number of requests received from Boise residents.

The new Boise location will employ 250 people and offer more than 200 menu items, including 50 varieties of cheesecakes and desserts.

The new restaurant is adjacent to the new Borders Books & Music store, located in the same new addition to the mall.

I am guessing that Cheesecake Factory’s grand opening will be similar to P. F. Chang’s opening a few months ago, with standing-room only crowds waiting to get a table.

Sure is fun to watch Boise grow up!

December 1st, 2006 Posted in Uncategorized |

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What’s Wrong With Real Estate (Part I)

If I get another e-mail promotion from Mike Ferry telling me I need to learn “28 Guaranteed Ways To Close The Sale”, I’m gonna barf!

When I became a Realtor^&reg 34 years ago, it was all about how to use sales manipulation to entrap people and get them to sign on the dotted line.

There was the alternative choice “close” ~ that’s the one where you ask them if they would like to buy today . . . or tomorrow, with the underlying concept being that the client was toast if they so much as burped.

Kinda like Gotcha Sales:101

Then, there was the “feel, felt, found” technique for isolating objections.

Unfortunately, this one is still in use today.

It goes like this:

“I can understand why you feel that you want to think it over, Jim and Mary”.

“I’ve felt that way too”.

“However, I’ve found that I will generate my commission faster if you buy right now”.

Enuf to make you gag, isn’t it?

Manipulate people, trick them, and “close the sale”.

And we wonder why we aren’t regarded as professionals?

In my early days in real estate, Tommy Hopkins was the king of tricky closing tactics, along with Zig Ziglar (made me feel good for about two hours), Cavitt Robert, and other sales trainers of the day.

I still remember sitting in a packed Sunnyvale hotel conference room in a 1974 Tommy Hopkins seminar, thinking I would become successful if I could just learn all of those tricky sales techniques.

In later years, it was Tony Robbins and a new generation of “motivational speakers”.

Some of the are still around, spewing their techniques as a road to riches for anyone in sales.

The only personal development speaker I ever liked was Jim Rohn.

Jim’s honest messages were “work harder on yourself than on your job”, “you can become, have, and do anything you choose if you will just choose”, and “the true value of a goal is to entice you to become the person worthy of achieving it”.

That worked for me.

My real estate business model is really pretty simple:

Show up (on time)
Tell the truth
Don’t get attached to the outcome (some do; some don’t)

Real estate, at its most basic level, consists of finding people who are motivated/qualified, asking them lots of questions and listening carefully to their responses, and helping them get what they want.

It’s amazing what you can learn about someone’s motivation if you ask enough questions to “peel the onion” and understand why they want to do something.

You don’t have to trick good clients into doing anything; they’ll do it on their own ~ really!

It is not about sales persuasion and “closing the sale”; it’s about the client!

The real secret to real estate success lies in finding good clients.

You can help a hundred, but you can’t carry even one on your back.

November 30th, 2006 Posted in Uncategorized |

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