Boise Real Estate Blog

The New Normal

Much has been written about our current real estate market and how this is the “new normal”.

Problem is, our current “new normal” isn’t really what most of us had in mind.

I seldom run into anyone who still believes that our overheated, unsustainable market of 2005-2007 was normal.

But, I think most of would like to see a return to the “good old days” ~ the real estate market of the early 2000’s when:

• Entry-level homes were priced around $100,000 or lower.
• Mid-level homes were priced around $150,000 to $175,000.
• Upper-end homes were priced around $250,000 to $300,000.
• Only a few homes sold for more than $500,000 each year.

(NOTE: We ARE back to the pricing of the early 2000’s for the most part, except our listing inventory is 50% distressed properties that have been trashed by homeowners losing their homes.)

• Price appreciation was a sustainable 3-5% per year.
• Basic subdivision lots cost $30,000 and larger custom home lots cost up to $75,000.
• The average person could afford to own a home.
• The typical homeowner had only one loan on his home vs. everyone having a HELOC and/or refinancing every six months to pull out their equity and buy toys.

In many ways, we have returned to the “the good old days” of the decade.

Now, if we could resolve our unemployment and foreclosure challenges, perhaps we could feel better about our “new normal”?

October 19th, 2010 Posted in Inside Real Estate |  Print This Post | No Comments »

Our Incredible Foreclosure Mess ~ Part II

• Homeowners now in foreclosure could get more time before being evicted after their foreclosure is completed.
• There could be a temporary strengthening of home prices if the foreclosure moratoria continue long enough to sell off our present REO inventory.
• Realtors^®, lenders, title companies, home inspectors, and the construction industry could face further declines of income.
• There could be a glut of REO properties on the market after the foreclosure moratoria end.
• Lenders could redirect their efforts toward completing short sales to avoid problems with their foreclosure processes.
• Sales of REO properties could dwindle as a result of buyers being concerned about their ability to obtain title insurance when they eventually sell their REO properties.
• Banks’ balance sheets could be further weakened by having to set aside reserves for foreclosed properties, thereby leading to another banking industry collapse and ensuing bailouts.
• Banks’ stock prices could decline as investors become concerned about the impact of flawed foreclosures and potential costs of holding foreclosed properties and legal claims from foreclosed homeowners.
• Title insurance companies could (will?) raise title insurance premiums to offset anticipated/real losses.
• One or more title insurance companies could be forced to merge or liquidate as a result of having to pay title insurance claims.

You’d think lenders would finally wake up, smell the coffee, and realize that everyone benefits if they get their act(s) together and work with borrowers to keep them in their homes.

These are just a few possibilities that I have considered.

Can you add to this conversation?

I welcome your comments!

October 18th, 2010 Posted in Inside Real Estate |  Print This Post | No Comments »

Our Incredible Foreclosure Mess ~ Part I

Just when we thought our foreclosure debacle couldn’t get worse, it has.

This past week’s revelations of flawed foreclosure proceedings by several large mortgage lenders has the potential to further exacerbate our already severe foreclosure mess, not to mention our overall economy.

I have done some thinking about how this could unfold.

Here are my random musings about some of the possibilities:

(NOTE: I said possibilities; not certain outcomes ~ absolutely nothing is certain in this unfolding  situation.)

• The moratoria could actually be a positive because it could help clean up our overhanging REO inventory due to a reduced supply of REO listings.
• Home buyers could become even more reluctant to purchase a home due to the FUD (fear, uncertainty, doubt) factor surrounding real estate.
• Our national and local economies could be further weakened.
• Title insurance could be withdrawn from more (all?) REO properties.
• Lenders could (will?) face massive class action lawsuits seeking damages for improperly-foreclosed properties (make no mistake ~ this is a full-employment act for enterprising attorneys!)
• Lenders could be forced to return improperly-foreclosed properties to their former owners.
• Underwater homeowners could stop making payments in the belief that they could live in their homes longer before losing them in foreclosure.
• Real estate brokers who handle nothing but foreclosures could see diminished business or possibley be forced out of business due to a lack of listing inventory and closings.

October 17th, 2010 Posted in Inside Real Estate |  Print This Post | No Comments »

Why Aren't People Buying More Homes?

With interest rates at their lowest point (4%) in more than 50 years, and home prices having declined 35% or more in our area, you’d think buyers would be lined up, eager to buy homes.

As my recent monthly statistics posts indicate, we are selling homes but not in huge numbers despite extremely favorable affordability and attractive financing options.

Buying a home is a big commitment that buyers are reluctant to make in our current time of uncertainty.

People are fearful and uncertain about the future, their jobs, taxes, investments, our paralyzed federal government, possible further price erosion, and many other concerns.

The good news is that the people who are buying homes are buying them for the right reason ~ to own their own home, build equity, and someday own it free and clear.

That beats being a renter by any measure!

October 12th, 2010 Posted in Inside Real Estate |  Print This Post | No Comments »

Phriends Of Phil ~ Honest Mechanic !

I’m often asked if I can recommend an honest mechanic and, believe it or not, I actually can!

Bob Giesler, owner of Giesler Auto Repair in Meridian, has been in business at the same location for the past 36 years.

I can vouch for his integrity after recently having him tell me to not waste my money on a repair I thought I needed.

Where else will you find that?

Bob and his skilled technicians offer general auto maintenance and repairs for cars and light trucks, including tune-ups, brakes, fuel injection, batteries, air conditioning, and other repairs.

Call Bob now @ 888-1841 to schedule an appointment and get 10% off when you mention that you’re a “Phriend Of Phil”!

October 7th, 2010 Posted in Phriends Of Phil |  Print This Post | No Comments »