Top 10 Ways To Identify "The Bottom"

1. Builders stop giving cars away to people who buy a home.

2. Sellers stop paying buyers’ closing costs.

3. Sellers stop offering bonus commissions to buyer’s agents.

4. Sellers start seeing multiple offers again.

5. There isn’t a “For Sale” sign in everyone’s front yard.

6. There aren’t any more “Price Reduced” riders on signs.

7. Homes become more affordable for the average buyer.

8. Barney Frank stops trying to “fix the foreclosure mess”.

9. Two million struggling real estate agents get real jobs.

And, finally . . . . (bada boom)

10. The media says something positive about real estate.

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Headlines You Won't See In The Media

99.4%of all Idaho households are NOT in foreclosure!

Idaho Jobless Rate Rises A Meager 1/10 of 1% to 3%!

97% Of All Working Idahoans Have A Job!

94.9% Of All Working Americans Are Employed!

Commercial/Retail Construction Is Booming In Treasure Valley!

Roads Are Being Improved Everywhere To Accommodate Our Growth!

Meridian School District Will Soon Open Five New State-Of-The Art Schools!

Am I the only one who’s fed up with the endless negative news in the media?

You loyal readers know that I am anything but a real estate cheerleader.

If anything, I am the anti-cheerleader.

I simply publish the facts and leave it up to you, my readers, to draw your own conclusions.

That said, I am growing weary of the endless drumbeat of everything being cast negatively.

Am I the only one who’s sick of the negative bias in news reporting these days?

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Fed Rate Cuts May Not Mean Lower Mortgage Rates

Don’t be surprised if mortgage interest rates rise in the aftermath of the recent Federal Reserve interest cuts.

Why?

Because mortgage rates are tied to the 10-year treasury bond; not short-term interest rates controlled by the Fed.

The bond market actually fears lower short-term rates because it raises the specter of inflation.

That (irrational?) fear of inflation means that the bond market demands a higher yield (interest rate) to offset the eroding effect of inflation.

That’s precisely what happened a few weeks ago when the Fed dropped consumer interest rates by ¾% after a foreign bank took a $7 billion hit and the financial markets got rattled.

When that happened, mortgage rates went from 5.75% to 6.5% in a matter of days before finally settling down again.

It’s quite possible that today’s interest rates might be about as low as we can expect in the foreseeable future.

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How To Get Rich Slowly With Boise Real Estate

Remember when Boise real estate was appreciating 24% year back in 2005?

Seems like a long time ago, doesn’t it?

Those were the days when everyone thought they would become filthy rich in just a couple of years by owning a few homes.

Obviously, those days are long gone.

But, owning your own home is still a solid investment, even if you use the most conservative projections.

So, let’s take a look at some numbers that are more realistic in today’s market.

Instead of 24% appreciation, let’s use 2% annual appreciation rate and see how things turn out after 10 years of ownership.

Scenario:

  • $250,000 purchase price
  • $50,000 down payment (20%)
  • $200,000 loan @ 6.25% interest, 30-year fixed rate, with a payment of $1,231.43 (principle and interest)
  • 2% annual appreciation

Projections:

  • Year 1 Value: $255,000
  • Year 2 Value: $260,100
  • Year 3 Value: $265,302
  • Year 4 Value: $270,608
  • Year 5 Value: $276,020
  • Year 6 Value: $281,540
  • Year 7 Value: $287,171
  • Year 8 Value: $292,915
  • Year 9 Value: $298,773
  • Year 10 Value: $304,748

Meanwhile, by just making your regular monthly payments for 10 years, you will pay your loan down to $168,476.

Your equity position will be $136,273.

Not bad for buying a home that barely appreciates in today’s soft Boise real estate market, right?

This is the real reason to buy a home ~ to get rich slowly, not quickly!

Worst case is that your home doesn’t go up one penny, you own it for 30 years, and it becomes free and clear!

If you’re an investor, the reasons are even more compelling with the long-term attractiveness of Boise real estate. You could benefit from the above scenario while your tenants make the payments, not to mention possible tax deductions.

Disclaimer: The above projections are not guaranteed. I am human and make misteaks and eerors. Plus, the world could explode and you might not make any money at all! Or you might do better. I haven’t a clue what will happen in the future. So, don’t even think about suing me, okay?

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55% of Boise Area Homes For Sale Are Vacant

I remain amazed over the number of vacant homes I see when I am previewing/showing homes these days.

I rarely have to coordinate showing a home with an owner-occupant because most are vacant.

Of 4,296 homes on the market in Ada County now, 2,368 (55%) are vacant!

Where have all those people gone?

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