As many older Americans choose to remain in their homes as they age, they will become more concerned about issues related to mobility, home safety and caregiving options. To address those concerns, the MetLife Mature Market Institute has published The MetLife Aging in Place Workbook: Your Home as a Care Setting, a free guide to help individuals and families assess potential care needs, determine whether their home should be modified or whether assistive devices are needed, identify potential care sources and understand costs. The workbook also includes a list of organizations and government agencies that can provide additional assistance.

The free publication is available at www.maturemarketinstitute.com

I LOVE REAL ESTATE and will remain active!

A total of 3.83 million foreclosure filings were reported on a record high 2.87 million properties in 2010, up 2 percent from 2009 and an increase of 23 percent from 2008, according to a year-end study from RealtyTrac, an online marketer of foreclosure properties. The report concludes that 2.33 percent of all housing units in the United States (one in 45) received at least one foreclosure filing last year, up from 2.21 percent in 2009, 1.84 percent in 2008, 1.03 percent in 2007 and .58 percent in 2006. Nevada, Arizona and Florida posted the highest foreclosure rates in 2010, while California, Florida, Arizona, Illinois and Michigan combined to account for half of all foreclosure filings logged in the United States last year. On a positive note, foreclosure filings declined in the fourth quarter of 2010, falling 14 percent from the previous quarter and 8 percent from the final quarter of 2009. But the RealtyTrac report attributes some of the recent declines in foreclosure totals to the continuing controversy surrounding foreclosure documentation and procedures that have prompted many mortgage lenders to temporarily suspend some foreclosure proceedings.

This is a seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences.

By Lawrence Yun | March 2011

Pending Home Sales Index For December: 93.7

This index measures ­housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year.

Source: NAR Research

Healthy Gains Continue

Existing-home sales took a significant leap forward with a 12.3 percent increase in December to a sales pace of 5.28 million units. Despite a big summer dip, actual sales for 2010 were expected to be near 5 million. NAR’s forward-looking Pending Home Sales Index for December was also up, by 2 percent, indicating continuing strength in home sales in the months ahead.

New Year, New Optimism

Practitioner confidence continued on a strong upswing in the latest business confidence survey, with respondents feeling good about housing sales now and into the summer. In January, practitioners said

Thanks to population growth, the number of home owning households in our country normally rises by about 1 million each year. But economic conditions will sometimes throw a hurdle in the way of that.

By Lawrence Yun | March 2011

We faced a big hurdle in the early 1980s when interest rates rose to as high as 18 percent, and we faced another hurdle after the housing “bubble” burst. The number of home owners did not grow from 2005 to 2010, even though the U.S. population grew to 308 million people—13 million more than in 2005. Instead, during that period the home ownership rate dipped to 66 percent from 69 percent.

We know those bubble years were fueled by artificial demand, so the 69 percent home ownership rate we had in 2005 was likely artificial as well. Thus, today’s 66 percent home ownership rate brings us back to a sustainable level.

When you combine this healthy home ownership rate with our country’s projected growth to 340 million people by 2020 (and 420 million by 2050), you can bet our industry’s long-term prospects remain bright. It’s the short-term economic pressure we have to worry about, but even here the news is brightening.

Manufacturing output has been rising. The stock market has recovered nicely. Companies are flush with cash. Consumer confidence has rebounded from very low levels, and jobs are being created.

Against this improving picture, we can expect to see some release of the demand that’s been building up for the last three years. Rising rental costs will also likely tip more renters into home ownership.

Putting these and other factors together, existing-home sales are projected to rise 8 percent to nearly 5.3 million units nationwide this year and possibly to 5.5 million in 2012. At this level, home ownership is solid, but it’s also sustainable given our level of population growth.

Lawrence Yun is chief economist of the NATIONAL ASSOCIATION OF REALTORS®.

The majority of Americans (48%) home buyer prefer a home that measures greater than 1,000 sf but no larger than 1.999 sf.  This according to an October 2010 published survey conducted by Relocation.com.

29% preferred 2,000 to 2,999 sf

12% preferred less than 1,000 sf

10% preferred 3,000 to 4,999 sf

2% preferred 5,000 sf and more

While new-home construction has stalled in many areas of the country, customer satisfaction with builders has improved for the third consecutive year and new-home quality has improved for the second straight year, according to J.D. Power and Associates. Overall customer satisfaction averaged 826 on a 1,000-point scale in 2010, the highest level since J.D. Power began the survey in 1997. Home builders in Phoenix; Las Vegas; Southern California; Orlando, Fla.; and Sacramento, Calif., received the highest ratings of overall satisfaction. Nine criteria were used to determine customer satisfaction with home builders in 17 markets: workmanship/ materials; builder’s warranty/customer service staff; price/ value; builder’s sales staff; home readiness; construction manager; recreational facilities provided by the builder; builder’s design center; and location. Satisfaction improved from 2009 in eight of the nine criteria. New-home quality also reached a record high, averaging 844 on a 1,000-point scale. The most commonly reported quality problems were landscaping, kitchen cabinet quality and finish, and heating and air conditioning.

While a majority of Americans (72 percent) say they still believe in the inherent value of homeownership, not everyone is sold on the idea. A recent Trulia survey finds that more than one-fourth of Americans who currently rent (27 percent) do not plan to ever own a home. More than two-thirds (68 percent) of renters who do plan to purchase a home someday say they do not plan to purchase for at least two years. Renters with home-purchasing plans concede that changes in their personal circumstances could persuade them to buy a home sooner rather than later. Tipping points include being able to save enough money for a down payment, getting a new job or promotion, and interest rates staying low or getting even lower.

The Last 13 of 33 ways to Sell your Home Fast

1. 1.       Replace the Garage Door
2. 2.       Empty the closets
3. 3.       Create a positive experience in your home
4. 4.       Buy some new furnishings
5. 5.       Scope out new developments (your competition)
6. 6.       Take the dog for a walk
7. 7.       Water the lawn
8. 8.       Check the price
9. 9.       Tame wild jungles
10. 10.   Buy potted flowers
11. 11.   Clean up the mess
12. 12.   Brighten things up
13. 13.   Dollars and scents

More details are available by email for each of this tips, PLUS the remaining 33 tips.

10 more out of 33 ways to Sell your Home Fast

1. Paint the front door and entry way
2.        Clean the Pool
3.        Carry back a second trust deed
4.        Park down the street
5.        Turn all the lights on
6.        Have a garage sale
7.        Pay down the principal
8.        Create more space
9.        Head to the nursery
10.    Start packing

More details are available by email for each of this tips, PLUS the remaining 33 tips.

10 of 33 ways to Sell Your Home Fast

1. 1.       Clean up oil spills in the driveway or street directly in front of you house.
2. 2.       Paint walls a neutral color
3. 3.       Make a showing checklist
4. 4.       Polish the fixtures
5. 5.       Clean appliances
6. 6.       Get out of the house while it is being shown
7. 7.       Bake cookies
8. 8.       Clean the carpets
9. 9.       Organize the garage
10. 10.   Offer to make payments

More details are available by email for each of this tips, PLUS the remaining 33 tips.

Foreclosure Options for Idaho Real Estate

Foreclosure Options for Idaho Real Estate

Fannie Mae launched a new website to help homeowners who are behind on their mortgage payments or are facing foreclosure. Knowyouroptions.com features practical information and resources to help homeowners avoid foreclosure and either stay in their home or sell it. Resources include a list of local foreclosure prevention events, housing counselors, Fannie Mae resources, credit score information, forms, videos, calculators and more. The site also provides important tips for recognizing and avoiding foreclosure scams.

For more information, go to www.knowyouroptions.com.

When it comes to investing, everyone has certain goals and aspirations.  However, we have found that there are certain guidelines every aspiring Idaho real estate investor needs to know:

 1-Compare Property values and Rents—Financial statistics only go so far, the best measure of a property’s market value is often the sale prices of nearby properties.  The same holds true for area rents.  A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a necessity.

 2- Be careful..Tax laws change—don’t base your tax investment on current tax laws.  The tax code is constantly changing, and a good investment is a good investment regardless of the tax code.  The right property with the right financing is what you should look for as an investor.

 3-Specialize in something you know—Start in a market segment you know.  Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings; you’ll benefit from experience by specializing in one aspect of Idaho investment real estate properties.

 4- Know the Costs going in—know the financial statements inside and out.  What are the operating expenses?  What are the loan payments and coverage ratio?  What does the cash flow statement look like?  These are key issues and must be addressed before making a solid investment.

 5-Kowhere your tenants are coming from—if the last rent increase was recent, your tenants may be considering a move.  If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers, it is important to collect the tenants’ security deposits at closing.

 6-Assess the tax situation—Taxes are an integral part of successful Idaho real estate investing, and they often make the difference between a positive cash flow and a negative one.  Know the tax situation, and see how it can be manipulated to your advantage.  It may be a good idea to consult a tax advisor.

7-Investigate insurance coverage—if seller’s coverage is based on lower-than-current replacement value, you insurance cost may increase when you pay a higher purchase price.

 8-Confirm Utility Costs—as the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

 9-Consult Your Accountant—Taxation is a key element of successful Idaho real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

 10-Inspect!—Make sure that you always perform a thorough inspection of the property before buying it.  Never, ever buy any property without at least examining the site.  In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

In today’s buyers market, there are more choices for real estate than ever before for.  Just look around, it seems that the whole valley is up for sell.  The farm land that existed is very quickly becoming subdivisions and country roads that were used for a Sunday afternoon drive is becoming major arteries from one county to the other.

 With all the available choices of real estate to a buyer, the questions still comes up, “Should I buy new or existing?”

 Let’s look at that question.  First of all there is no right or wrong answer.  The only answer is what will work best for your, your family, your situation and the piece of real estate you considering.  The best way to help decide whether to buy new or existing is to compare the Pro’s and Con’s.

 So as you can see here it can be a toss up between the two.  You just have to look at the whole picture.  New may be great today; however it may be a totally different story in five years from now when you want to resale it and you have to take less for it than you paid in the beginning.  On the other hand an existing piece may just take your breath away but this winter when its five below zero, the furnace may go out and you have no warrantee to replace it with.

 As with any investment decision and this is an investment decision, you must think it all the way through and look at it for the long haul not just for today.

SEVEN Most Commonly asked Questions

From Boise Home Buyers

1-      What school do the kids go to?  “Different schools have different perceived value to parents and social benefits to their children.”

2-      How many bedrooms?  “Are they really bedrooms, and are they large enough to accommodate the bedroom furniture you have?”

3-      What is the price?  “How does the price compare with other homes actually sold in recent months just like this one?”

4-      How many bathrooms?  “The most common traffic jam is at the bathroom.  Everyone trying to get ready for work, school, church or parties at the same time.”

5-      How many drawers and doors in the kitchen?  “Where will you store everything you own?”

6-      Does it have a pantry?  “Kitchen supplies at your fingertips.”

7-      Is the backyard fenced?  “We need someplace for our children and pets to play, outdoors, safe from the rest of the world.”

The first factor is interest rates.  Right now interest rates are the lowest they have been in 30 years at 4.5% APR.  This means that your purchase power has never been this good.  For example:  A $1,000/mo payment today will get you $196,361 to buy with, compared with $116,393 in 1978.  That is a $79,967 increase or 68.7%.

The other factor, is that prices have never been lower.   Prices are at an all time low.  Good properties are being picked up for thousands less than asking price, which is already thousands less than recent appraisal.   

Warning: This storm will not last forever.  We all know that interest rates will begin going up as inflation begins to go up.(this fall many are saying)  As current  inventories get bought up the prices  will firm up and begin to rise again.

Now is when buyers can make good gains in real estate.

and started putting their money in real estate.  At that time home prices were increasing at a fast rate and stocks seemed to have nowhere to go.  Five years later things look a lot different.  Stocks have been growing at a fast clip, with many market indexes hitting new highs.  On the other hand real estate has hit a slump, and many people are having difficulty getting rid of their investment properties.

People naturally lean towards the investment vehicles that have been doing well.  They tend to chase performance.  The problem is that by the time they realize that the wind is blowing in a different direction it is already too late, and they end up buying at the worst possible time when the market has just peaked.

Many people that invested in real estate in the last growth cycle are now under water, meaning they can’t sell the house for what they bought it for, and in many cases, they owe more on the mortgage than the house is worth.  Since they can’t sell the properties, many have opted to rent them until the market turns.  But the reality of dealing with tenants is that it can be a lot of work.  First you have to find qualified tenants that are likely to pay the rent on time.  Then you have to deal with repairs, which could cost quite a bit of money if you don’t have the skills necessary to make the repairs yourself.  And last but not least, getting calls in the middle of the night from tenants is not what many people had in mind when they dreamed of becoming real estate moguls.

It is obvious that investments go through cycles and what is hot today may not be so hot tomorrow.  But in the long run, which investment is best, stocks or real estate?   According to a study done by Ken Winans, president of investment research firm Winans International, stocks have always been a better investment than real estate.  From 1920 to 2006 the average new home appreciated from $4,030 to $276,400, an investment gain of 6,759%.  However, in the same period the Dow Jones Industrial Average gained 17,210%.  The same applies to the last 20 years where home prices gained 268% and the Dow gained 1,193%.

So are stocks always a better investment than real estate?  The study above confirms what other studies have shown, that in the long term stocks perform better than real estate.  However, performance is not the only factor that should be taken into consideration.  Let’s take a look at how the two compare on other parameters:

Leverage – One area where real estate beats stocks is leverage.  This is due to the fact that you typically borrow a significant portion of your real estate investment, so the return on the money you invested out of your pocket is higher than if you had not used any leverage.  You can use leverage in stock investment by buying on margin, but you are limited to 50% of the investment, and the interest rates are usually not as favorable as the rates on a mortgage.  Other leverage instruments are available for stocks, but they usually involve significant risks.

Taxes – In the United States real estate also beats stocks when it comes to taxes.   Mortgage interest on your home is tax deductible, and the first $250,000 is free from capital gains.  With stocks you have to pay capital gains taxes on the appreciation when you sell the stock, and dividends are taxed at your tax rate.

Volatility – Real estate is a lot less volatile than stocks.  The price of real estate is unlikely to move rapidly in either direction.  On the other hand, changes in stock prices of 10% or more can happen in a very short period of time.

Despite of the advantages above, real estate requires more work to manage and is not as easy to diversify as stocks.  One good alternative for real estate investors who want to take advantage of the benefits of real estate investment but do not want to deal with its negative factors is Real Estate Investment Trusts (REITs).  REITs are companies that invest in real estate, and they behave like stocks, except that they have to pay dividends on a regular basis.  REITs give you diversification and eliminate the liquidity and high maintenance headaches usually associated with real estate investments.

As you can see, both stocks and real estate have advantages and disadvantages.  The best approach for savvy investors is to invest on a regular basis and for the long-term in a well diversified portfolio that includes both stocks and real estate.  You must avoid the temptation of chasing performance so that you are not buying and selling these assets at the worst possible time like many people have done in the last few years.

One sure sign of fall in Idaho is the sugar beet harvest across southern Idaho.  The sugar beet crop is found in three distinct regions of Idaho: southwest, southcentral and southeast.  The crop accounts for $1.8 billion in the Idaho economy and an estimated 7,000 jobs.  It is the fourth largest crop in Idaho behind #1- potatoes, #2-wheat and #3-hay.

Current Market Analysis Idaho Home Market

By Bernard Markstein Senior Economist National Association of Home Builders

Recently I attended an Economic Forum sponsored by Mountain West Bank.  The main speaker, Mr. Markstein had this to say:

• The recession, technically speaking, ended June 2009, however the average person must feel his/her head above water, before he/she would agree.
• Residential recovery is to be long and slow.
• One-third of what is needed for a full recovery is now in place.
• Annual housing starts must reach 1.8 million per year to arrive at a normal level; currently we are at 1.2 million.  If current trend continues, we will be there in the year 2013.
• Mortgage rates are historic lows right now and expected to remain low.
• Home sales stalled after the expiration of the $8,000 tax credit.  Don’t expect that back.
• Falling prices have made home more affordable…1998 levels.
• Inventory of existing homes for sale have adjusted down to 3.2 million, nationwide, compared to 4.4 million in 2008 the peak.
• Inventory of new homes is extremely low right now; down to a 6.5 month supply nationwide.
• Household formations have lagged causing pent-up demand for housing.  Many households have doubled up over the last couple of years and will start splitting up and create more demand.
• Employment, a key factor to the recovery, is still falling.
• As for Idaho; the top 40% of new home builders are only building at 55% of normal.
• Net population in Idaho still increased 1.45% (17,400) in 2009 over 2008.  Boise-Nampa MSA increase at a higher rate of 1.53%
• Since the last of 2007 average home prices in US have dropped by 25.2% through the 3^rd quarter of 2010, however the Boise-Nampa MSA experienced a drop of 43.4% in the same period.  We are at pre 2000 levels.
• According to NAHB, the BNMSA is currently 73.5% of affordability which is the same as Salt Lake City, Washington DC, and Sacramento.  Los Angeles, San Francisco and New York City are only at 33% of affordability.
• Building permit levels across Idaho are still below 2000 year levels.
• The eastern and Northern ends of the state are fairing better than BNMSA.

TOP 10 “MUST HAVE” FEATURES FOR Today’s Boise home buyer

1. 1.       Large Kitchen
2. 2.       Energy efficiency (including appliances, insulation and windows)
3. 3.       Home office
4. 4.       Main-floor master suite
5. 5.       Outdoor living room
6. 6.       Ceiling fans
7. 7.       Master suite soaker tub
8. 8.       Stone and brick exteriors
9. 9.       Community landscaping (with walking paths and playgrounds)
10. 10.   Three-car garage

TOP 5 THINGS BOISE HOME SELLERS WANT HELP WITH from their agent:

1. 1.       Price the home competitively- Sellers just want their home sold for the most money and at the same time be fair.
2. 2.       Sell their house within a specific timeframe- Sellers want their home sold on their time frame with the least amount of inconvenience or interruption
3. 3.       Find a buyer for the home
4. 4.       Market the home to potential buyers-more than anything they do not want to deal with the buyer themselves.
5. 5.       Find ways to fix up the home to sell it for more

Based information extracted from the National Association of REALTORS, The Nielson Company, U.S. Census Bureau, Federal Reserve Board, Real Trends, RIS Media and Buffini & Company the following facts may be interesting to you:

• The median time for a home on the market in today’s market is 10 weeks, nearly 1/3 are on the market 17+ weeks.
• Did you know that in 2009,  47% of all homebuyer were buying their first home?
• The National home ownership rate in the U.S. is nearly 67%
• During 2009, 78% of all homes purchased were single family detached homes
• The average homeowner’s net worth is more than 10 times that of the average renter
• 22% of listings on the market through June 2010, a decrease from 23.6% in June 2009
• Almost 50 percent of all buyers in 2009 considered purchasing a foreclosed home
• 1 in 10 buyers actually purchased a foreclosed home

BUYER FACTS, TRENDS & DEMOGRAPHICS affecting Homes in Boise

According to the annual survey conducted by the National Association of REALTORS where they asked buyers about their experience purchasing their home the found that:

• When deciding where to live 64% of individuals consider quality of neighborhood
• The typical home buyer searched for 12 weeks and viewed 12 homes
• Seventy-Seven percent of buyers purchased their home through a real estate agent/broker
• The typical age for first-time home buyer was age 30
• The typical age for the repeat buyer is age 48
• Ninety-two percent of buyers financed the purchase of their home with a mortgage
• Buyers rate honesty and trustworthiness as the most important factors when choosing an agent
• More than a third of buyers said that they did not make any compromises when purchasing their home
• The two most common items compromised on were price and size

Then I came to my senses.  This is not good!  These idled “economic engines” represent a sluggish economy and major unemployment.  I lost count at number 101.  No doubt, Union Pacific Railroad would rather have these brutes out on the road hauling frieght, than sidelined for a photo op.

Can you Say “Caveat Emptor”?

In today’s market, due diligences has never been more important—or needed.  With the markets slowing, income lacking and reserves dried up property owners are getting behind on maintenance, avoiding capital improvements, falling behind on taxes, cutting corners on management and more.  Consequently there are dangers lurking in the shadows of every investment real estate purchase.

When buying an Idaho investment property it is always important to work with experienced professionals who will help guide you through the acquisition process.  And foremost point out the dangers that will surely gobble up your cash after the transaction closes.  These people do this every day thereby know what to look for.

BUYER BEWARE! The following is just a short checklist of things to watch out for:

• Are any furnaces, air conditioning units, parking lots, landscaping, elevators, doors, roof, floor coverings or electronics needing maintenance or replacement.  Check the financials closely and note any changes in repair expenses in recent months.  Ask questions!
• Is everything up to code…electrical, A/C, and gas?  Is there any structural issues?
• Check the county treasurer’s office to see if they are current on the property taxes?
• Has management attracted a lower grade of tenant and/or encouraged some bad practices that is going to be a problem to get corrected going forward?
• What is the design obsolescence?  Why wouldn’t sell before you saw it?  Perhaps the design or characteristics of the property are such that the same problem will exist no matter how much money is poured into it.
• Why were the vacancies?  Why the turnover?

Today’s Idaho investment property market is abundant with bargain properties, just be extra cautious.

Yesterday one of my good friends and I had lunch at Cooper Canyon Restuarant in downtown Nampa, Idaho.  This is certainly one of my favorites and one of the few fine dining experiences in Nampa, Idaho.

They offered a new special: halibut fish and chips.  AAAAAAhhhhh!!!! to die for.  Naturally I preceeded the entree with a cup of Chef Brian Inaba’s ever famous smoked salmon chowder.  You just have to try it!  They have a complete menu  on their website.

Chef Brian Inaba draws from over thirty years of personal experience in fine dining establishments. His experience includes the Benson Hotel in Portland, St. Francis Hotel in San Francisco and an acclaimed career as the executive Chef at the Columbia River Gorge Hotel in Hood River Oregon. Brian’s dedication to family, community and attention to detail have aided in the establishment as owner/chef of Copper Canyon Restaurant since 1999.

In 2007, commercial/investment real estate acquisitions across the country were closing at the rate of 512 per week, according to Real Capital Analytics (RCA).  Community and regional banks, national lenders, institutions, CMBS issuers and other financial sources couldn’t draw up mortgage documents fast enough.  As we know, things changed quickly.  Today closings take place at the rate of approximately 124 per week same as 2009 levels.

Another significant change—from 2002 to 2007, the Commercial Mortgage Backed Securities (CMBS) market accounted for 37 percent of all loans originated.  In 2008 that percentage dropped below one percent and to date in 2010 is only about 1.5 percent.

This shortage of capital has rippled through the Idaho investment property market place with devastating effect.  Over night the Idaho investment property buyers disappeared.  With no capital, their desires to invest dried up.  Thus a huge drop in values followed to the point that most equities in Idaho’s commercial/investment properties vanished causing these properties to be upside down.  This fact only fuels decline in values and investor confidence.

It will be a number of years before the market truly stabilizes on fundamentals and capital markets.  Experienced Idaho investment pros know that any substantial increase in activity will come after the market deals with higher vacancies and weaker rents.