Tag Archives: Real Estate

Why aren’t more renters buying?

In our market, Boise Idaho, the cost of renting a house is more than the cost of a mortgage for a similar home. It would seem that everyone would be buying a home.

The Wall Street Journal did a survey on why, and here it is:

http://realestate.msn.com/blogs/post–why-more-renters-arent-buying

The top three reasons are directly related to our economy and job market, not worries about values dropping or other reasons.

What do you think? Comment below:

You can have perfect credit and still get turned down for a mortgage.

It doesn’t seem like someone with excellent credit, solid employment, and documentable assets and income would get turned down for a loan, but it can happen.

One of the fundamentals of writing a solid mortgage is to ensure that the property is acceptable and will be an asset in the future. After all, you wouldn’t want to pay for something for 15,20 or 30 years and find out that its not worth anything.

There are many things that can affect the value of a residential property and zoning is one of them. You can be in an area that is zoned for residential use but right next door is a factory zoned for industrial use. Even if there are other properties that have sold for a comparable amount, the neighboring property can bring your value down or create uncertainty of the future use of that property. Think about your home town and how it has changed over the last 30 years. Get the picture?

One of the items required for a conventional residential mortgage is an appraisal. The duty of the appraiser is not simply to assign a value to a residential property, but also to make comments on the neighborhood and note if the area’s use is stable or adverse.

A recent appraisal came into my office and it is in an area that the local government would like to see more industrial uses in the future. In fact, they publish a future use map for all to see before they purchase any property in the area. The appraiser marked the area as being in transition and residential use was interim. How long until the area becomes fully industrial is unknown, in fact it might never become devoid of homes, commercial and farms that are currently there, but the city has indicated that any new industrial uses in their impact area would go there.

This is a huge risk for any future buyers. You could buy a home in that area and years later, when you go to sell, you find your potential buyers unwilling or unable to get financing on your property.

In the end, our company had to pass on writing this loan. It was simply a risk that we were unwilling to take or let a client take.

Not everyone thinks its sunshine and unicorns in the Real Estate Market…..

http://finance.yahoo.com/blogs/daily-ticker/house-prices-nowhere-near-bottom-says-analyst-125114464.html

In the Boise, Idaho real estate market, we have had a very good 2012 sales season.  Median prices have recovered about 25% from their lows.  This puts many homeowners back into an equity position, although there are many homeowners who are still “underwater” on their home values.

The analyst, Keith Jurow, says there is a large shadow inventory of bank owned homes that will hit the market.  Now, that doesn’t mean much in my market, Boise, Idaho nor may it mean anything in your individual marketplace.  Yes, there are bank owned homes in my market, in fact, I’ve been watching a couple of homes in my neighborhood go into their second winter without being listed for sale.  Eventually they do get on the market.  By controlling how much and how fast inventory is added, the banks can mitigate their loss.

For prospective homeowners in the Boise, Idaho real estate market, I would say don’t wait and try to time the bottom.  Interest rates are at historic lows and by all logic, will be higher in the future.  You might find that the home you are waiting on sold within days of being listed.  Furthermore, even a 1.0% increase in the historically low interest rates will equal a $112 higher payment per month on a $200,000 loan.  It wouldn’t take much to make interest rates jump from the low 3’s into the 4’s.

Anyway, I guess I will keep my sunny outlook for our market and try not to get hit by falling real estate unicorns.

 

 

 

 

What is this rumor about a real estate tax to pay for Obamacare?

I guess we did  have to pass the bill in order to find out what was in it.  The National Association of Realtors have a good explanation of what we are in for is Obamacare is allowed to go into effect.

http://www.realtor.org/small_business_health_coverage.nsf

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