With all the doom and gloom we have been exposed to about the housing market, it is time for some good news.  Boise recently was cited by market statistics that they are one of the top ten turnaround housing markets.  Finally something positive to report to homeowners!  Boise ranked number three in the research done by Realtor.com analyzing 146 metro areas in the United States.  The median home price in the Boise area increased 19.73% compared to the first quarter of last year.

Attached are links to the articles:

Inman News:  http://www.inman.com/news/2012/04/26/top-10-markets-rising-list-prices

Realtor Magazine:  http://realtormag.realtor.org/daily-news/2012/05/10/top-10-turnaround-housing-markets?om_rid=AAC$w1&om_mid=_BPrAyvB8i7CyqZ

This is great news for Treasure Valley homeowners!



Is now the right time to sell?  That sounds like a loaded question.  In this economy some homeowners are underwater on their mortgages so selling at this time does not make sense.  However, many home owners have equity in their home and may be able to sell and take advantage of then purchasing the home of their dreams at a low price with a historically low-interest rate.

For example:  Let’s say you purchased a home for $160,000 in 2004 in NW Meridian.  This is a 3 bedroom, 2 bath home with a 3 car garage.  1700 sqft approximately.  Standard size lot.  5 years old.  No granite counters or wood floors.  Nice neighborhood.  No pool or clubhouse.  Very clean.


2004 2012 (20 yr) 2012 (30yr)
Loan Amount $128,000 $135,000 $165,000
Interest Rate 6% 3.50% 3.87%
Monthly Payment $767/mo $782/mo $775/mo
Price of Home $160,000 $170,000 $207,000

What can you get in 2012 to keep your payment the same?

$170,000 Home:   4 bedroom, 3 bath home with a 3 car garage.  2500 sqft approximately.  Standard size lot.  9 years old.  Granite tile counters, hickory floors.  Nice neighborhood with pools and clubhouse.  Very clean.

$207,000 Home:  5 bedroom, 3.5 bath home with a 4 car garage.  2800 sqft approximately.  Standard size lot.  7 years old.  No granite counters, but wood floors.  Nice neighborhood.  No pool or clubhouse.  Bank owned so needs some cleaning but no repairs.

Wow.  That sounds great – BUT…what can I sell the home I purchased for in 2004?!  The home that was used as the example above was sold for $145,000 in 2011.  Not bank owned and not short sale.

So the question becomes…Is NOW the right time for you to look at selling and buying a larger home and keep your monthly payment the same?  Is now the time to purchase a home when prices are low AND interest rates are low?

The timing may be perfect for you.

Buying vs. Renting.  That is a big question right now with the housing market.  Many people are so pessimistic about the outcome of the market, they are hesitant to get into home ownership.  Some analysts believe this could create a different crisis in the housing market.  One where qualified buyers are choosing to rent instead of buy because of worry about the market.  How do we address that and change their perspective on buying a home.  We have to analyze the market and area that they are looking in and calculate numbers for them.  Interest rates are historically low.  Many people in the Treasure Valley can actually purchase a home for less than what they are currently paying for rent.  Plus, homeownership offers many other benefits.  Here is an excerpt from an article written by Liz Davidson, CEO of  Financial Finesse on Forbes online:

Consider this:  A homeowner with a $1,500 monthly payment would still be writing the same check fifteen years later while prices everywhere increase around them.  In August 2011, the Consumer Price Index included a .4% increase in rents, the biggest increase since 2008, which represents an annualized increase of 4.8%.  If rents didn’t even increase that much but simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years.  The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation) and of course would end with a final payment. There might even be some real equity in the property, even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement.

The renter, by contrast has no equity in their home, so in addition to almost $900,000 in rent in the above example, the renter would also be giving up $400,000 in retirement assets (and that’s at a growth rate of just 1%– far lower than even the lowest growth rate over a 30 year time period).   At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference, not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?”

Link to full article:  http://www.forbes.com/sites/financialfinesse/2011/10/13/the-next-mortgage-crisis/

This does not take into account the tax savings and other savings of home ownership. 

Every situation is different and should be analyzed to see if home ownership is right for you.  There are some situations where it is better to rent than buy.  However, in many instances, now is the right time to jump off the fence into homeownership OR into purchasing an investment property that cash flows.