Boise’s Best Realtors

Although the housing recovery continues to roll in most parts of the U.S., there were fresh signs last week about the bumps ahead.

Without question, the latest unemployment and new layoff numbers represent the biggest impediments in the way of a full, vigorous recovery in home sales and prices. Though some economists say the recession either ended in August, or will be over shortly, the latest jump in unemployment to 9.7 percent, the highest rate since 1983, is like a nagging pain that just won’t go away soon.

On the other hand, most housing indicators remain positive. Spending on residential construction — that’s single and multifamily housing — surged by seven percent last month, and is on track to post its first double-digit annualized rate of increase after 13 straight double-digit quarterly declines.

Housing prices in key local markets around the country also continued to show healthy increases.

Meanwhile, the mortgage market continues to beckon to home buyers with near record low rates. Applications for all new loans jumped by 17 percent last week, according to the Mortgage Bankers Association, including a nearly 10 percent increase in applications to purchases houses.

Rate quotes dropped to a flat five percent for 30-year fixed rate mortgages, and just four and a half percent for 15 year loans.

And remember, these are average rate quotes. People with superior credit or extra big downpayments are hearing quotes in the upper 4 percent range for 30 year and low four percent range for 15 year fixed.

It just doesn’t get much better than that.

For real estate questions please contact; Jake Conklin at (208) 866-7866 or  email: jake@jakeconklin.com

Savvy investors are always the first to jump in a potentially profitable housing market and a new survey indicates things are heating up.

More than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, according to a recent Move.com Homeownership Survey.

Foreclosure buyers account for 25.3 percent of consumers interested in purchasing a home and 42 percent of potential foreclosure buyers regard their purchases as investments, while 57.6 percent plan to live in the foreclosed home themselves.

“This latest Homeownership Survey validates what many had hoped to see in the housing markets — affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first time home buyers to enter the market,” said Move, Inc.’s chief revenue officer, Errol Samuelson.

Interest rates below 5 percent for much of the year and low home prices, which may be at or near market bottom, are also bringing investors back to the fold.

The new and improved home-buyer tax credit, no longer just for first time home buyers, can also be a boost for those taking the practical approach to investing by buying their own home first.

The survey of 1,004 consumers, conducted from October 16 to 18 this year, found:

• Foreclosure buyers are confident they will profit from discounted purchase prices, as well as healthy appreciation rates over the next five years.

• Most foreclosure buyers, 58.2 percent, expect to pay 20 percent or less than market price for a foreclosure, while 38.5 percent expect a 25 percent or greater discount.

• Expectations are high — 73 percent expect their properties to appreciate ten percent or more in five years, 28 percent expect their purchases to appreciate 20 percent or more.

Given the current market of flat and falling home prices, that may sound like high hopes, but RealtyTrac.com explains that lenders want to unload overhead-heavy inventories of repossessed and foreclosed home.

That forces lenders to list their homes below market and offer properties at a discount, giving the buyer some built in equity.

• Foreclosure buyers intend to convert their foreclosures into rentals (13.2 percent), fix them up for re-sale (11.3 percent), or house a family member until the home can be sold at a profit (17.4 percent).

In some markets, especially resort and vacation rental markets, where rents are higher, conditions bode well for investors who want to enjoy positive cash flow as they wait for equity to build.

“If you find a well priced property located in a healthy rental market and are able to manage and monitor the property and maintain a positive cash flow from the onset for a unit used strictly for income purposes, rather than being held with the expectation of price appreciation, this could be a good time to become a landlord,” said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.