Hi All, hope everything is going well with you and your family. Sun has finally made it into North Idaho and I am expecting a nice/hot summer. I jumped in Lake CDA this morning – NOTE – it’s still cold. This edition of my NIRE Analysis will focus on:
REAL ESTATE MARKET UPDATE – if you want the charts that I usually send, reply with the request and I will “load you up”
FORECLOSURE UPDATE
SHORT SALE UPDATE
COMMERCIAL MARKET
NORTH IDAHO MARKET UPDATE
Currently there are approx 2844 residential listings in Kootenai County. Current market conditions tell us this is 12.5 months of inventory. 288 units sold last month ($45 Milliion in Volume) up from 177 ($36 Million) one year ago at this time – UP 38% compared April 09’ (in units) –
We have sold 918 units (as reported from MLS) since 1/1/10. The average sold price is 200K. You can expect a house priced around 200K to be on the market 116 days (of course, if it’s priced competitive). If a house is priced above 500K you can expect it to be on the market for 220+ days (upper range HAS to be top 3 in quality and price compared with competition if it’s going to have a chance at selling). The average home will rent for between $900-1150/month.
It will be interesting to see next month’s stats and the effect the expiration of the tax credit has on sales. Further – this came to me from one of my family members regarding the national market…
I went to a real estate conference yesterday. One of the guest speakers was from the Federal Reserve. While I am a little pessimistic about the current market and where it’s going, I was pretty stunned at what this guy had to say (these are his opinions and not that of the Fed). I thought I’d share some of his info:
1. 24% of all homes in the US have negative equity (70% in Vegas)
2. 23% of loans that have been delinquent 12 months - yes, 12 months - have not started foreclosure yet
3. 14.6% of mortgages are NOT current
4. 50% of loan modifications are in re-default after 9 months
5. Hotels have lost 50% of their value in last 24 months - particularly luxury hotels
6. Starting to see consistency in multi-family; however, watch the condo and timeshare market where you buy (eg. timeshares in Orlando can now be rented for $50 per WEEK).
7. Commercial Loans - can’t re-fi overleveraged properties
8. Regional Banks and Community banks own 26% and 47% of their portfolios in commercial loans - banks will continue to be hammered
9. Recovery is 2-4 years away
FORECLOSURE
REO agents are busy this year, and will continue to be for the next 2 years. REO property has accounted for 25% of our sales this year. The average sale price was $153,247 – the price it was listed at when it sells - $160,620. The original list price $171,183. What this tells you – when a bank lists their property and it doesn’t sell in 30 days they drop it 10K until it sells. As a buyer you can expect a 5% discount on the final list price (average bank takes 95.15% of list price). 232 foreclosure properties sold since 1/1/10, for an average of 62 days on the market.
186 Foreclosures on the market now – including pending. See the list below:
SHORT SALES
289 short sales are on the market now, 83 (28%) sold since 1/1/10. Banks are still taking 3+ months to respond, but I have noticed they are responding. Typically they are within 85-90% of market price, however there have been a few occasions where it is less. Here is the link to the short sales:
COMMERCIAL MARKET
333 total commercial listings on the market now. 15 (4.5%) have sold this year (see the list of what has sold here). It’s not looking to good in the commercial realm; however, there are nice commercial development bargains if you’re looking. Contact me for a list if you’re interested.
Thank you for taking the time to review our market conditions and/or look over our listings. If you have further questions or comments or would like to LIST or WRITE OFFERS, please let me know. As always, if you or your family/friends/clients need help with anything real estate in North Idaho, please do not hesitate to get in touch. I am always available and my website is always updated with the latest listings.
Hope all is well with you and your family.It has been getting pretty cold at nights around Coeur d’Alene, snow is expected soon definitely before Thanksgiving.In this newsletter, I would like to talk about 4 points:1.North Idaho Real Estate Market Conditions, 2.Commercial Property Sales3.$8,000 Tax Credit Extension4.REO and Short Sales
North Idaho Real Estate Market Conditions
Through October 09’ we are sitting with 8373 listings on the market, a 26 month supply at current selling levels.Last month we sold 317 UNITS (consider that is 634 sides to a transaction – we have around 850 real estate agents in our market area).This is actually an 8% increase in sold unit’s year over year.In the coming months we can expect inventory to drop significantly through January – however- I suspect we will see an increase in REO and short sale listings keeping prices low.Our average sold price now is $200,665 and it is 151 days on the market. The $100,000-$200,000 price range is still the hot price points with up to 29% pending ratios in those price categories.In the upper price ranges – $400,000-$2,000,000 there are 8 pendings and a total of 303 listings.I consider this price point Armageddon for residential units priced above 400K (the average price adjustment is $56K!).Please see the attached PDF files, which include: two year trend lines, Total Market Overview, for more information.
There have been a total of 57 commercial units sold (reported through MLS) in the last year.The average price per SQ/FT for commercial sold is $93/FOOT.Average price adjustment before it sell is 29%.Average sold is $447,496. Of course, many factors come into play (i.e. location) when looking at comparable pricing.Commercial money is still hard to come by and with the restructuring and bankruptcy of CIT it may get even tighter.Watch for commercial REO’s.Community banks appear to be holding most of the commercial REO inventory so you might check with your local banks for their commercial REO list.You can see all commercial inventory here: http://www.NorthIdahoCommercial.comPlease see the attached spreadsheet outlining the sold commercial data.
Late last week a bipartisan plan emerged in the Senate that would continue the $8,000 credit for first time purchasers beyond November 30, but would create a new, smaller credit of $6,500 for people who’ve owned and lived in their houses for five consecutive years and now want to buy another as their principal residence.It looks like this is going to go through.It is nice to see they are giving other buyers – like those that have owned their home for 5+ years an incentive to sell and repurchase.When this passes and you would like to list your home for sale and take advantage of this offer – LET ME KNOW!
Right now there are 112 Real Estate Owned (REO) listings on the market.Over 250 sold in the last year.26 sold last month representing about 8.2% of the closed inventory.You can view the current REO inventory here:
There are over 260 short sales on the market.Certain banks seem to be better than others in negotiating the short sales.My last short sale – we had approval in 1.5 months; my short sale before that 7 months!Big differences.To view the first 200 short sales on the market now see:
Thank you for taking the interest in our real estate market.If you would like specific information please do not hesitate to get in contact with me via email, phone or fax.Have a great Thanksgiving!
News out concerning the national sales data compiled for May. 1 in 3 homes sold was a foreclosure or property in a distressed sale. This is keeping sales prices down, but number of sales up. Locally, in North Idaho - Kootenai County specifically, we had 241 residential home sales in May. 25 of these were REO (Real Estate Owned) properties, 5 were short sales. 12% of our sales being distressed. This tells me that sellers of property are pricing their homes aggressively to compete with the distressed sales. Further, this is also telling me that banks are not just “dumping” properties but holding out for higher prices, getting into the real estate game. There are currently 84 REO properties on the market now. Let me know if you want a foreclosure list. Here is the rest of the article:
Coeur d’Alene, Idaho is truly a great place to live. Newsmax Magazine just ranked CDA, North Idaho a top 25 place to live according to lifestyle and ideals. Get the magazine, see the link!Coeur d Alene, North Idaho Top 25 Cities and Towns
I have grappled with this concept for the last couple of days, I figure now is the time to take a stab at explaining inflation effect on property owners, investors, and property buyers. I am no economist, just curious. First of all, I need to explain inflation in my simple mind. Inflation is the price of goods/services going up as a result of the increase in money supply - a decrease in purchasing power. As the FED prints more money it dilutes the value of the money currently in the market driving up prices of goods and services. As a counterbalance to the rise of inflation, the government and/or market raises interest rates. Somehow, unemployment, output and productivity come into play as well.
INCREASE IN FORECLOSURES - Now, as the price of goods and services go up, property owners have to spend more of their income on these items reducing the amount of disposable income. Homeowners that are at the edge of their expenses who do not have savings, become unemployed or have not had increases in salaries will be pinched on making mortgage payments. When a person has to choose between food for family or mortgage, the food will probably win. There will be an increase in foreclosures. Take into account adjustable mortgages as well, when interest rates reset, payments go up making the pinch and foreclosure statistics a whole lot worse.
BIGGER POOL OF RENTERS - When people lose their homes, they are still going to have to have shelter. I think investment properties, rentals, will have a steady availability of tenants. We are seeing this now in North Idaho. Leases/rents are negotiable and reset after a set period of time investors can increase rents based upon inflation creating a hedge that a typical homeowner cannot.
INVEST IN ASSETS THAT CAN PAY OFF YOUR DEBT - Creating hedges in an inflationary environment is key to wealth protection. Inflation hedges include tangibles and goods (commodities). Land and property is definitely an asset but you have to buy right. Finding property deals that are close to the bottom as possible is key. Any good agent can give you a synopsis on the current market conditions in the area you would like to purchase. Good indicators would be level of foreclosures and short sales, active price ranges, and amount of solds/pendings in each price range.
HYPERINFLATION (a long shot) - Lets say hyperinflation comes around - that is - huge increase of inflation month over month. The value of money changes drastically and becomes worth less and less (i.e. it takes much more dollars to purchase the same thing). It makes sense if you have tangibles that increase at the same rate, if you owe 200,000 on your property and a pound of gold is worth 200,000 you can sell and pay off your house. I see having debt as being a plus in a hyperinflationary environment, AS LONG AS, you have assets, tangibles, goods that can counterbalance. The value in this for example, is now you can buy pound of gold for under 16,000. You have got to have a means to create income that is adjusted to inflation on a daily basis.
IN SUMMARY - The key to inflation and the housing market on you, the property purchaser is to make sure you get the best deal you can on a house you have interest in. Be aware of what is on the market, and the direction the market is headed in you area. Act in front of the market. Your real estate agent should be able to help you with local housing information. If you can get a loan, buy an investment property in foreclosure or one that is priced right. If your the property SELLER, get your price in front of the market now! That is where the buyer pool is. If you are backwards in value to loan on your house, shortsale it. Banks are taking losses on their loans, freeing up homeowners that could go into foreclosure. Good luck and let me know if I can help!
Property buyers in the $125-175k price range are the winners in this market. Over 700 options available, including 26 foreclosures! We are almost experiencing a 20% pending ratio with listings available and listings with accepted offers. A buyer can reasonably expect to get a property within 97% of list price. I currently beat that with my clients, I typically get within 90-94% of ask price with buyers I represent. Let me help you navigate the process. Real estate is what I do.
I am a very visual person, and I wish a video came with this report (LOL). A visual guide to the state of the economy county by county. Using this chart, you can see what real estate market areas are improving and which are being hit the hardest in almost real time.
The population of Kootenai County is 137,475. According to this report, 1.16% of property is in foreclosure in Kootenai County. Not bad, considering parts of California and WA are over 5 times that amount. See the link here:
Many people were saying Idaho realestate markets were going to get better after the election, well, I am stillwaiting. North Idaho Real Estate in particular had a rough October.October 07 we sold 397 units, October 08 we sold 242. An interesting fact,between the price ranges of 400K-450K in NORTH IDAHO, there is 1 pendingsale. However, the good news; property is still moving. It may be a greattime take advantage of some of these opportunities. Below, I am goingthrough two aspects/opportunities of the market, SHORT SALES, andMULTI-FAMILY. Also, attached is the most complete North Idaho Real EstateMarket SNAPSHOT for your own analysis (I’ve left out land and commercial inthis report – contact me with specific questions).
Short Sales
Short sales continue to infiltrate our market. A strategy that is surfacingin short sales includes approaching the seller with an offer of 50-60% ofmarket value. The listing agent then present’s the seller’s information tothe bank, starting the short sale process (could take 6+ weeks). If thebank accepts then the investor gets to buy a property for a great price, ifthe bank counters, the listing agent now knows at what price to market theproperty and the investor does not have to commit OR the investor may beable to SELL THE OPTION to purchase. A win-win. If you have interest intrying this approach, let me know. To see a list of short sale properties,see the below link:
