Boise area real estate market thoughts

January 16th, 2009 Posted in Boise, General, Market Conditions, real estate

The last several months have been fascinating to watch unfold. Although you may take the statement as somewhat sadistic, it really is amazing to see how our entire world is linked in so many ways (most obviously economically right now). The local real estate market has also been an interesting study. Watching the ups and downs, trying to figure out what’s going to happen next, working to find the best deals, and hoping for the best for everyone.

I have had the pleasure of working with a couple of buyers that have been a lot of fun and taught me some important lessons about the current market.

1. A deal is a deal: I tell people all the time that, looking at it from a historical and current perspective, a deal looks good on paper. However, I don’t know what that deal will look like next month, next year, or beyond. However, there comes a time when people hunker down and make the deal. I have been AMAZED at some of the deals out there. I understand that we may not have yet reached “the bottom,” but the fact of the matter is there are some great homes and great prices, if you’re in the position and situation to make something happen.

2. Bank owned properties offer the best opportunties: Banks are in the business of selling money, not owning real estate. They don’t like it and they don’t want it. They are willing to negotiate and make things happen. They would rather get somebody in the home and cash out before sitting on it, waiting for the market to turn.

3. Don’t be afraid of short-sales, but it has to be the right fit: Short sales offer buyers the opportunity to negotiate a better deal with the bank prior to a foreclosure. Banks are motivated so they don’t have to go through the hassle and expense of foreclosing. The big deal here is to have some flexibility and the ability to wait a little bit. Investors can clean up on this type of deal. Homebuyers looking for an exact fit may not enjoy the process as much. You may end up writing a couple of deals and waiting a long time to make one go through, but when it does it ends up being a great deal.

4. The market does not represent traditional sellers/buyers: The current market right now is based on short-sales, foreclosures, investors, and deal-finders. When somebody asks how much their home is worth, it’s really tough to come up with an intelligent answer. The basic thought process goes like this: It’s worth more than those selling around you as short-sales and REO’s, but you wouldn’t be able to sell it for what it’s worth right now. I know that’s a bad answer, but it’s the truth. With so many motivated sellers out there right now, that becomes the market. The market for traditional sellers has been overshadowed and overtaken by deal properties. Until the foreclosures stop and the short sales dry up, this may be what we are in for. The great part about it, however, is it won’t last forever. If we’re not forced to sell, we can simply wait until a better day and come out of it better than it appears today.

“I’m waiting…don’t tell me it’s a buyer’s market! Tell me when it’s better and I’ll think about it!” This approach is fine with me. It’s interesting, however, to see how wealth is built–it’s all in how you BUY. The money is made at purchase, and most big deals happen when the other party is motivated (like banks right now). They are willing to sell for less to make a deal happen.

Anyway…I wanted to share these thoughts with you and let you know that an active market exists right now…you just have to see it for what it is. Those looking for a deal can find it now with the right mindset and goals.

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