Dan Hernandez, the newly installed president of the Ada County Association of Realtors, says you have to earn the right to be a successful residential real estate agent. As a young man back in Los Angeles, Hernandez routinely stayed after hours making up to 50 cold calls a night. He also went door-to-door introducing himself to people, most of whom had no use for his services. There was time spent working the "For Sale By Owner" and expired listings markets, as well as various Internet lead generation systems. The hard work, and the law of averages, has paid off in a career dating back 14 years. Hernandez now heads an organization of some 4,000 Ada County Realtors who are struggling to weather the worst sales downturn in recent memory.
Q: Has the art of selling residential real estate changed?
A: The basic fundamentals have not changed, As I told you, I cold called, knocked on doors and worked the lead box. In my view, many agents came into the business for quick buck. And they have not paid their dues of developing relationships or databases that an experienced agent has. That, in my view, has a lot to do with why they have failed. They were not willing to put in the work needed to be successful. Today, the basic fundamentals have not changed. You need to go out there and meet the people. You need to put yourself in a position where you are handing out your card and saying, "Are you interested in buying a home or selling one in the near future?" Too many agents don't succeed because they sit down and wait for the phone to ring. It requires much more than that. Buyers and sellers are a lot more sophisticated than they have been. They're looking for a qualified professionals.
Q: In your 14 years, have you ever seen a market as bad as this one?
A: This is nothing. I was in Los Angeles when the market crashed in the beginning of 1990. The market almost died overnight and seemed to hit rock bottom. So this is nothing. We're in a very strong, healthy market. I'm still representing buyers that are buying homes, and I'm still selling homes.
Q: Are there any signs that we've bottomed out and are turning upward?
A: I can tell you from my personal experience as a Realtor out there on the streets that, in the last three or four weeks, I have seen more activity than I have seen in several months. Homes that had been languishing for a period of time now have multiple offers. I have spoken to other agents and asked, "Is it just me?" Their response has been no, that they have seen the uptick, too.
Q: What do you say to people who say the Treasure Valley has not seen the worst when it comes to the mortgage crisis?
A: My understanding about the subprime crisis is that more homes with those types of (adjustable) loans will reset in '08 than in '07. So I believe more homes will go into default this year than we had last year. Having said that, the January (sales) numbers showed that the median price for resale (existing homes) continued to increase, jumping almost 4 percent from January to January.
Q: But how can we be in a downturn and still see increases in median prices?
A: The January numbers showed that in Ada County sales were down 33 percent from the previous January. So people are being much more cautious. But once they get something, it holds its value. If you look at as a multiyear investment, you're going to come out ahead.
Q: But there are lot of things putting downward pressure on home prices nationwide. Whyhasn't it happened here?
A: Because Boise continues to be one of the most desirable places to live in the nation. I deal with quite a few out-of-state buyers. I'm going to have to use the C word here, but the majority are still coming in from California. The number of Californians who have been able to sell their homes has dropped off because that market is flat. But those that are successful in selling want out and are still moving here. Boise is their location of choice.
Q: Again, what about those median prices?
A: If you look at other areas, they mention having home appreciation of 35 percent or even 50 percent. We didn't have that. We went up 20 percent. But averaged over five years, we're a solid 10 percent a year. People here ask me when is the housing bubble is going to burst. My response is that there is no bubble because what we've had was steady growth that has been relatively conservative compared to what we have seen elsewhere. When appreciation rates shoot straight up, they're bound to come back down. And that's what's happening elsewhere.
Q: Was having so many outside investors here bad for the market?
A: I can't say yes and I can't say no. But I look back at the level of investors we had, and it was bad for the community. I saw many transactions where the buyers were investors who wrote and offer on new construction with the expectation that by the time the transaction closed there would already be some equity there. And when it did not reach the level that they anticipated, I saw investors bail, giving up there ernest money just to get out.
Q: Will we see investors returning to the Treasure Valley?
A: I think Californians are "flirting" with the Idaho housing market.
Q: We're seeing a lot of foreclosures locally. Won't dumping that many homes on the market depress home values even more?
A: Again, I'm looking at my own experience as a Realtor out there on the street, and not as president of the association. And as I mentioned before, I'm still selling homes - even with the high numbers of homes out there that are in default. I know many agents are working the default market and are doing quite well. Even with the number of defaults, I have not seen any change in the level of activity.
Q: How many agents has the association lost during this downturn?
A: Strangely enough, we're not seeing a lot. We budgeted for an 8 percent loss overall. But based on dues collection, it has been less than half of what we expected.
Thursday, March 06, 2008
Monday, February 04, 2008
Obama wows, inspires crowd at packed arena.
'And they told me there were no Democrats in Idaho'
BY ANNA WEBB AND BRIAN MURPHY - awebb@idahostatesman.com bmurphy@idahostatesman.com
Edition Date: 02/03/08
Jaliya Cunningham might have been the youngest person in Taco Bell Arena Saturday, decades away from casting a vote and certainly indifferent to the commotion around her.
But her parents weren't going to let the 2-month-old miss what they say is history in the making.
"This is something we'll be able to tell her about when she grows up," said Shellie Cunningham Jr., Jaliya's father.
Just three days before the Idaho Democratic caucus, Sen. Barack Obama spoke to an arena-record crowd of 14,169 people - almost triple the nearly 5,000 Democrats who caucused statewide in 2004.
"And they told me there were no Democrats in Idaho," Obama said at the beginning of his 45-minute speech.
The crowd validated Obama's decision to visit Republican-dominated Idaho before the all-important Super Tuesday. Democrats in 22 states will decide between Obama, from Illinois, and New York Sen. Hilary Clinton.
Obama's upbeat speech validated the decision many made to wake before dawn and line up in frigid temperatures to get a seat or stand in the aisles.
"There's something about him, something about what he has to say that people want to hear," said Steve Lolar, a 38-year-old Boise State student.
People gave many reasons for coming to Taco Bell Arena - to be part of Obama's history-making run for president; to make up their minds before Tuesday's caucus; or to catch a glimpse of a candidate frequently described as a "rock star."
Even after arena officials opened more seating, they had to turn several thousand more people away.
"I've lived in Idaho nearly 32 years, and this is the first chance I've had to see a presidential candidate, especially a Democrat," said Andrea Leevs, a Boise social worker.
Hand-painted banners hung from every seating level. Tubas from the Borah High School band glinted. Introduced by former Gov. Cecil Andrus, Obama took the stage to a long, loud ovation, flashed his now-familiar smile and thanked his local supporters for their work.
The speech held no surprises - except, perhaps, for Obama equating his long-shot status to that of the Boise State football team.
"It's fun being an underdog," said Obama. He leads Clinton in Idaho but is running closely behind her in most polls.
Obama offered a general call for national change and hope and laid out specific proposals on the economy and energy policy.
He touted the need for improved health care and educational systems. He called this a "defining moment in history" when the country needs to pay attention to a planet in environmental peril, find a way to exit the Iraq War, and support teachers and veterans.
The themes are Obama stump-speech standards, but they repeatedly brought the Boise crowd to its feet.
"The war is my main concern," said Shellie Cunningham. "Our brothers and sisters are dying daily. Why?"
Francine Gonzalez also wanted to hear Obama's thoughts on the war.
"I have young sons," said Gonzalez.
She's undecided but glad Obama visited the state.
"Usually, they don't come here, or if they do, it is for a fundraiser that costs $250 a ticket." she said. "It's not an opportunity for everyday people."
Marsha Meredith of Boise has never been involved with politics before, but Obama's speech made her cry.
"I'm so happy right now," she said. "Everything he said about supporting teachers, and schools, the environment, I've been waiting so many years for this and have had nowhere to go."
Clearly aware he was speaking in one of the reddest states in the union, Obama briefly touched on his Christian faith and support for the rights of gun owners, notably hunters.
The Clinton campaign questioned his consistency on gun ownership, and the Republican National Committee rebuked Obama for his positions on guns and foreign policy.
"As if his newly minted title of 'most liberal' senator was not enough, Barack Obama has enlisted the help of Ted Kennedy to advocate proposals that are out of touch with mainstream values," said Paul Lindsay, a regional press secretary for the RNC.
Obama said he has tried to reach out to conservatives and Republicans, citing his ability to work across party lines.
"We can disagree without being disagreeable," he said.
Ron Fortner, a history teacher at Caldwell High, first voted Republican in the 1960s, but got to the arena at 5:15 a.m. to see Obama.
"I was a Nixon man then. This year, I'm wide open," he said. "It's not often you get to see history."
BY ANNA WEBB AND BRIAN MURPHY - awebb@idahostatesman.com bmurphy@idahostatesman.com
Edition Date: 02/03/08
Jaliya Cunningham might have been the youngest person in Taco Bell Arena Saturday, decades away from casting a vote and certainly indifferent to the commotion around her.
But her parents weren't going to let the 2-month-old miss what they say is history in the making.
"This is something we'll be able to tell her about when she grows up," said Shellie Cunningham Jr., Jaliya's father.
Just three days before the Idaho Democratic caucus, Sen. Barack Obama spoke to an arena-record crowd of 14,169 people - almost triple the nearly 5,000 Democrats who caucused statewide in 2004.
"And they told me there were no Democrats in Idaho," Obama said at the beginning of his 45-minute speech.
The crowd validated Obama's decision to visit Republican-dominated Idaho before the all-important Super Tuesday. Democrats in 22 states will decide between Obama, from Illinois, and New York Sen. Hilary Clinton.
Obama's upbeat speech validated the decision many made to wake before dawn and line up in frigid temperatures to get a seat or stand in the aisles.
"There's something about him, something about what he has to say that people want to hear," said Steve Lolar, a 38-year-old Boise State student.
People gave many reasons for coming to Taco Bell Arena - to be part of Obama's history-making run for president; to make up their minds before Tuesday's caucus; or to catch a glimpse of a candidate frequently described as a "rock star."
Even after arena officials opened more seating, they had to turn several thousand more people away.
"I've lived in Idaho nearly 32 years, and this is the first chance I've had to see a presidential candidate, especially a Democrat," said Andrea Leevs, a Boise social worker.
Hand-painted banners hung from every seating level. Tubas from the Borah High School band glinted. Introduced by former Gov. Cecil Andrus, Obama took the stage to a long, loud ovation, flashed his now-familiar smile and thanked his local supporters for their work.
The speech held no surprises - except, perhaps, for Obama equating his long-shot status to that of the Boise State football team.
"It's fun being an underdog," said Obama. He leads Clinton in Idaho but is running closely behind her in most polls.
Obama offered a general call for national change and hope and laid out specific proposals on the economy and energy policy.
He touted the need for improved health care and educational systems. He called this a "defining moment in history" when the country needs to pay attention to a planet in environmental peril, find a way to exit the Iraq War, and support teachers and veterans.
The themes are Obama stump-speech standards, but they repeatedly brought the Boise crowd to its feet.
"The war is my main concern," said Shellie Cunningham. "Our brothers and sisters are dying daily. Why?"
Francine Gonzalez also wanted to hear Obama's thoughts on the war.
"I have young sons," said Gonzalez.
She's undecided but glad Obama visited the state.
"Usually, they don't come here, or if they do, it is for a fundraiser that costs $250 a ticket." she said. "It's not an opportunity for everyday people."
Marsha Meredith of Boise has never been involved with politics before, but Obama's speech made her cry.
"I'm so happy right now," she said. "Everything he said about supporting teachers, and schools, the environment, I've been waiting so many years for this and have had nowhere to go."
Clearly aware he was speaking in one of the reddest states in the union, Obama briefly touched on his Christian faith and support for the rights of gun owners, notably hunters.
The Clinton campaign questioned his consistency on gun ownership, and the Republican National Committee rebuked Obama for his positions on guns and foreign policy.
"As if his newly minted title of 'most liberal' senator was not enough, Barack Obama has enlisted the help of Ted Kennedy to advocate proposals that are out of touch with mainstream values," said Paul Lindsay, a regional press secretary for the RNC.
Obama said he has tried to reach out to conservatives and Republicans, citing his ability to work across party lines.
"We can disagree without being disagreeable," he said.
Ron Fortner, a history teacher at Caldwell High, first voted Republican in the 1960s, but got to the arena at 5:15 a.m. to see Obama.
"I was a Nixon man then. This year, I'm wide open," he said. "It's not often you get to see history."
Tuesday, January 29, 2008
Home foreclosure rate soars in 2007
By ALEX VEIGA - AP Business Writer
Edition Date: 01/29/08
LOS ANGELES — The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the previous year, a real estate tracking company said Tuesday. Many homeowners started to fall behind on mortgage payments in the last three months, setting the stage for more foreclosures this year.
About 1.3 million homes received foreclosure-related warnings last year, up from 717,522 in 2006, Irvine-based RealtyTrac Inc. said. Foreclosure filings rose 75 percent from the previous year to 2.2 million.
More than 1 percent of all U.S. households were in some phase of the foreclosure process last year, up from about half a percent in 2006, RealtyTrac said.
Nevada, Florida, Michigan and California posted the highest foreclosure rates, the company said.
The filings included notices warning owners that they were in default, or that their home was slated for auction or for repossession by a bank. Some properties may have received more than one notice if the owners had multiple mortgages.
A late-year surge in the number of properties reporting foreclosure filings suggests that many are in the initial stages of the foreclosure process and could end up lost to foreclosure this year unless lenders or the government steps in, RealtyTrac said.
"It does appear that we're seeing a new batch of properties enter the process," said Rick Sharga, RealtyTrac's vice president of marketing.
RealtyTrac is forecasting that the pace of foreclosure filings will remain steady, rather than accelerate during the first half of 2008.
"Assuming nothing else bad happens economically ... we will have exhausted the bulk of the worst-performing loans by the end of June," Sharga said, referring to adjustable-rate mortgage loans made to borrowers with poor credit.
Many of these subprime loans defaulted last year, triggering a credit crisis and saddling major financial institutions with losses.
More than 1.8 million subprime mortgages are scheduled to reset to higher interest rates this year and next.
Last year's explosion in foreclosure activity came amid a worsening housing downturn, as falling home values ate into homeowners' equity, making it harder for many to refinance into more affordable loans or to find buyers. Those options had helped keep troubled homeowners from sliding into foreclosure.
"We went from a sort of buying frenzy to a foreclosure frenzy in the last two years," Sharga said.
Recent efforts by government and mortgage lenders to help homeowners at risk of falling seriously behind on mortgage payments have had a marginal impact on the U.S. foreclosure rate so far, Sharga added.
In December alone, foreclosure filings soared 97 percent from the same month a year earlier to 215,749. It was the fifth consecutive month in which foreclosure filings topped more than 200,000, RealtyTrac said.
In the fourth quarter, filings rose 86 percent from the prior-year quarter but only 1 percent from the third quarter.
Nevada had the highest foreclosure rate in the nation last year, with 3.4 percent of its households receiving foreclosure filings. That was more than three times the national average, RealtyTrac said.
The state had 66,316 filings on 34,417 properties in 2007, up more than 200 percent from 2006's total.
Florida had more than 2 percent of its properties in some stage of foreclosure last year. The state reported 279,325 filings on 165,291 homes, more than twice the previous year's total.
In Michigan, where job losses are pressuring many homeowners, 1.9 percent of all households received a foreclosure filing last year. In all, 136,205 filings were issued on 87,210 properties, up 68 percent versus filings in 2006.
California led the nation in total foreclosure filings and the number of homes in some stage of foreclosure last year.
A total of 481,392 filings were issued on 249,513 properties, more than triple the number of filings in 2006, RealtyTrac said.
In all, 1.9 percent of households in California received foreclosure filings.
Many of the homes receiving foreclosure filings in the state were in the inland markets, where new construction and more affordable prices helped fuel a spike in sales toward the end of the housing boom.
Other states in the 2007 foreclusure top 10 were Colorado, Ohio, Georgia, Arizona, Illinois and Indiana.
Edition Date: 01/29/08
LOS ANGELES — The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the previous year, a real estate tracking company said Tuesday. Many homeowners started to fall behind on mortgage payments in the last three months, setting the stage for more foreclosures this year.
About 1.3 million homes received foreclosure-related warnings last year, up from 717,522 in 2006, Irvine-based RealtyTrac Inc. said. Foreclosure filings rose 75 percent from the previous year to 2.2 million.
More than 1 percent of all U.S. households were in some phase of the foreclosure process last year, up from about half a percent in 2006, RealtyTrac said.
Nevada, Florida, Michigan and California posted the highest foreclosure rates, the company said.
The filings included notices warning owners that they were in default, or that their home was slated for auction or for repossession by a bank. Some properties may have received more than one notice if the owners had multiple mortgages.
A late-year surge in the number of properties reporting foreclosure filings suggests that many are in the initial stages of the foreclosure process and could end up lost to foreclosure this year unless lenders or the government steps in, RealtyTrac said.
"It does appear that we're seeing a new batch of properties enter the process," said Rick Sharga, RealtyTrac's vice president of marketing.
RealtyTrac is forecasting that the pace of foreclosure filings will remain steady, rather than accelerate during the first half of 2008.
"Assuming nothing else bad happens economically ... we will have exhausted the bulk of the worst-performing loans by the end of June," Sharga said, referring to adjustable-rate mortgage loans made to borrowers with poor credit.
Many of these subprime loans defaulted last year, triggering a credit crisis and saddling major financial institutions with losses.
More than 1.8 million subprime mortgages are scheduled to reset to higher interest rates this year and next.
Last year's explosion in foreclosure activity came amid a worsening housing downturn, as falling home values ate into homeowners' equity, making it harder for many to refinance into more affordable loans or to find buyers. Those options had helped keep troubled homeowners from sliding into foreclosure.
"We went from a sort of buying frenzy to a foreclosure frenzy in the last two years," Sharga said.
Recent efforts by government and mortgage lenders to help homeowners at risk of falling seriously behind on mortgage payments have had a marginal impact on the U.S. foreclosure rate so far, Sharga added.
In December alone, foreclosure filings soared 97 percent from the same month a year earlier to 215,749. It was the fifth consecutive month in which foreclosure filings topped more than 200,000, RealtyTrac said.
In the fourth quarter, filings rose 86 percent from the prior-year quarter but only 1 percent from the third quarter.
Nevada had the highest foreclosure rate in the nation last year, with 3.4 percent of its households receiving foreclosure filings. That was more than three times the national average, RealtyTrac said.
The state had 66,316 filings on 34,417 properties in 2007, up more than 200 percent from 2006's total.
Florida had more than 2 percent of its properties in some stage of foreclosure last year. The state reported 279,325 filings on 165,291 homes, more than twice the previous year's total.
In Michigan, where job losses are pressuring many homeowners, 1.9 percent of all households received a foreclosure filing last year. In all, 136,205 filings were issued on 87,210 properties, up 68 percent versus filings in 2006.
California led the nation in total foreclosure filings and the number of homes in some stage of foreclosure last year.
A total of 481,392 filings were issued on 249,513 properties, more than triple the number of filings in 2006, RealtyTrac said.
In all, 1.9 percent of households in California received foreclosure filings.
Many of the homes receiving foreclosure filings in the state were in the inland markets, where new construction and more affordable prices helped fuel a spike in sales toward the end of the housing boom.
Other states in the 2007 foreclusure top 10 were Colorado, Ohio, Georgia, Arizona, Illinois and Indiana.
Boise, Nampa make list of 100 best cities for kids
- STATESMAN STAFF
Edition Date: 01/27/08
Boise has been named one of the 2008 100 Best Communities for Young People from the America's Promise Alliance, a national alliance dedicated to children and youth.
Nampa also won the award, which recognizes communities considered to be the best places for young people to grow up. More than 300 communities in 50 states applied.
Some of the youth-oriented programs listed in the report include the Mayor's Council on Children and Youth, which created an online network of after-school sites at www.after3boise.org, and construction of three new community centers to provide neighborhood-based programs for kids at schools.
For more details about the 100 Best competition, please visit www.americaspromise.org.
Edition Date: 01/27/08
Boise has been named one of the 2008 100 Best Communities for Young People from the America's Promise Alliance, a national alliance dedicated to children and youth.
Nampa also won the award, which recognizes communities considered to be the best places for young people to grow up. More than 300 communities in 50 states applied.
Some of the youth-oriented programs listed in the report include the Mayor's Council on Children and Youth, which created an online network of after-school sites at www.after3boise.org, and construction of three new community centers to provide neighborhood-based programs for kids at schools.
For more details about the 100 Best competition, please visit www.americaspromise.org.
Why does one home sell while another doesn't?
Realistic pricing is the key in a sluggish market, experts say, and location helps, but some sellers are caught in a mortgage bind
1/2
AP
Owners: Jesse and Christine Testa
Address: 7204 W. Tobi Court
City: Boise
Square feet: 1,500
Number of bedrooms: 3
Sale price: $214,000
Neighborhood: Palisades Addition
Time on market: 5 days
AP
Owners: Doug and Becky Langford
Address: 95 W. Rockford St.
City: Meridian
Square feet: 1,762
Asking price: $209,000
Number of bedrooms: 3
Neighborhood: Meridian Heights
Time on market: Since February 2007
BY JOE ESTRELLA - jrestrella@idahostatesman.com
Edition Date: 01/25/08
This is the tale of two Treasure Valley homes.
One sold five days after being listed. One has languished on the market since February 2007.
It is also a story of how over-priced homes that often sold in a day during the 2005-06 housing boom are now a drag on a single-family residential home market. And it is a story about what homeowners must endure in a down market.
The stories have a moral: Price your home realistically, and it will sell.
These two homes are part of a market that was still flooded with 6,448 homes for sale at the end of 2007, though that's 1,425 homes fewer than last summer.
The one that sold within days of its listing is a 1,500-square foot, two-story, three-bedroom home at 7204 W. Tobi Court in Northwest Boise. Owners Jesse, 31, and Christine Testa, 27, listed the home the day after Thanksgiving. By the following Tuesday, they had a buyer. Sales documents were being prepared, and earnest money had changed hands.
Jesse Testa credits the quick sale to improvements like the hardwood floors he put in on the second floor. But he also credits the couple's real estate agent, Horace Smith of HMS Realty, who had been preaching that the days of selling a home in a single day were gone, replaced by a slumping market where properties must be be priced realistically.
That advice means an owner today often has to settle for less.
"Price is very important," said Smith, who has been selling real estate since 1970. "If you can get people to do the right thing (price-wise), then they have an excellent chance of selling. If not, it's just going to sit there."
Built in 2002, the Testas' home was a narrow, two-story row house near Gary and State streets. Its attractions include wood floors in the kitchen and dining area, crown molding throughout, 9-foot ceilings and stairs carpeted down the middle with white painted wood on either side.
It was also just 15 minutes away from Boise State University, where Jesse Testa is taking business courses in hopes of moving into management at Motive Power, a Boise-based manufacturer of locomotive engines where he works as a welder. His wife is a nurse at St. Luke's Regional Medical Center in Downtown Boise. They bought the home during the housing boom for just over $150,000.
When it came time to sell, they priced their house at $214,000, which was $8,000 below its assessed value. The home immediately caught the attention of a family of four that had been living in a rental home. "I knew they had bought the house the first time they saw it," Testa said. The Testas got their asking price.
He said some residents have not accepted the realities of the current Treasure Valley single-family home market.
"We just wanted to sell our home. There was no reason to be super-greedy," Testa said,
The couple now live in a $275,000, three-bedroom, 1,800-square-foot home in Eagle, where Jesse Testa has more garage space for his collection of motorcycles.
It hasn't been nearly as easy for Doug and Becky Langford, who have had their home at 95 W. Rockford St. in the Meridian Heights subdivision on the market for almost a year. The subdivision sits just off Meridian Road near Victory Road.
Doug Langford, a financial adviser with Beneficial Financial Group, admits their first mistake was wasting the first six months trying to sell their 1,762-square-foot, ranch-style home themselves.
The couple, who have since moved to Ogden, Utah, are still making mortgage payments on the property. It has not received a single offer, despite the Langfords' decision to slash the original $220,000 price to $209,000, he said.
"And there's a good chance that we're going to cut the price again," Langford said.
Meanwhile, the couple, who are expecting their first child, are renting a basement apartment while they wait for their home to sell.
But at $209,000, the house is still priced well above its assessed value of $185,000, according to the Ada County assessor's office.
Phil Hoover, an associate broker with Re/Max West who has been in the business for 35 years - including the last seven in the Treasure Valley - insists there is rarely any correlation between the seller's asking price and the 2007 assessed value. He is not the Langfords' real estate agent.
Don McFarland, another broker with Re/Max West, says a home priced below its assessed value "is going to get my attention," but argues there are many reasons why a home may be priced lower than its assessment, including poor condition, a poor location, difficulty showing a rental house because a tenant is not cooperating, or pet damage.
Ada County Assessor Bob McQuade isn't so sure. "We may have under-valued the home by $10,000," he said. "But if it's been sitting there that long, chances are we valued it right."
Langford said his real estate agent has been after the couple to drop their price to $205,000.
"He said that if we'd drop it to $200,000 it would probably sell tomorrow," Langford said.
Shaun Tracy, an associate broker with Re/Max Capital City who tracks the local market, said there could be a litany of reasons why the Langfords' home has failed to sell.
Originally, the subdivision faced a junkyard, which "got it off on the wrong foot," he said. And part of the subdivision backs up to Kuna/Meridian Road, while another part sits adjacent to a mobile home park.
At 1,762 square feet, the Langfords' home is one of the larger ones in the subdivision. That may hurt its sale prospects, too.
"People like to buy homes next to the larger homes because it makes their values go up," Tracy said. "You always want to be the small fish in the big pond."
Finally, Tracy said, the highest price for a home in Meridian Heights in 2007 was $219,000, the lowest $149,900.
"He (Langford) needs to be at about $199,900," Tracy said.
But Langford said selling the house will not end his problems.
He said the couple owe $225,000 on the home. They purchased it using an 80/20 financing plan that amounts to two mortgages, one for 80 percent of the home's value, one for 20 percent.
It is a financial mechanism designed for buyers who don't want to pay mortgage insurance or have much of a down payment. But if a buyer defaults, he is on the hook for two mortgages, not one.
So, if the Langfords sell for $200,000, they will still need to take out a $25,000 loan to pay off the second mortgage.
"That's why I listed it at the price I did," Langford said. "I didn't want to take out a $25,000 loan, and get nothing for it."
1/2
AP
Owners: Jesse and Christine Testa
Address: 7204 W. Tobi Court
City: Boise
Square feet: 1,500
Number of bedrooms: 3
Sale price: $214,000
Neighborhood: Palisades Addition
Time on market: 5 days
AP
Owners: Doug and Becky Langford
Address: 95 W. Rockford St.
City: Meridian
Square feet: 1,762
Asking price: $209,000
Number of bedrooms: 3
Neighborhood: Meridian Heights
Time on market: Since February 2007
BY JOE ESTRELLA - jrestrella@idahostatesman.com
Edition Date: 01/25/08
This is the tale of two Treasure Valley homes.
One sold five days after being listed. One has languished on the market since February 2007.
It is also a story of how over-priced homes that often sold in a day during the 2005-06 housing boom are now a drag on a single-family residential home market. And it is a story about what homeowners must endure in a down market.
The stories have a moral: Price your home realistically, and it will sell.
These two homes are part of a market that was still flooded with 6,448 homes for sale at the end of 2007, though that's 1,425 homes fewer than last summer.
The one that sold within days of its listing is a 1,500-square foot, two-story, three-bedroom home at 7204 W. Tobi Court in Northwest Boise. Owners Jesse, 31, and Christine Testa, 27, listed the home the day after Thanksgiving. By the following Tuesday, they had a buyer. Sales documents were being prepared, and earnest money had changed hands.
Jesse Testa credits the quick sale to improvements like the hardwood floors he put in on the second floor. But he also credits the couple's real estate agent, Horace Smith of HMS Realty, who had been preaching that the days of selling a home in a single day were gone, replaced by a slumping market where properties must be be priced realistically.
That advice means an owner today often has to settle for less.
"Price is very important," said Smith, who has been selling real estate since 1970. "If you can get people to do the right thing (price-wise), then they have an excellent chance of selling. If not, it's just going to sit there."
Built in 2002, the Testas' home was a narrow, two-story row house near Gary and State streets. Its attractions include wood floors in the kitchen and dining area, crown molding throughout, 9-foot ceilings and stairs carpeted down the middle with white painted wood on either side.
It was also just 15 minutes away from Boise State University, where Jesse Testa is taking business courses in hopes of moving into management at Motive Power, a Boise-based manufacturer of locomotive engines where he works as a welder. His wife is a nurse at St. Luke's Regional Medical Center in Downtown Boise. They bought the home during the housing boom for just over $150,000.
When it came time to sell, they priced their house at $214,000, which was $8,000 below its assessed value. The home immediately caught the attention of a family of four that had been living in a rental home. "I knew they had bought the house the first time they saw it," Testa said. The Testas got their asking price.
He said some residents have not accepted the realities of the current Treasure Valley single-family home market.
"We just wanted to sell our home. There was no reason to be super-greedy," Testa said,
The couple now live in a $275,000, three-bedroom, 1,800-square-foot home in Eagle, where Jesse Testa has more garage space for his collection of motorcycles.
It hasn't been nearly as easy for Doug and Becky Langford, who have had their home at 95 W. Rockford St. in the Meridian Heights subdivision on the market for almost a year. The subdivision sits just off Meridian Road near Victory Road.
Doug Langford, a financial adviser with Beneficial Financial Group, admits their first mistake was wasting the first six months trying to sell their 1,762-square-foot, ranch-style home themselves.
The couple, who have since moved to Ogden, Utah, are still making mortgage payments on the property. It has not received a single offer, despite the Langfords' decision to slash the original $220,000 price to $209,000, he said.
"And there's a good chance that we're going to cut the price again," Langford said.
Meanwhile, the couple, who are expecting their first child, are renting a basement apartment while they wait for their home to sell.
But at $209,000, the house is still priced well above its assessed value of $185,000, according to the Ada County assessor's office.
Phil Hoover, an associate broker with Re/Max West who has been in the business for 35 years - including the last seven in the Treasure Valley - insists there is rarely any correlation between the seller's asking price and the 2007 assessed value. He is not the Langfords' real estate agent.
Don McFarland, another broker with Re/Max West, says a home priced below its assessed value "is going to get my attention," but argues there are many reasons why a home may be priced lower than its assessment, including poor condition, a poor location, difficulty showing a rental house because a tenant is not cooperating, or pet damage.
Ada County Assessor Bob McQuade isn't so sure. "We may have under-valued the home by $10,000," he said. "But if it's been sitting there that long, chances are we valued it right."
Langford said his real estate agent has been after the couple to drop their price to $205,000.
"He said that if we'd drop it to $200,000 it would probably sell tomorrow," Langford said.
Shaun Tracy, an associate broker with Re/Max Capital City who tracks the local market, said there could be a litany of reasons why the Langfords' home has failed to sell.
Originally, the subdivision faced a junkyard, which "got it off on the wrong foot," he said. And part of the subdivision backs up to Kuna/Meridian Road, while another part sits adjacent to a mobile home park.
At 1,762 square feet, the Langfords' home is one of the larger ones in the subdivision. That may hurt its sale prospects, too.
"People like to buy homes next to the larger homes because it makes their values go up," Tracy said. "You always want to be the small fish in the big pond."
Finally, Tracy said, the highest price for a home in Meridian Heights in 2007 was $219,000, the lowest $149,900.
"He (Langford) needs to be at about $199,900," Tracy said.
But Langford said selling the house will not end his problems.
He said the couple owe $225,000 on the home. They purchased it using an 80/20 financing plan that amounts to two mortgages, one for 80 percent of the home's value, one for 20 percent.
It is a financial mechanism designed for buyers who don't want to pay mortgage insurance or have much of a down payment. But if a buyer defaults, he is on the hook for two mortgages, not one.
So, if the Langfords sell for $200,000, they will still need to take out a $25,000 loan to pay off the second mortgage.
"That's why I listed it at the price I did," Langford said. "I didn't want to take out a $25,000 loan, and get nothing for it."
Area real estate agents say commercial vacancies not dire
BY COLLEEN LAMAY - clamay@idahostatesman.com
Edition Date: 01/20/08
Commercial development remains a bright spot in the Treasure Valley economy, especially when you compare it to ghost neighborhoods of unsold homes dotting the Valley.
To be sure, high-profile vacancies suggest the possibility of an overbuilt market. The new Gateway Center shopping center in Nampa is mostly empty, with only a J.C. Penney anchor store open. And the pace of new construction and commercial rentals is beginning to slow - at least in Boise - from the go-go pace of the past few years.
But commercial real estate agents aren't worried. 2008 promises more new stores, offices and industrial space, they said.
"Anybody in my business will tell you that Canyon County is the hot spot, and we believe that 2008 will be more of the same," said Jerry Gunstream of Gunstream Commercial Real Estate in Nampa.
George Iliff of Colliers International in Boise, which sells, leases and manages commercial properties, sees a slowdown, but not enough to worry about.
"I think tenant interest is a little slower than it's been in the past, but still is not at a standstill," he said. "Everybody is talking about how horrible it is, and it's not. People are going about their business somewhat as usual."
BOISE: SLOWING TO A NORMAL PACE
In Boise, developers' applications for new buildings appear to be dropping, said Jenifer Gilliland, building division manager for the city. But the market for the past few years had been red-hot, Gilliland said.
"It's certainly slower than it was last year, but as far as it relates to our department, it is slowing down to a more normal level of construction," she said.
"We'll know a lot more in March or April, because that is when a natural slowdown always occurs," she said. "If we start really tanking in March or April, then we start to get concerned."
The mall along busy Milwaukee Street where the consumer-electronics store CompUSA is closing has some empty storefronts, as do older strip malls at Cole and Ustick roads and the Hillcrest Shopping Center on Overland Road. But retailers are mall rats these days. Borders bookstore recently moved from its spot near CompUSA into Boise Towne Square mall.
"There is a lot of growth and continued interest in the mall in terms of expansion and so forth, so I think CompUSA is maybe a casualty of retailing strategy (rather) than an indication that retail is in trouble," Iliff said.
Office space also is doing all right, he said. Emerald Street near the mall once had quite a few buildings standing empty, with a vacancy rate of 12 to 13 percent. Now, it is 7 percent to 8 percent higher than Downtown Boise, but lower than vacancy rates further west, he said.
Big projects planned in Boise include a for-profit hospital along Fairview Avenue and a WinCo grocery distribution center off Interstate 84 near Micron's main plant.
"We are hoping those will (help) keep our boat afloat," Gilliland said.
MERIDIAN AND EAGLE: OFFICES VACANT
Meridian's office vacancy rate is in the double digits - 13 percent - a result of rapid building as the population has grown.
Gauging vacancy rates in Eagle is misleading because the market is so small, Iliff said. One or two empty buildings will drive the numbers up. Right now, it is probably about 20 percent because of a few large empty buildings.
"It's still not in bad shape," Iliff said.
A key factor on the east side of the Valley is that not much new commercial space is being built right now. That's good because it gives the market time to get in sync with tenants' needs to lease, he said.
For home sales, that will take more time because the Valley ended up with many more homes than buyers.
NAMPA RETAIL GROWTH GOING GREAT GUNS
In Nampa, Jerry Gunstream said his company does about 75 to 80 percent of the commercial work, "so we have a good pulse on the market."
Retail growth in Nampa has been huge in the past year, he said. The city grew without national developers realizing it existed. But "in the past two to three years, it suddenly has been discovered," he said.
Perhaps the biggest commercial growth in the entire Valley in 2007 was the 750,000-square-foot Treasure Valley Marketplace, along I-84 at the Karcher Road interchange in Nampa. It has a Costco, Target, Old Navy, Olive Garden and other stores and restaurants. More are coming, including a T.G.I. Friday's, probably within a few weeks.
"Almost everything in that project that's been built has been occupied," Gunstream said.
Karcher Mall, which never recovered after Boise Towne Square opened, is another story. But things are looking up, Gunstream said. A year ago, the vacancy rate was 40 percent, and now it is 20 percent, he said.
The Nampa Gateway Center, on the south side of the Interstate near the Idaho Center, probably is the most stressed of the retail developments in the Nampa area, Gunstream said.
The developer -DDR, or Developers Diversified Realty Corp., based in Ohio - has built 170,000 square feet of retail space that is vacant.
"It is the largest amount of vacant space anywhere within the county," he said.
"It is the one area that seems to be suffering the most, but the developer is a national developer, and they typically know what they are doing," Gunstream said.
The same developers are behind the successful Meridian Crossroads development at the corner of Eagle Road and Fairview Avenue. Company representatives could not be reached Thursday or Friday.
Edition Date: 01/20/08
Commercial development remains a bright spot in the Treasure Valley economy, especially when you compare it to ghost neighborhoods of unsold homes dotting the Valley.
To be sure, high-profile vacancies suggest the possibility of an overbuilt market. The new Gateway Center shopping center in Nampa is mostly empty, with only a J.C. Penney anchor store open. And the pace of new construction and commercial rentals is beginning to slow - at least in Boise - from the go-go pace of the past few years.
But commercial real estate agents aren't worried. 2008 promises more new stores, offices and industrial space, they said.
"Anybody in my business will tell you that Canyon County is the hot spot, and we believe that 2008 will be more of the same," said Jerry Gunstream of Gunstream Commercial Real Estate in Nampa.
George Iliff of Colliers International in Boise, which sells, leases and manages commercial properties, sees a slowdown, but not enough to worry about.
"I think tenant interest is a little slower than it's been in the past, but still is not at a standstill," he said. "Everybody is talking about how horrible it is, and it's not. People are going about their business somewhat as usual."
BOISE: SLOWING TO A NORMAL PACE
In Boise, developers' applications for new buildings appear to be dropping, said Jenifer Gilliland, building division manager for the city. But the market for the past few years had been red-hot, Gilliland said.
"It's certainly slower than it was last year, but as far as it relates to our department, it is slowing down to a more normal level of construction," she said.
"We'll know a lot more in March or April, because that is when a natural slowdown always occurs," she said. "If we start really tanking in March or April, then we start to get concerned."
The mall along busy Milwaukee Street where the consumer-electronics store CompUSA is closing has some empty storefronts, as do older strip malls at Cole and Ustick roads and the Hillcrest Shopping Center on Overland Road. But retailers are mall rats these days. Borders bookstore recently moved from its spot near CompUSA into Boise Towne Square mall.
"There is a lot of growth and continued interest in the mall in terms of expansion and so forth, so I think CompUSA is maybe a casualty of retailing strategy (rather) than an indication that retail is in trouble," Iliff said.
Office space also is doing all right, he said. Emerald Street near the mall once had quite a few buildings standing empty, with a vacancy rate of 12 to 13 percent. Now, it is 7 percent to 8 percent higher than Downtown Boise, but lower than vacancy rates further west, he said.
Big projects planned in Boise include a for-profit hospital along Fairview Avenue and a WinCo grocery distribution center off Interstate 84 near Micron's main plant.
"We are hoping those will (help) keep our boat afloat," Gilliland said.
MERIDIAN AND EAGLE: OFFICES VACANT
Meridian's office vacancy rate is in the double digits - 13 percent - a result of rapid building as the population has grown.
Gauging vacancy rates in Eagle is misleading because the market is so small, Iliff said. One or two empty buildings will drive the numbers up. Right now, it is probably about 20 percent because of a few large empty buildings.
"It's still not in bad shape," Iliff said.
A key factor on the east side of the Valley is that not much new commercial space is being built right now. That's good because it gives the market time to get in sync with tenants' needs to lease, he said.
For home sales, that will take more time because the Valley ended up with many more homes than buyers.
NAMPA RETAIL GROWTH GOING GREAT GUNS
In Nampa, Jerry Gunstream said his company does about 75 to 80 percent of the commercial work, "so we have a good pulse on the market."
Retail growth in Nampa has been huge in the past year, he said. The city grew without national developers realizing it existed. But "in the past two to three years, it suddenly has been discovered," he said.
Perhaps the biggest commercial growth in the entire Valley in 2007 was the 750,000-square-foot Treasure Valley Marketplace, along I-84 at the Karcher Road interchange in Nampa. It has a Costco, Target, Old Navy, Olive Garden and other stores and restaurants. More are coming, including a T.G.I. Friday's, probably within a few weeks.
"Almost everything in that project that's been built has been occupied," Gunstream said.
Karcher Mall, which never recovered after Boise Towne Square opened, is another story. But things are looking up, Gunstream said. A year ago, the vacancy rate was 40 percent, and now it is 20 percent, he said.
The Nampa Gateway Center, on the south side of the Interstate near the Idaho Center, probably is the most stressed of the retail developments in the Nampa area, Gunstream said.
The developer -DDR, or Developers Diversified Realty Corp., based in Ohio - has built 170,000 square feet of retail space that is vacant.
"It is the largest amount of vacant space anywhere within the county," he said.
"It is the one area that seems to be suffering the most, but the developer is a national developer, and they typically know what they are doing," Gunstream said.
The same developers are behind the successful Meridian Crossroads development at the corner of Eagle Road and Fairview Avenue. Company representatives could not be reached Thursday or Friday.
Wednesday, January 23, 2008
Idaho foreclosures have more than doubled over last year
Idaho's housing foreclosure numbers have already more than doubled the total for all of last year, with December's figures yet to be tallied, according to a report released Wednesday.
RealtyTrac, an Irvine-California-based Web site that monitors foreclosures nationwide, reported that there had been 5,338 filings in Idaho at the end of November, or 113 percent more than the 2,508 foreclosures recorded for all of 2006. Year-over-year the percentage increase is 187 percent, said RealtyTrac spokesman Daren Bloomquist.
November's 667 filings were 11 percent above the previous month. Ada and Canyon counties accounted for 393 filings or 59 percent.
Industry reaction to the news was mixed. One expert argued that the growing number of foreclosures would drive down housing prices enough to allow more people to purchase homes, while another countered that people losing their homes won't be in the market to buy another one right away.
Shaun Tracy, an associate broker with Re/Max Capital City., said that the spike in foreclosures might be just the medicine needed to cure the state's ailing single-family residential housing market.
Tracy believes that as desperate homeowners slash their asking price housing affordability will return to the Treasure Valley, where the housing boom of 2005 and 2006 priced many area residents out of the market.
According to the Intermountain Multiple Listing Service, the median price of an Ada County home has risen 43 percent since 2004, or from $169,900 to $232,900 at the end of 2006. Canyon County's median prices went from $107,0000 to $161,900, or an increase of 51 percent for the same two-year period.
"It (the rise in foreclosures) might help re-establish where the market needs to be in order to stimulate sales," Tracy said.
The 667 Idaho foreclosure numbers for November represented one filing for each 893 homes in Idaho. That was still better, however, than the 201,950 U.S. foreclosures last month that amounted to one filing for every 617 homes in the country.
Marc Lebowitz, chief executive of the Ada County Association of Realtors, wasn't convinced that higher foreclosure numbers would translate into higher housing sales.
"Usually, when a person sells a house they buy another one," he said. "But some of these people are going to be forced into the rental market, at least for a while."
Most industry watchers blame sub-prime mortgages made by lenders to consumers with shaky credit histories as the primary reason U.S. foreclosures are on a record pace. The loans initially offer a low "teaser rate." That rate jumps dramatically, however, when the interest on the loan resets, often leaving the homeowner unable to keep up with the new monthly payment.
Meridian-based homebuilder Don Hubble, of Hubble Homes, said there could be more trouble for the housing market if banks begin repossessing homes then sell them at bargain-basement prices, which would drive down housing values throughout the Valley.
Meanwhile, industry sales numbers reveal that the huge inventory of homes hanging over the Treasure Valley housing market and depressing sales continue to decline.
IMLS figures show that the inventory of homes in Ada County has fallen for the fourth straight month -from 5,192 in August to 4,587 in November - a decline of 12 percent.
Canyon County saw a 10 percent drop in its housing inventory for the same period, from 2,697 in August to 2,437 last month.
RealtyTrac, an Irvine-California-based Web site that monitors foreclosures nationwide, reported that there had been 5,338 filings in Idaho at the end of November, or 113 percent more than the 2,508 foreclosures recorded for all of 2006. Year-over-year the percentage increase is 187 percent, said RealtyTrac spokesman Daren Bloomquist.
November's 667 filings were 11 percent above the previous month. Ada and Canyon counties accounted for 393 filings or 59 percent.
Industry reaction to the news was mixed. One expert argued that the growing number of foreclosures would drive down housing prices enough to allow more people to purchase homes, while another countered that people losing their homes won't be in the market to buy another one right away.
Shaun Tracy, an associate broker with Re/Max Capital City., said that the spike in foreclosures might be just the medicine needed to cure the state's ailing single-family residential housing market.
Tracy believes that as desperate homeowners slash their asking price housing affordability will return to the Treasure Valley, where the housing boom of 2005 and 2006 priced many area residents out of the market.
According to the Intermountain Multiple Listing Service, the median price of an Ada County home has risen 43 percent since 2004, or from $169,900 to $232,900 at the end of 2006. Canyon County's median prices went from $107,0000 to $161,900, or an increase of 51 percent for the same two-year period.
"It (the rise in foreclosures) might help re-establish where the market needs to be in order to stimulate sales," Tracy said.
The 667 Idaho foreclosure numbers for November represented one filing for each 893 homes in Idaho. That was still better, however, than the 201,950 U.S. foreclosures last month that amounted to one filing for every 617 homes in the country.
Marc Lebowitz, chief executive of the Ada County Association of Realtors, wasn't convinced that higher foreclosure numbers would translate into higher housing sales.
"Usually, when a person sells a house they buy another one," he said. "But some of these people are going to be forced into the rental market, at least for a while."
Most industry watchers blame sub-prime mortgages made by lenders to consumers with shaky credit histories as the primary reason U.S. foreclosures are on a record pace. The loans initially offer a low "teaser rate." That rate jumps dramatically, however, when the interest on the loan resets, often leaving the homeowner unable to keep up with the new monthly payment.
Meridian-based homebuilder Don Hubble, of Hubble Homes, said there could be more trouble for the housing market if banks begin repossessing homes then sell them at bargain-basement prices, which would drive down housing values throughout the Valley.
Meanwhile, industry sales numbers reveal that the huge inventory of homes hanging over the Treasure Valley housing market and depressing sales continue to decline.
IMLS figures show that the inventory of homes in Ada County has fallen for the fourth straight month -from 5,192 in August to 4,587 in November - a decline of 12 percent.
Canyon County saw a 10 percent drop in its housing inventory for the same period, from 2,697 in August to 2,437 last month.
Foreclosure Auctions - Boise, Idaho
Fellow Investors:
As you can see from the previous article that foreclosures are on the rise across the country as well as in Southwest Idaho. This situation presents an incredible buying opportunity over the next 12 to 18 months. More and more properties will come up for auction. The Treasure Valley (Boise, Meridian, etc.) remains a great place to live, work and play. We are still enjoying a solid influx of people moving to our area just for those reasons. The economy is healthy and the rental market is strong as we move through the winter and into the spring.
For your benefit, I am starting a weekly email outlining properties that are coming up for auction in the following week. Bidding at the foreclosure auction is tricky but can be very rewarding. If you are interested in receiving this weekly email, please email me a request at Michael.Hon@IronEagleRE.com. I look forward to building your wealth.
Regards
Michael Hon
Owner/Broker
Iron Eagle Realty
As you can see from the previous article that foreclosures are on the rise across the country as well as in Southwest Idaho. This situation presents an incredible buying opportunity over the next 12 to 18 months. More and more properties will come up for auction. The Treasure Valley (Boise, Meridian, etc.) remains a great place to live, work and play. We are still enjoying a solid influx of people moving to our area just for those reasons. The economy is healthy and the rental market is strong as we move through the winter and into the spring.
For your benefit, I am starting a weekly email outlining properties that are coming up for auction in the following week. Bidding at the foreclosure auction is tricky but can be very rewarding. If you are interested in receiving this weekly email, please email me a request at Michael.Hon@IronEagleRE.com. I look forward to building your wealth.
Regards
Michael Hon
Owner/Broker
Iron Eagle Realty
Sunday, December 09, 2007
Pre-Foreclosure Short Sale - Meridian, Idaho
Here is a pre-foreclosure short sale single family investment opportunity in Meridian, Idaho, one of the fastest growing cities in the state of Idaho. This property is listed at an 18% discount from recent sales within the last 6 months on a $/SF basis. The bank does not want this property back so call me to make an offer!
Solid Single Family Investment in Population Core
Centrally located in Meridian, ID
Completely updated home in a great location. This home sits on almost 1/4 acre and has RV parking plus a big wrap around covered deck. The kitchen has a new smooth top stove, new Pergo floor, and a new built-in microwave. Open floor plan with vaulted ceilings and a plant shelves. This home has a formal dining room or separate family and living rooms. The master suite has Jacuzzi tub with separate shower and his/hers closets. BTVAI.
Asking $149,900
Built in 1995
1414 SF
Almost 0.25 acres
Approx. rents of $900 - $925 (higher in spring and summer)
NO HOA DUES!
Renter pays all utilties
Taxes $1744
Insurance $300
Again, thank you in advance for considering this property for your real estate investment portfolio. For this and other foreclosure properties, please don't hesitate to call me at 208 919 0458 or email me at Michael.Hon@IronEagleRE.com.
Regards
Michael Hon
Broker - MBA, GRI
Iron Eagle Realty
Solid Single Family Investment in Population Core
Centrally located in Meridian, ID
Completely updated home in a great location. This home sits on almost 1/4 acre and has RV parking plus a big wrap around covered deck. The kitchen has a new smooth top stove, new Pergo floor, and a new built-in microwave. Open floor plan with vaulted ceilings and a plant shelves. This home has a formal dining room or separate family and living rooms. The master suite has Jacuzzi tub with separate shower and his/hers closets. BTVAI.
Asking $149,900
Built in 1995
1414 SF
Almost 0.25 acres
Approx. rents of $900 - $925 (higher in spring and summer)
NO HOA DUES!
Renter pays all utilties
Taxes $1744
Insurance $300
Again, thank you in advance for considering this property for your real estate investment portfolio. For this and other foreclosure properties, please don't hesitate to call me at 208 919 0458 or email me at Michael.Hon@IronEagleRE.com.
Regards
Michael Hon
Broker - MBA, GRI
Iron Eagle Realty
Fed Seems Poised to Lower Interest Rates
By THE ASSOCIATED PRESS
Published: December 9, 2007
Filed at 11:12 a.m. ET
WASHINGTON (AP) -- What a difference in economic conditions since the Federal Reserve last met in October.
Credit has become harder to obtain, Wall Street has convulsed again and the housing slump has intensified. And policymakers at the central bank now appear to have changed their minds about the need to drop interest rates again.
Twice the Fed had cut rates this year and officials suggested in October that might be enough for the year to help the economy survive all that stress. Then the problems snowballed, leading Fed Chairman Ben Bernanke to sign that one more cut might be needed.
Analysts expect the Fed to trim its key rate, now at 4.5 percent, by one-quarter of a percentage point at the meeting Tuesday. Some even speculate about the possibility of a half-point cut.
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.
All this has added to the turmoil on Wall Street, and Bernanke and other Fed officials say they must take it into account when deciding their next move.
But does lowering rates mean the Fed essentially is bailing out investors or encouraging more sloppy decision-making? In other words, what exactly is the Fed's job?
Bernanke and other Fed officials say it is to make policy that keeps the economy growing and inflation low, a stable climate that benefits individuals, businesses and investors. The Fed also has a responsibility to ensure the banking system is sound and financial markets run smoothly.
''There is a link between Wall Street and Main Street. The Fed is taking the right actions, but they should be careful,'' said Victor Li, an economics professor at the Villanova School of Business.
The fear among economists is that the negative forces rattling investors could spread, forcing consumers and businesses to restrain spending and investment. While the odds of a recession have grown, Fed officials, the Bush administration and most economists are hopeful the country can tackle the problems and avoid that fate.
''The Federal Reserve is following the evolution of financial conditions carefully, with particular attention to the question of how strains in financial markets might affect the broader economy,'' Bernanke said in a recent speech where he opened the door to a further rate cut.
Bernanke has said the Fed's job is not to bail out investors who made bad decisions, but to do what is best for the economy. The central bank, however, cannot operate in a vacuum, he has said.
William Poole, president of the Federal Reserve Bank of St. Louis, puts it more bluntly.
''The Fed does not have the desire or tools to prevent widespread losses in a particular sector, but should not sit by while a financial upset becomes a financial calamity affecting the entire economy,'' Poole said recently. ''It makes no sense to let the economy suffer from continuing declines in stock prices for the purpose of `teaching stock market speculators a lesson,''' he added.
Janet Yellen, president of the Federal Reserve Bank of San Francisco, said ''we face a risk that the problems in the housing market could spill over'' and sap consumer spending ''in a bigger way'' than anticipated.
A scholar of the Great Depression, Bernanke has written extensively on the country's worst economic catastrophe. Flawed monetary policy in the United States and abroad was a major factor, he believes.
Bernanke's ''about-face on a December rate cut is motivated by the fear of collateral damage from the train wreck affecting everything that touches subprime mortgages,'' said Stuart Hoffman, chief economist at PNC Financial Services Group.
The situation poses the biggest challenge yet to Bernanke, who took over the Fed in February 2006. Some analysts have questioned whether he waited too long to cut the Fed's key rate and whether he has acted aggressively enough to the nation's economic woes.
In mid-August, the Fed lowered its lending rate to banks. In September, the central bank it dropped its key rate, the federal funds rate, for the first time in four years. Then it was a half-point drop; on Oct. 31 came a quarter-point cut.
The funds rate is the interest that banks charge each other on overnight loans. This rate influences many other interest rates charged to consumers and businesses. It is the Fed's most potent tool for influencing national economic activity.
If the Fed cuts the funds rate again, commercial banks would lower their prime lending rate -- now at 7.5 percent -- by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans.
The rationale behind the lower rates is that they will induce consumers and businesses boost spending, energizing economic activity.
From July through September, the economy logged its best growth in four years. But it is expected to slow to a pace of just 1.5 percent or less over the final three months of the year. Even so, important shock absorbers for the economy -- job creation and wage growth -- are holding up. The unemployment rate in November held steady at a relatively low 4.7 percent for the third straight month.
Oil prices, which had neared $100 a barrel, have moderated. But they are still high. High energy prices are a double-edged sword. They can slow economic activity and spread inflation if they cause the prices of lots of other goods and services to rise.
Bernanke's predecessor at the Fed, Alan Greenspan, has been criticized for holding interest rates too low for too long following the 2001 recession. Those low rates have been blamed for feeding a five-year housing boom. That boom eventually turned to bust as interest rates moved higher to combat inflation. Harder-to-get credit has thwarted would-be home buyers, intensifying the housing collapse. Foreclosures have soared to record highs. The number of unsold homes have piled up. Problems are expected to persist well into next year.
Published: December 9, 2007
Filed at 11:12 a.m. ET
WASHINGTON (AP) -- What a difference in economic conditions since the Federal Reserve last met in October.
Credit has become harder to obtain, Wall Street has convulsed again and the housing slump has intensified. And policymakers at the central bank now appear to have changed their minds about the need to drop interest rates again.
Twice the Fed had cut rates this year and officials suggested in October that might be enough for the year to help the economy survive all that stress. Then the problems snowballed, leading Fed Chairman Ben Bernanke to sign that one more cut might be needed.
Analysts expect the Fed to trim its key rate, now at 4.5 percent, by one-quarter of a percentage point at the meeting Tuesday. Some even speculate about the possibility of a half-point cut.
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.
All this has added to the turmoil on Wall Street, and Bernanke and other Fed officials say they must take it into account when deciding their next move.
But does lowering rates mean the Fed essentially is bailing out investors or encouraging more sloppy decision-making? In other words, what exactly is the Fed's job?
Bernanke and other Fed officials say it is to make policy that keeps the economy growing and inflation low, a stable climate that benefits individuals, businesses and investors. The Fed also has a responsibility to ensure the banking system is sound and financial markets run smoothly.
''There is a link between Wall Street and Main Street. The Fed is taking the right actions, but they should be careful,'' said Victor Li, an economics professor at the Villanova School of Business.
The fear among economists is that the negative forces rattling investors could spread, forcing consumers and businesses to restrain spending and investment. While the odds of a recession have grown, Fed officials, the Bush administration and most economists are hopeful the country can tackle the problems and avoid that fate.
''The Federal Reserve is following the evolution of financial conditions carefully, with particular attention to the question of how strains in financial markets might affect the broader economy,'' Bernanke said in a recent speech where he opened the door to a further rate cut.
Bernanke has said the Fed's job is not to bail out investors who made bad decisions, but to do what is best for the economy. The central bank, however, cannot operate in a vacuum, he has said.
William Poole, president of the Federal Reserve Bank of St. Louis, puts it more bluntly.
''The Fed does not have the desire or tools to prevent widespread losses in a particular sector, but should not sit by while a financial upset becomes a financial calamity affecting the entire economy,'' Poole said recently. ''It makes no sense to let the economy suffer from continuing declines in stock prices for the purpose of `teaching stock market speculators a lesson,''' he added.
Janet Yellen, president of the Federal Reserve Bank of San Francisco, said ''we face a risk that the problems in the housing market could spill over'' and sap consumer spending ''in a bigger way'' than anticipated.
A scholar of the Great Depression, Bernanke has written extensively on the country's worst economic catastrophe. Flawed monetary policy in the United States and abroad was a major factor, he believes.
Bernanke's ''about-face on a December rate cut is motivated by the fear of collateral damage from the train wreck affecting everything that touches subprime mortgages,'' said Stuart Hoffman, chief economist at PNC Financial Services Group.
The situation poses the biggest challenge yet to Bernanke, who took over the Fed in February 2006. Some analysts have questioned whether he waited too long to cut the Fed's key rate and whether he has acted aggressively enough to the nation's economic woes.
In mid-August, the Fed lowered its lending rate to banks. In September, the central bank it dropped its key rate, the federal funds rate, for the first time in four years. Then it was a half-point drop; on Oct. 31 came a quarter-point cut.
The funds rate is the interest that banks charge each other on overnight loans. This rate influences many other interest rates charged to consumers and businesses. It is the Fed's most potent tool for influencing national economic activity.
If the Fed cuts the funds rate again, commercial banks would lower their prime lending rate -- now at 7.5 percent -- by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans.
The rationale behind the lower rates is that they will induce consumers and businesses boost spending, energizing economic activity.
From July through September, the economy logged its best growth in four years. But it is expected to slow to a pace of just 1.5 percent or less over the final three months of the year. Even so, important shock absorbers for the economy -- job creation and wage growth -- are holding up. The unemployment rate in November held steady at a relatively low 4.7 percent for the third straight month.
Oil prices, which had neared $100 a barrel, have moderated. But they are still high. High energy prices are a double-edged sword. They can slow economic activity and spread inflation if they cause the prices of lots of other goods and services to rise.
Bernanke's predecessor at the Fed, Alan Greenspan, has been criticized for holding interest rates too low for too long following the 2001 recession. Those low rates have been blamed for feeding a five-year housing boom. That boom eventually turned to bust as interest rates moved higher to combat inflation. Harder-to-get credit has thwarted would-be home buyers, intensifying the housing collapse. Foreclosures have soared to record highs. The number of unsold homes have piled up. Problems are expected to persist well into next year.
Saturday, December 08, 2007
Looking for a house between $105,000 and $150,000 in Boise?
Realtors say there are at least 83 homes in Boise and Meridian within that price range
Joe Jaszewski / jjaszewski@idahostatesman.com
By Joe Estrella - jestrella@idahostatesman.com
Edition Date: 12/05/07
Believe it or not, there is still affordable housing to be had in Ada County.
Bob Smith, a Realtor with in Boise, says there were 83 homes for sale Tuesday in Boise and Meridian with price tags below $150,000.
"Right now, there are homes where a person's mortgage payment would be less than what they're spending now on rent," Smith said. "These homes are great for people with one or two children.
The bargain prices are in contrast to Ada County median home prices that have continued climbing despite the nationwide slump in the residential housing market.
According to the Intermountain Multiple Listing Service, which tracks real estate transaction throughout the Treasure Valley, the median price for a home in Ada County last month was $231,893.
Most of the properties priced below $150,000 are in foreclosure, or have had their prices slashed by owners who have seen their properties languish on the market because of the market downturn, Cavigllano said.
A "shocking number" of the homes are vacant, which gives the buyer leverage because the owner has moved and is eager to sell to avoid having to pay mortgages, she said.
Some of the homes are fixer-uppers. But other are already in livable condition.
"These homes are just sitting there," she said.
The cheapest home on the list is $105,000, the most expensive $150,000. Most fall somewhere in between, including:
An 1,120-square-foot, three-bedroom, two-bath home for $149,900 on Millstone Drive.
A five-bedroom, 1-1/2-half bath, 1,482-square-foot home on West Landmark Street originally priced at $189,900. After 136 days on the market, the owner will now take $147,900.
A two-bedroom home on the Boise Bench with a price that was cut from $149,000 to $143,900 after just 19 days on the market.
"And we're just talking Boise," Cavigllano said. "We haven't even mentioned Meridian, where most of the houses are nicer than the homes in Boise."
Adding to the impetus to get into a home was news Tuesday that interest rates had fallen below 6 percent for a 30-year fixed rate mortgage.
"I don't remember when was the last time rates were that low," said Bob Smith, an associate broker with Re/Max Capital City.
Meanwhile, with homeowners slashing their asking prices, the investors that originally fueled the Treasure Valley housing boom may be starting to come out again. That could give home sales a badly needed lift.
One potential buyers is Jim Coulter, 34, owner of Clean Solution Painting.
Coulter and another investor had been looking at a five-bedroom, 2-1/2-bath house near Fairview Avenue and Maple Grove Road. The price had already sunk from $169,000 to $149,000. Their strategy: make a lowball offer of between $120,000 and $125,000 and hope the owner took the bait. They would then put about $20,000 in upgrades into the home - Coulter would handle most of the work - and put the home on the market next spring.
The deal fell through when the other investor bailed on the deal.
Coulter said he is still looking at low-priced properties that he might be able to acquire by himself.
Cavigllano said that for the first time in a long while, some new homes are being built and sold for less than $150,000.
At the Charter Pointe subdivision near Lake Hazel and Five Mile Road, Hubble Home plans to build three homes priced at $149,990.
"They haven't been built yet, so you can go out there and start picking out your colors," Cavigllano said.
Canyon County offers a much larger choice of low-cost homes. Tracy said 582 Canyon County homes are priced at or below $150,000.
A recent single Hubble Homes listing in Caldwell of a home priced at $109,990 produced 2,000 hits on the Intermountain Multiple Listing Service Web site.
Wayne Forrey, director of Eagle-based Kastera Development, recently told the Boise Metro Chamber of Commerce's Economic Outlook Forum that the local the local housing market has bottomed out, and predicted that recovery would begin in 2008. Falling land, construction and housing costs will help bring buyers back, he said.
Joe Jaszewski / jjaszewski@idahostatesman.com
By Joe Estrella - jestrella@idahostatesman.com
Edition Date: 12/05/07
Believe it or not, there is still affordable housing to be had in Ada County.
Bob Smith, a Realtor with in Boise, says there were 83 homes for sale Tuesday in Boise and Meridian with price tags below $150,000.
"Right now, there are homes where a person's mortgage payment would be less than what they're spending now on rent," Smith said. "These homes are great for people with one or two children.
The bargain prices are in contrast to Ada County median home prices that have continued climbing despite the nationwide slump in the residential housing market.
According to the Intermountain Multiple Listing Service, which tracks real estate transaction throughout the Treasure Valley, the median price for a home in Ada County last month was $231,893.
Most of the properties priced below $150,000 are in foreclosure, or have had their prices slashed by owners who have seen their properties languish on the market because of the market downturn, Cavigllano said.
A "shocking number" of the homes are vacant, which gives the buyer leverage because the owner has moved and is eager to sell to avoid having to pay mortgages, she said.
Some of the homes are fixer-uppers. But other are already in livable condition.
"These homes are just sitting there," she said.
The cheapest home on the list is $105,000, the most expensive $150,000. Most fall somewhere in between, including:
An 1,120-square-foot, three-bedroom, two-bath home for $149,900 on Millstone Drive.
A five-bedroom, 1-1/2-half bath, 1,482-square-foot home on West Landmark Street originally priced at $189,900. After 136 days on the market, the owner will now take $147,900.
A two-bedroom home on the Boise Bench with a price that was cut from $149,000 to $143,900 after just 19 days on the market.
"And we're just talking Boise," Cavigllano said. "We haven't even mentioned Meridian, where most of the houses are nicer than the homes in Boise."
Adding to the impetus to get into a home was news Tuesday that interest rates had fallen below 6 percent for a 30-year fixed rate mortgage.
"I don't remember when was the last time rates were that low," said Bob Smith, an associate broker with Re/Max Capital City.
Meanwhile, with homeowners slashing their asking prices, the investors that originally fueled the Treasure Valley housing boom may be starting to come out again. That could give home sales a badly needed lift.
One potential buyers is Jim Coulter, 34, owner of Clean Solution Painting.
Coulter and another investor had been looking at a five-bedroom, 2-1/2-bath house near Fairview Avenue and Maple Grove Road. The price had already sunk from $169,000 to $149,000. Their strategy: make a lowball offer of between $120,000 and $125,000 and hope the owner took the bait. They would then put about $20,000 in upgrades into the home - Coulter would handle most of the work - and put the home on the market next spring.
The deal fell through when the other investor bailed on the deal.
Coulter said he is still looking at low-priced properties that he might be able to acquire by himself.
Cavigllano said that for the first time in a long while, some new homes are being built and sold for less than $150,000.
At the Charter Pointe subdivision near Lake Hazel and Five Mile Road, Hubble Home plans to build three homes priced at $149,990.
"They haven't been built yet, so you can go out there and start picking out your colors," Cavigllano said.
Canyon County offers a much larger choice of low-cost homes. Tracy said 582 Canyon County homes are priced at or below $150,000.
A recent single Hubble Homes listing in Caldwell of a home priced at $109,990 produced 2,000 hits on the Intermountain Multiple Listing Service Web site.
Wayne Forrey, director of Eagle-based Kastera Development, recently told the Boise Metro Chamber of Commerce's Economic Outlook Forum that the local the local housing market has bottomed out, and predicted that recovery would begin in 2008. Falling land, construction and housing costs will help bring buyers back, he said.
Thursday, December 06, 2007
30-year mortgage rates drop
By MARTIN CRUTSINGER - AP Economics Writer
Edition Date: 12/06/07
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Rates on 30-year mortgages fell sharply again this week, dropping to the lowest level in more than two years.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.96 percent. That was down from 6.10 percent last week and was the lowest rate since the week of Sept. 29, 2005, when they averaged 5.91 percent.
Analysts attributed the decline to worries about what a severe slump in housing and a lingering credit crunch could do to consumer confidence and the overall economy.
"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," said Frank Nothaft, chief economist at Freddie Mac.
Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, slid to 5.65 percent, from 5.73 percent last week.
For five-year adjustable-rate mortgages, rates fell to 5.75 percent, compared to 5.86 percent last week.
Rates on one-year adjustable-rate mortgages edged up slightly to 5.46 percent, compared to 5.43 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried a nationwide average fee of 0.4 point while 15-year and five-year mortgages both carried a 0.5 point fee. The one-year ARM carried an average fee of 0.6 point.
A year ago, 30-year mortgages stood at 6.11 percent. Rates on 15-year mortgages were at 5.84 a year ago while five-year ARMS averaged 5.92 percent and one-year ARMs were at 5.43 percent.
The housing market has been suffering through a severe slump following five years of record sales. The weakness is expected to persist well into next year.
The boom-to-bust situation has been especially hard on homeowners with spotty credit and lower incomes. Foreclosures have surged as many overstretched borrowers have been unable to make higher monthly payments once their low introductory "teaser" rates have reset to higher levels. The Bush administration this week put together a plan in negotiations with the mortgage industry to freeze the initial introductory rates for a period of five years for certain subprime borrowers.
Thursday, November 29, 2007
Idaho's October foreclosure rate is 157 percent higher than last year
Joe Estrella - jestrella@idahostatesman.com
Edition Date: 11/29/07
Idaho’s foreclosure rate in October was 157 percent higher than the same month a year ago, according to a report issued Thursday.
RealtyTrac, an on-line marketing site that monitors each state’s foreclosure rate, reported that 993 homes in Idaho were in some stage of foreclosure last month.
That was down 7 percent from the September numbers, but 157 percent ahead of October 2006.
It also out-paced a national average that was running 94 percent ahead of the same month a year ago.
However, Idaho is not the only state where an increasing number of people are losing their homes, said RealtyTrac Marketing Communications Manager Daren Blomquist.
“I think that people have heard enough about foreclosures that they know it has become an issue,” Blomquist said.
Nationwide, RealtyTrac said 224,451 homes were either in default, about to be auctioned off, or had been repossessed by the lender.
Edition Date: 11/29/07
Idaho’s foreclosure rate in October was 157 percent higher than the same month a year ago, according to a report issued Thursday.
RealtyTrac, an on-line marketing site that monitors each state’s foreclosure rate, reported that 993 homes in Idaho were in some stage of foreclosure last month.
That was down 7 percent from the September numbers, but 157 percent ahead of October 2006.
It also out-paced a national average that was running 94 percent ahead of the same month a year ago.
However, Idaho is not the only state where an increasing number of people are losing their homes, said RealtyTrac Marketing Communications Manager Daren Blomquist.
“I think that people have heard enough about foreclosures that they know it has become an issue,” Blomquist said.
Nationwide, RealtyTrac said 224,451 homes were either in default, about to be auctioned off, or had been repossessed by the lender.
Tuesday, November 20, 2007
Economic slump is not expected to last
By Ken Day - kdey@idahostatesman.com
Edition Date: 11/14/07
Edition Date: 11/14/07
Although the tech sector is struggling, the Boise area's economic outlook for 2008 is upbeat, with the worst of the local housing slump soon to be history, experts said Tuesday.
Speakers at the Boise Metro Chamber of Commerce's Economic Outlook Forum said high population growth and low unemployment will keep the Treasure Valley economy one of the nation's strongest next year.
Here are some key forecasts:
Housing: The national slowdown will last, but the Valley's won't
Portland-based economist Bill Conerly, principal of Conerly Consulting, said robust population growth will help reduce the Valley's excess housing faster than other areas.
"The national housing market is in very sad shape," he said. "We've overbuilt since 2002, when low mortgage rates allowed us to put first-time homebuyers in houses, and then home prices went up and investors moved in. But now home prices are too high for first-time homebuyers, and investors are moving out."
Conerly said he doesn't expect the national housing market to rebound in either 2008 or 2009. But by 2009 the country should see the turnaround coming, he said.
Wayne Forrey, director of Eagle-based Kastera Development, said the local market has reached the bottom, and he expects recovery to begin in 2008. Falling land, construction and housing costs will help bring buyers back, he said.
Forrey said Boise remains one of the most affordable places to buy a first home. "Anyone in this room today can buy a brand new three-bedroom, two-bath, two-car attached garage in Boise metro for under $110,000," he told the audience. After the meeting, he said some builders are now offering homes in places like Caldwell below $110,000.
Commercial real estate: Meridian is hot
Debbie Martin, a commercial real estate agent and principal of DK Commercial, said demand for retail and office property remains strong, although it's not at 2005 levels. Martin said the 2005 growth rate was unsustainable.
The strongest areas of growth are in Meridian and Nampa, with Eagle close behind, she said.
"When we see retail and office space all over the Valley unoccupied, it doesn't mean the sky is falling and there aren't tenants," she said. "It's mostly due to the growth and new construction, not necessarily due to a pull-back in activity."
Technology: Startups lack support
The next company to become a Hewlett-Packard or Micron is already in the Boise area, but business leaders and state leaders need to do more to help smaller technology companies grow, says Jason Crawforth, founder and chairman of Treetop Technologies.
"These are the children of our economy," Crawforth said. "We as a community - in my opinion - are doing a very poor job of helping these emerging companies."
Crawforth said one of the best things Idaho's larger companies can do to help emerging companies is to make sure they seek the services and products of the Idaho companies, because that gives the small companies references to help develop business.
"We're not asking for handouts. This is not welfare. We're good - we're actually damn good at what we do," Crawforth said. "Before you look across the planet for solutions, just look across the streets. We're here."
Crawforth said technology is the largest industry in the state but lacks the support of Idaho political leaders.
"Technology is bigger than agriculture, forestry and mining combined," he said, "but our public sector has taken for granted what this industry brings to our state. The last 15 years we've grown rapidly, but we've grown despite little help from our government."
In 2005, Crawforth said Idaho invested only about $550,000 in its tech industry while Utah invested $165 million.
Crawforth said the state needs to invest in technology to expand the companies that will have to pay the costs of infrastructure like roads, prisons and schools.
"The last time I checked, agriculture isn't going to pay the bills - it's going to be the science and tech industry," Crawforth said. "I'm asking the public officials in our state to stop looking over your shoulder. It's time to look ahead."
The national economy: No recession likely
Conerly gives the country only a one in four chance of going into a recession.
"The American economy is strong and resilient, the American people are strong and resilient, the American economy is strong and resilient," he said. "That's the one economy lesson you should
Monday, May 21, 2007
2007 will be more stable for the Valley housing market, experts predict
By Joe Estrella - Idaho Statesman
Edition Date: 05/20/07
The Treasure Valley residential real estate market has taken a wild ride the last two years, with sales soaring to record heights in 2005 and early 2006, then plunging back to earth in late 2006 and early 2007.
Almost overnight, the seller’s market of 2005 became the buyer’s market of late 2006, with thousands of new and existing homes languishing on the market so long that some sellers this year were forced to slash their asking prices.
But falling sales didn’t automatically mean falling prices. Homeowners often hang onto homes rather than cut sales prices. Housing prices remained remarkably strong during the downturn in late 2006, with the median price of a home in Ada County jumping to $249,900, or almost 16 percent ahead of 2005. In Canyon County the median price was $160,000 at the end of ‘06, an increase of 12 percent over the previous year.
It was March 2007 before housing values in Ada County showed a 1.3 percent drop from the same month a year ago. Canyon County fared a little better, with a 2 percent gain from March 2006.
Uncontrolled construction of single-family homes throughout 2005 finally caught up with the industry, a builder said.
Don Hubble, owner of Meridian-based Hubble Homes, said that in 2000 there were fewer than 2,000 listings on the Intermountain Multiple Listing Service, which tracks sales in the Valley. By late 2006 there were almost 6,000 homes waiting for buyers, Hubble said.
“By mid-2006, the supply outweighed the demand and it was definitely a buyer’s market,” he said.
Signs of a slow turnaround have surfaced in early 2007, although home builders and real estate professionals say a repeat of the red-hot 2005 market is unlikely.
According to Intermountain Multiple Listing Service statistics, housing sales in the Treasure Valley in 2006 were down 13.5 percent from the previous year.
Ada County suffered the brunt of the downturn, as the 10,113 transactions were almost 16 percent below 2005 totals. But Canyon County was not spared: 5,393 homes sold, off 9 percent from 2005.
Nevertheless, sales in Ada and Canyon County were 11 percent and 35 percent ahead of 2004, a year residential contractors say typifies a normal year for the local single-family housing market.
Jake Centers, head of Tahoe Homes in Meridian, said the 2005 boom was fueled by out-of-state investors who poured millions into area homes that they converted into rentals.
By mid-2006, however, waning investor interest and runaway housing production caught up with the market, he added.
“They (investors) just stopped looking, and it took a while for the market to react,” Centers said.
Centers said he expects 2007 to be a “stable” year.
“Everybody has cut way back on production,” he said. “So, we’ll go through the rest of the remaining inventory, and by 2008 the market will have completely corrected itself.”
But while housing sales were slipping in Boise, the Downtown condominium market boomed throughout 2005 and 2006.
BoDo developer Mark Rivers grabbed headlines last August when he proposed his $130 million Library Blocks redevelopment plan. The project would bring new housing, retail and office space to a blighted six-block area bordered by 9th and Capitol, and stretching from Myrtle south to the Boise River. The featured attraction would be a new $30 million Downtown library that would sit on the same site as the existing library.
Rivers said the slowdown in single-family housing should not hurt the Downtown condo market.
“It’s a market that is still emerging,” Rivers said. “So there is no historic data you can look at. But I think there is a lot of room left for a product that reflects urban living in Boise.”
Not to be outdone, Old Boise land owner Clay Carley and developer Gary Christensen announced their own ambitious retail, office and condominium project.
Carley and Christensen’s C-Squared Development LLC partnership plans a multiyear, multimillion-dollar mixed-use neighborhood development with a footprint of almost two square blocks, much of it in historic Old Boise.
Tentatively named Sustainable Community 1, the development would run from Main Street south to Front Street and from Sixth Street east to Fifth Street.
Initial plans called for phase one to include a 23-story condo tower where the Boise Rescue Mission now stands on Front Street.
Other condo projects under way include the CitySide Lofts at 13th and Myrtle, the Jefferson at 4th and Jefferson and the Royal Plaza at 11th and Main. Still to break ground are Boise Place, an ambitious hotel/condo development that would replace the ill-fated Boise Tower, and The Metropolitan at 15th and Idaho Streets.
Edition Date: 05/20/07
The Treasure Valley residential real estate market has taken a wild ride the last two years, with sales soaring to record heights in 2005 and early 2006, then plunging back to earth in late 2006 and early 2007.
Almost overnight, the seller’s market of 2005 became the buyer’s market of late 2006, with thousands of new and existing homes languishing on the market so long that some sellers this year were forced to slash their asking prices.
But falling sales didn’t automatically mean falling prices. Homeowners often hang onto homes rather than cut sales prices. Housing prices remained remarkably strong during the downturn in late 2006, with the median price of a home in Ada County jumping to $249,900, or almost 16 percent ahead of 2005. In Canyon County the median price was $160,000 at the end of ‘06, an increase of 12 percent over the previous year.
It was March 2007 before housing values in Ada County showed a 1.3 percent drop from the same month a year ago. Canyon County fared a little better, with a 2 percent gain from March 2006.
Uncontrolled construction of single-family homes throughout 2005 finally caught up with the industry, a builder said.
Don Hubble, owner of Meridian-based Hubble Homes, said that in 2000 there were fewer than 2,000 listings on the Intermountain Multiple Listing Service, which tracks sales in the Valley. By late 2006 there were almost 6,000 homes waiting for buyers, Hubble said.
“By mid-2006, the supply outweighed the demand and it was definitely a buyer’s market,” he said.
Signs of a slow turnaround have surfaced in early 2007, although home builders and real estate professionals say a repeat of the red-hot 2005 market is unlikely.
According to Intermountain Multiple Listing Service statistics, housing sales in the Treasure Valley in 2006 were down 13.5 percent from the previous year.
Ada County suffered the brunt of the downturn, as the 10,113 transactions were almost 16 percent below 2005 totals. But Canyon County was not spared: 5,393 homes sold, off 9 percent from 2005.
Nevertheless, sales in Ada and Canyon County were 11 percent and 35 percent ahead of 2004, a year residential contractors say typifies a normal year for the local single-family housing market.
Jake Centers, head of Tahoe Homes in Meridian, said the 2005 boom was fueled by out-of-state investors who poured millions into area homes that they converted into rentals.
By mid-2006, however, waning investor interest and runaway housing production caught up with the market, he added.
“They (investors) just stopped looking, and it took a while for the market to react,” Centers said.
Centers said he expects 2007 to be a “stable” year.
“Everybody has cut way back on production,” he said. “So, we’ll go through the rest of the remaining inventory, and by 2008 the market will have completely corrected itself.”
But while housing sales were slipping in Boise, the Downtown condominium market boomed throughout 2005 and 2006.
BoDo developer Mark Rivers grabbed headlines last August when he proposed his $130 million Library Blocks redevelopment plan. The project would bring new housing, retail and office space to a blighted six-block area bordered by 9th and Capitol, and stretching from Myrtle south to the Boise River. The featured attraction would be a new $30 million Downtown library that would sit on the same site as the existing library.
Rivers said the slowdown in single-family housing should not hurt the Downtown condo market.
“It’s a market that is still emerging,” Rivers said. “So there is no historic data you can look at. But I think there is a lot of room left for a product that reflects urban living in Boise.”
Not to be outdone, Old Boise land owner Clay Carley and developer Gary Christensen announced their own ambitious retail, office and condominium project.
Carley and Christensen’s C-Squared Development LLC partnership plans a multiyear, multimillion-dollar mixed-use neighborhood development with a footprint of almost two square blocks, much of it in historic Old Boise.
Tentatively named Sustainable Community 1, the development would run from Main Street south to Front Street and from Sixth Street east to Fifth Street.
Initial plans called for phase one to include a 23-story condo tower where the Boise Rescue Mission now stands on Front Street.
Other condo projects under way include the CitySide Lofts at 13th and Myrtle, the Jefferson at 4th and Jefferson and the Royal Plaza at 11th and Main. Still to break ground are Boise Place, an ambitious hotel/condo development that would replace the ill-fated Boise Tower, and The Metropolitan at 15th and Idaho Streets.
New book ranks Boise 10th best U.S. city
Authors prioritize climate, cost of living and quality of life in ratings
By BOB MINZESHEIMER - USA TODAY and Idaho Statesman Staff
Edition Date: 05/09/07
The Boise area ranks as the 10th best place to live in the United States according to a new book.
In "Cities Ranked & Rated" (Wiley, $24.99), authors Bert Sperling and Peter Sander rate cities in 10 categories, from the economy to the arts. It's a big move up for Boise; in 2004, the authors rated Boise as the 68th best place to live in the U.S.
"Once again we are honored by this distinction," said Boise Mayor Dave Bieter. "Ultimately, the most important opinions are those of our residents, but this kind of validation is quite gratifying. It also illustrates why we must continue to move forward with livability issues."
The book gives the most weight to cost of living, climate and one subjective measure: quality of life.
Gainesville, a "right-sized college town" that's home to the University of Florida, is the best place to live in the U.S., according to the book.
The authors give high marks to several other "satellite cities" attracting telecommuters, including Bellingham, Wash., (No. 2) and Colorado Springs (No. 4).
At the bottom of the rankings of 375 metropolitan areas is Modesto, Calif.
The 848-page book updates 2004 rankings by the authors, who have given more weight to affordable housing and reasonable commuting times.
Last month, Boise was named the third-best city in the country for business and careers by Forbes magazine. In July, Money magazine ranked Boise eighth on its Best Places to Live 2006 for small cities. Both magazines pointed to the city's strong economy and low unemployment rate.
Sperling and Sander's book relies on statistics as well as the authors' judgments of physical attractiveness and "ease of living."
By BOB MINZESHEIMER - USA TODAY and Idaho Statesman Staff
Edition Date: 05/09/07
The Boise area ranks as the 10th best place to live in the United States according to a new book.
In "Cities Ranked & Rated" (Wiley, $24.99), authors Bert Sperling and Peter Sander rate cities in 10 categories, from the economy to the arts. It's a big move up for Boise; in 2004, the authors rated Boise as the 68th best place to live in the U.S.
"Once again we are honored by this distinction," said Boise Mayor Dave Bieter. "Ultimately, the most important opinions are those of our residents, but this kind of validation is quite gratifying. It also illustrates why we must continue to move forward with livability issues."
The book gives the most weight to cost of living, climate and one subjective measure: quality of life.
Gainesville, a "right-sized college town" that's home to the University of Florida, is the best place to live in the U.S., according to the book.
The authors give high marks to several other "satellite cities" attracting telecommuters, including Bellingham, Wash., (No. 2) and Colorado Springs (No. 4).
At the bottom of the rankings of 375 metropolitan areas is Modesto, Calif.
The 848-page book updates 2004 rankings by the authors, who have given more weight to affordable housing and reasonable commuting times.
Last month, Boise was named the third-best city in the country for business and careers by Forbes magazine. In July, Money magazine ranked Boise eighth on its Best Places to Live 2006 for small cities. Both magazines pointed to the city's strong economy and low unemployment rate.
Sperling and Sander's book relies on statistics as well as the authors' judgments of physical attractiveness and "ease of living."
Ten Mile Interchange plan ready for Meridian City Council hearing Tuesday
Meridian is making comprehensive long-range plans ahead of development rather than playing catch-up
By Hilary Costa - hcosta@idahostatesman.com
Edition Date: 05/21/07
Meridian officials have a plan they're confident will bring developers to the city.
The comprehensive Ten Mile Interchange Specific Area Plan is an extremely detailed document laying out what future development should look like in the area surrounding the planned Interstate 84 interchange at Ten Mile Road.
Open fields still dominate the landscape there, but once the interchange is built (construction is expected to begin in 2009), the region is expected to boom with retail, residential and commercial developments.
"Will they come? I think they will," said Pete Friedman, a planner with the city.
The Meridian Planning Department will present the Ten Mile plan to City Council Tuesday night. If approved, it would be added to the city's Comprehensive Plan, which dictates land uses within the city.
The Ten Mile plan is a highly detailed proposal more than a year and nearly $100,000 in the making. It began with open house public meetings last summer and included a four-day planning summit called a charette, which brought representatives from the Valley's major transportation and municipal agencies together to lay out the future of the Ten Mile area. Friedman said about 700 people were involved in the process.
It has gone through multiple hearings at the city's Planning and Zoning Commission, which recommended its approval, prior to tomorrow's council hearing.
The plan that will go to council outlines a 2,798-acre area of new commercial and residential development, with a heavy focus on mixed-use neighborhoods.
The plan allows for single-family homes but emphasizes denser housing blocks ranging from apartments to townhouses, with built-in or nearby commercial uses that would encourage residents to live near where they work and walk most places they need to go.
At full build-out, the area would support more than 30,000 employees, according to city documents.
The plan also designates an upscale lifestyle center retail/commercial development, concentrated areas for industrial operations, park space and civic buildings.
To make the area come together as they envision it, city officials will have to work with the Ada County Highway District to plan roadways ahead of development, Friedman said, instead of playing catch-up to meet the transportation needs created by a new neighborhood or shopping district.
"We know developments going to move that way," Friedman said. "We just wanted to get in front of it."
Meridian has been accused in the past of allowing more growth than its network of rural, two-lane roads can handle.
The area also spans the current rail corridor, which city officials hope will one day house a light rail system connecting Caldwell to Downtown Boise.
The Ten Mile plan differs from anything the city has done before in that it relies heavily on design review guidelines. That means that once the city adopts certain design standards, it will have a legal basis to dictate how new buildings will look, down to the placement of windows on a store or the type of siding that goes on a condominium complex.
David Turnbull, president of Brighton Corporation, said he owns 120 acres of land within the Ten Mile area that the plan designates for mixed-use commercial, lifestyle center and high-density office uses.
Turnbull said design guidelines will help protect his investment because all surrounding development will be held to the same high standards.
Turnbull has been involved in the Ten Mile planning process from the beginning, and said there are still a lot of details to be worked out as it goes forward.
"It's nice to have kind of a blank slate of undeveloped property, and you can actually get some coordinated development plans going," Turnbull said.
• LDR: Low-density residential with a mix of lot sizes and a predominance of single-family homes.
• MDR: Medium-density residential of relatively low density with mostly single-family and two-unit homes. Also some three- to four-unit apartment buildings and community facilities such as libraries and schools.
• MHDR: Medium-high density residential with multi-family housing and community facilities, offices and smaller retail businesses.
• HDR: High-density residential with multi-family housing in larger and taller apartment buildings. At least 16 to 25 units per acre. Also retail/service businesses to serve residents.
• MUR: Mixed-use residential. Live-work units strongly encouraged.
• MUC: Mixed-use commercial with office, retail, recreational and employment uses with attached multi-family or single-family units.
• Lifestyle center: Upscale retail, professional services, offices, retail, civic services and residential. Outdoor format designed for pedestrians with open-air gathering spaces.
• LDR: Low-density office space for professional services and similar businesses. No retail.
• HDE: High-density employment for office, research and specialized businesses. No retail.
• Mixed employment: Office, research, light industrial. Retail designed to serve employees.
• Industrial: Typical industrial and manufacturing businesses. Not located near residential areas.By Hilary Costa
By Hilary Costa - hcosta@idahostatesman.com
Edition Date: 05/21/07
Meridian officials have a plan they're confident will bring developers to the city.
The comprehensive Ten Mile Interchange Specific Area Plan is an extremely detailed document laying out what future development should look like in the area surrounding the planned Interstate 84 interchange at Ten Mile Road.
Open fields still dominate the landscape there, but once the interchange is built (construction is expected to begin in 2009), the region is expected to boom with retail, residential and commercial developments.
"Will they come? I think they will," said Pete Friedman, a planner with the city.
The Meridian Planning Department will present the Ten Mile plan to City Council Tuesday night. If approved, it would be added to the city's Comprehensive Plan, which dictates land uses within the city.
The Ten Mile plan is a highly detailed proposal more than a year and nearly $100,000 in the making. It began with open house public meetings last summer and included a four-day planning summit called a charette, which brought representatives from the Valley's major transportation and municipal agencies together to lay out the future of the Ten Mile area. Friedman said about 700 people were involved in the process.
It has gone through multiple hearings at the city's Planning and Zoning Commission, which recommended its approval, prior to tomorrow's council hearing.
The plan that will go to council outlines a 2,798-acre area of new commercial and residential development, with a heavy focus on mixed-use neighborhoods.
The plan allows for single-family homes but emphasizes denser housing blocks ranging from apartments to townhouses, with built-in or nearby commercial uses that would encourage residents to live near where they work and walk most places they need to go.
At full build-out, the area would support more than 30,000 employees, according to city documents.
The plan also designates an upscale lifestyle center retail/commercial development, concentrated areas for industrial operations, park space and civic buildings.
To make the area come together as they envision it, city officials will have to work with the Ada County Highway District to plan roadways ahead of development, Friedman said, instead of playing catch-up to meet the transportation needs created by a new neighborhood or shopping district.
"We know developments going to move that way," Friedman said. "We just wanted to get in front of it."
Meridian has been accused in the past of allowing more growth than its network of rural, two-lane roads can handle.
The area also spans the current rail corridor, which city officials hope will one day house a light rail system connecting Caldwell to Downtown Boise.
The Ten Mile plan differs from anything the city has done before in that it relies heavily on design review guidelines. That means that once the city adopts certain design standards, it will have a legal basis to dictate how new buildings will look, down to the placement of windows on a store or the type of siding that goes on a condominium complex.
David Turnbull, president of Brighton Corporation, said he owns 120 acres of land within the Ten Mile area that the plan designates for mixed-use commercial, lifestyle center and high-density office uses.
Turnbull said design guidelines will help protect his investment because all surrounding development will be held to the same high standards.
Turnbull has been involved in the Ten Mile planning process from the beginning, and said there are still a lot of details to be worked out as it goes forward.
"It's nice to have kind of a blank slate of undeveloped property, and you can actually get some coordinated development plans going," Turnbull said.
• LDR: Low-density residential with a mix of lot sizes and a predominance of single-family homes.
• MDR: Medium-density residential of relatively low density with mostly single-family and two-unit homes. Also some three- to four-unit apartment buildings and community facilities such as libraries and schools.
• MHDR: Medium-high density residential with multi-family housing and community facilities, offices and smaller retail businesses.
• HDR: High-density residential with multi-family housing in larger and taller apartment buildings. At least 16 to 25 units per acre. Also retail/service businesses to serve residents.
• MUR: Mixed-use residential. Live-work units strongly encouraged.
• MUC: Mixed-use commercial with office, retail, recreational and employment uses with attached multi-family or single-family units.
• Lifestyle center: Upscale retail, professional services, offices, retail, civic services and residential. Outdoor format designed for pedestrians with open-air gathering spaces.
• LDR: Low-density office space for professional services and similar businesses. No retail.
• HDE: High-density employment for office, research and specialized businesses. No retail.
• Mixed employment: Office, research, light industrial. Retail designed to serve employees.
• Industrial: Typical industrial and manufacturing businesses. Not located near residential areas.By Hilary Costa
Wednesday, May 02, 2007
Retail wave hits Valley; more stores are on the way
By Ken Dey - Idaho Statesman
Edition Date: 04/29/07
Deanna Durfee didn't mind battling for parking and braving nearly hourlong checkout lines to shop during the grand opening of Kohl's in Meridian earlier this month.
"It's nice to now have a variety of places to shop in a lot of different areas," she said.
Look around the Treasure Valley. New stores like Kohl's seem to be appearing out of nowhere.
"It's quite a phenomenon," Paul Hiller, executive director of the Boise Economic Valley Partnership.
As Boise's retail landscape matures, growth has been moving westward to Meridian and Nampa, creating large destination shopping areas anchored by big-box stores. The trend started in 1999 with the opening of the Crossroads shopping center in Meridian at the intersection of Eagle Road and Fairview Avenue.
The latest areas are in Nampa. Treasure Valley Marketplace at the Karcher Road interchange of Interstate 84 is the largest, anchored by a Costco, Kohl's, Target and Best Buy. Retail development also is growing near the Idaho Center with a new Wal-Mart Supercenter and Sam's Club. And a proposed new Gateway development at Interstate 84's Garrity Boulevard exit will be anchored by a J.C. Penney store.
Dozens of smaller retailers are moving in, too, such as Taco Del Mar, a fast-casual Mexican food franchise. Developer Todd Hicks opened his first location at Eagle and McMillan Roads in fall 2004. He now has nine locations with three more in development.
"We know that the population is going to keep growing, and we have to build retail to support that," Hicks said. "People don't always want to drive into Boise to go to a Target."
To be sure, new stores still are coming into to Boise. Sporting goods giant Cabela's opened its first location in Idaho on Franklin Road near Boise Towne Square. In Downtown Boise, the BoDo development on 8th Street between Front and Myrtle streets brought new specialty retailers such as Urban Outfitters.
Valley residents now have choices for shopping and dining that rival those of bigger cities like Portland, Seattle and Salt Lake City.
Just a decade ago, Boise shoppers were thrilled with the opening of the valley's first Wal-Mart on Overland Road. The valley now has six.
"It's crazy to see this much growth," said Jeni Ranstrom, 33, a long-time Meridian resident shopping at the new Kohl's. "This is where my father used to hunt and where we would go for country drives."
Still, Ranstrom said she thinks there is still room for more stores. Her suggestion: An Ikea, the popular home-furnishings store.
Attractive demographics
"It's a pleasant surprise to see this many retailers having an interest in the Treasure Valley, but I'm not that surprised because the demographics are exactly what retailers look for," said Bob Mitchell, a retail shopping center specialist and partner with Thornton Oliver Keller Commercial Real Estate in Boise.
Mitchell, whose firm is marketing the Treasure Valley Marketplace in Nampa, said the area's population, relatively high income and low unemployment is a "great recipe" for retailers.
More than a third of Idaho's nearly 1.5 million people live in the Treasure Valley. Between 2000 and 2006, the population in the Boise metropolitan area, which includes Ada, Canyon, Gem, Boise and Owyhee counties, grew by more than 20 percent, to 567,640 from 464,840, according to the latest U.S. Census data.
Ada County's average income is also the second largest in the state at $39,302. Canyon County's average income is much lower at $20,397, but the new stores in Canyon County also serve much of western Ada County.
Pam Eaton, with the Idaho Retailers Association, says demographics also play a part.
"We have a bunch of different type of people moving in the the area from all over, with different socioeconomic backgrounds and different tastes in retail," Eaton said, "Everyone from college students, who seem to have more money than college students 10 to 20 years ago, to executives from companies like Micron, HP and SuperValu."
Mike Griswold, a retail expert with Boston-based AMR Research who has lived in Boise for two years, said the recognition Boise has received nationally over the past several years in magazines such as Forbes has helped catch the attention of retailers. Forbes named Boise as the third best place in the country for business and careers this year.
"You now have to take Boise seriously as a place to bring your business," Griswold said.
Dan Coughlin, president of the Missouri-based Coughlin Co. and the author of the coming book "Accelerate: 20 Practical Lessons to Boost Business Momentum," said large retail companies are almost always in an expansion mode, and they look at areas where they can have an immediate impact on a market.
"Whoever can get a foothold in a community first and build relationships has the advantage," he said.
Mike Whatley, district manager for Kohl's, said the area had been on the company's radar.
And who is Kohl's target customer?
"It's the mom with a family with a disposable income who typically shops at the more traditional department stores," he said.
Just the beginning
The westward expansion probably will continue for years.
"For the next three to five years you're going to see a growing demand for retail services out where people live," Mitchell said.
A second phase of the Treasure Valley Marketplace already is planned and will bring another PetSmart and Sportsman's Warehouse as well as more banks and fast-food restaurants, Mitchell said.
Mitchell expects the next center for major retail growth to be the proposed Ten Mile Road interchange in west Meridian. Work on the I-84 interchange is supposed to start by 2010, and he expects retail to follow, just as it did with the Karcher Road interchange and Midland Boulevard exit in Nampa.
Hicks expects growth moving forward to fill in the holes between Boise, Meridian and Nampa and move into the outlying areas of Kuna and Star.
"Look at Kuna — it doesn't have a lot of retail, yet it has 20,000 people," he said. "We know that the population is going to keep growing, and you have to build retail to support that."
By the end of 2008, Hicks expects to have 15 Taco Del Mar locations in the valley.
"I'll stop when the valley stops," he said.
Edition Date: 04/29/07
Deanna Durfee didn't mind battling for parking and braving nearly hourlong checkout lines to shop during the grand opening of Kohl's in Meridian earlier this month.
"It's nice to now have a variety of places to shop in a lot of different areas," she said.
Look around the Treasure Valley. New stores like Kohl's seem to be appearing out of nowhere.
"It's quite a phenomenon," Paul Hiller, executive director of the Boise Economic Valley Partnership.
As Boise's retail landscape matures, growth has been moving westward to Meridian and Nampa, creating large destination shopping areas anchored by big-box stores. The trend started in 1999 with the opening of the Crossroads shopping center in Meridian at the intersection of Eagle Road and Fairview Avenue.
The latest areas are in Nampa. Treasure Valley Marketplace at the Karcher Road interchange of Interstate 84 is the largest, anchored by a Costco, Kohl's, Target and Best Buy. Retail development also is growing near the Idaho Center with a new Wal-Mart Supercenter and Sam's Club. And a proposed new Gateway development at Interstate 84's Garrity Boulevard exit will be anchored by a J.C. Penney store.
Dozens of smaller retailers are moving in, too, such as Taco Del Mar, a fast-casual Mexican food franchise. Developer Todd Hicks opened his first location at Eagle and McMillan Roads in fall 2004. He now has nine locations with three more in development.
"We know that the population is going to keep growing, and we have to build retail to support that," Hicks said. "People don't always want to drive into Boise to go to a Target."
To be sure, new stores still are coming into to Boise. Sporting goods giant Cabela's opened its first location in Idaho on Franklin Road near Boise Towne Square. In Downtown Boise, the BoDo development on 8th Street between Front and Myrtle streets brought new specialty retailers such as Urban Outfitters.
Valley residents now have choices for shopping and dining that rival those of bigger cities like Portland, Seattle and Salt Lake City.
Just a decade ago, Boise shoppers were thrilled with the opening of the valley's first Wal-Mart on Overland Road. The valley now has six.
"It's crazy to see this much growth," said Jeni Ranstrom, 33, a long-time Meridian resident shopping at the new Kohl's. "This is where my father used to hunt and where we would go for country drives."
Still, Ranstrom said she thinks there is still room for more stores. Her suggestion: An Ikea, the popular home-furnishings store.
Attractive demographics
"It's a pleasant surprise to see this many retailers having an interest in the Treasure Valley, but I'm not that surprised because the demographics are exactly what retailers look for," said Bob Mitchell, a retail shopping center specialist and partner with Thornton Oliver Keller Commercial Real Estate in Boise.
Mitchell, whose firm is marketing the Treasure Valley Marketplace in Nampa, said the area's population, relatively high income and low unemployment is a "great recipe" for retailers.
More than a third of Idaho's nearly 1.5 million people live in the Treasure Valley. Between 2000 and 2006, the population in the Boise metropolitan area, which includes Ada, Canyon, Gem, Boise and Owyhee counties, grew by more than 20 percent, to 567,640 from 464,840, according to the latest U.S. Census data.
Ada County's average income is also the second largest in the state at $39,302. Canyon County's average income is much lower at $20,397, but the new stores in Canyon County also serve much of western Ada County.
Pam Eaton, with the Idaho Retailers Association, says demographics also play a part.
"We have a bunch of different type of people moving in the the area from all over, with different socioeconomic backgrounds and different tastes in retail," Eaton said, "Everyone from college students, who seem to have more money than college students 10 to 20 years ago, to executives from companies like Micron, HP and SuperValu."
Mike Griswold, a retail expert with Boston-based AMR Research who has lived in Boise for two years, said the recognition Boise has received nationally over the past several years in magazines such as Forbes has helped catch the attention of retailers. Forbes named Boise as the third best place in the country for business and careers this year.
"You now have to take Boise seriously as a place to bring your business," Griswold said.
Dan Coughlin, president of the Missouri-based Coughlin Co. and the author of the coming book "Accelerate: 20 Practical Lessons to Boost Business Momentum," said large retail companies are almost always in an expansion mode, and they look at areas where they can have an immediate impact on a market.
"Whoever can get a foothold in a community first and build relationships has the advantage," he said.
Mike Whatley, district manager for Kohl's, said the area had been on the company's radar.
And who is Kohl's target customer?
"It's the mom with a family with a disposable income who typically shops at the more traditional department stores," he said.
Just the beginning
The westward expansion probably will continue for years.
"For the next three to five years you're going to see a growing demand for retail services out where people live," Mitchell said.
A second phase of the Treasure Valley Marketplace already is planned and will bring another PetSmart and Sportsman's Warehouse as well as more banks and fast-food restaurants, Mitchell said.
Mitchell expects the next center for major retail growth to be the proposed Ten Mile Road interchange in west Meridian. Work on the I-84 interchange is supposed to start by 2010, and he expects retail to follow, just as it did with the Karcher Road interchange and Midland Boulevard exit in Nampa.
Hicks expects growth moving forward to fill in the holes between Boise, Meridian and Nampa and move into the outlying areas of Kuna and Star.
"Look at Kuna — it doesn't have a lot of retail, yet it has 20,000 people," he said. "We know that the population is going to keep growing, and you have to build retail to support that."
By the end of 2008, Hicks expects to have 15 Taco Del Mar locations in the valley.
"I'll stop when the valley stops," he said.
Monday, January 22, 2007
No backwater
Boise is an outdoor playground with a lively downtown and budding arts scene
By MATTHEW PREUSCH
NEW YORK TIMES NEWS SERVICE
Boise, Idaho, once ruled by the bait-and-bullet crowd, has embraced the Lycra lifestyle. Sitting at the junction of the arid plateau of the high desert and the western foothills of the Rocky Mountains, the capital of Idaho offers all the outdoor advantages of more ballyhooed Western towns but with less, well, ballyhoo.
The town has been on the front of national sports pages for the Boise State football team which ran up a 13-0 record but was denied a spot in the national championship game.
Boise may have a population of about 190,000, but it is still a mining and farming town at heart, and it attracts active professionals and young families who will tell you that theirs is a great hometown – just don't let too many people know. They wouldn't want those trail heads or hot springs to get too crowded. A rejuvenated downtown and a budding arts community mean that after a day of rafting on the Payette River, mountain biking in the foothills or carving at Bogus Basin Ski Resort you don't have to turn in once the sun fades behind the Snake River.
Here's some ideas on how to spend 36 hours in Boise:Friday 4 p.m. 1) TWO HEADS ARE BETTER
It's best to educate before you recreate, so check out the stuffed two-headed calf and other marvels and curiosities at the Idaho Historical Museum (610 N. Julia Davis Drive, 208-334-2120; www.idahohistory.net /museum.html) in Julia Davis Park. From there, walk down the Boise River Greenbelt, a public corridor of parks and trails snug against the Boise River, to the Cottonwood Grille (913 W. River St., 208-333-9800) for a pint of Mirror Pond pale ale or other regional microbrews on the patio overlooking the river and, of course, cottonwoods.7 p.m. 2) TRY THE TROUT TOWER
Jon Mortimer draws from regional farmers and ranchers to create an ever-changing menu distinct to southern Idaho at Mortimer's (110 S. Fifth St., 208-338-6550), in the basement of the venerable Belgravia building. On one recent night, Mortimer served a tower of trout (raised in nearby Buhl) perched on a foundation of, what else, Idaho potatoes and stuffed with Maine lobster. (Sorry, there are no lobsters in the Snake River.) Pair this dish with a glass of Chardonnay from Hells Canyon Winery in Caldwell. Always available is the seven-course chef's tasting menu. Seating is limited at this spot, popular with downtown professionals and couples out for special occasions, so reservations are recommended.Saturday 8 a.m. 3) BREAKFAST BUILDERS
Put your name on the list at Goldy's Breakfast Bistro (108 S. Capitol Blvd., 208-345-4100) and stroll two blocks north to the Capitol dome to contemplate the statue of Gov. Frank Steunenberg; he was killed in 1905 by a bomb planted near his garden gate by radicals enraged by his rough handling of labor uprisings in upstate mines. But don't let that century-old assassination ruin your appetite while you sit under the flying light bulb sculpture at Goldy's and dig in to a plate of potato, beet and bacon hash, one possible component of the popular "build your own breakfast." If you're in town anywhere from April to October, join stroller-pushing Boiseans at the Capital City Public Market (9:30 a.m. to 1:30 p.m. Saturdays, 208-345-9287), where the artists of Boise Art Glass (208-345-1825) can make you a custom trinket as you graze on local meats such as elk jerky and the Idaho version of classic goat cheese.11 a.m. 4) BASQUE BRAWN
A century ago, Basque shepherds tended flocks in the grassy foothills around Boise. Today the mayor and many other prominent Idahoans claim Basque heritage. Learn about the Basques' culture, like their love of a stirring strongman competition, at the Basque Museum and Cultural Center (611 Grove St., 208-343-2671; www.basquemuseum.com). Then grab a table at Gernika Basque Pub and Eatery (202 S. Capitol Blvd., 208-344-2175). The lamb grinder is a safe bet, but if it's Saturday brave the beef tongue in tomato and pepper sauce, washing it down with a bottle of Zapiain, a Basque cider, or a kalimotxo, a Coca-Cola mixed with red wine.1:30 p.m. 5) RAPID TRANSIT
Join the weekend exodus of pickups hauling A.T.V.'s and Subarus bearing bikes heading over the brown foothills of the Boise Front to outdoor adventure. Drive 45 minutes north to Horseshoe Bend and hook up with the Cascade Raft Company (7050 Highway 55, 800-292-7238) for a half-day trip through Class III and IV rapids on the Lower South Fork of the Payette River ($45). Not feeling adventurous? Stay in town, buy an inner tube and join lazy locals floating down the relatively placid Boise River for six miles between Barber Park (4049 Eckert Road) and Ann Morrison Park (1000 Americana Blvd.), but avoid the river when it's high, which it typically is in the spring.7 p.m. 6) HOW ABOUT A POTATO-TINI?
Swap your swim trunks for town wear and find an outdoor table on the pedestrian plaza outside the overtly cosmopolitan Red Feather Lounge (246 N. Eighth St., 208-429-6340), where the focus is on "post-classic" cocktails, like the Tangerine Rangoon: Plymouth gin, fresh tangerine juice and homemade pomegranate grenadine. Pair that with a slow-roasted Muscovy duck and you might forget that you're in laid-back Boise. That is, until you spot the guy in running shorts and a fanny pack at the bar.8 p.m. 7) LAWN ORDER
Borrow a blanket from your hotel and find a spot on the lawn at the Idaho Shakespeare Festival, overlooking the Boise River east of town (5657 Warm Springs Ave., 208-336-9221; www.idahoshakespeare.org; from $27), which runs June to September. It features productions of Shakespeare as well as more contemporary works at an outdoor amphitheater that overlooks the Boise River. As the sun sets and the stars come out, you might start to think that Boise's status as one of the most isolated metro areas in the lower 48 states is not a bad thing.Sunday 9 a.m. 8) FULL OF BEANS
Head to Idaho Mountain Touring (1310 W. Main St., 208-336-3854), rent a full-suspension mountain bike ($25 for about four hours or $35 for the day) and head north on 13th Street to Hyde Park, a neighborhood of bungalows and tree-lined streets where you can get an $8 haircut three doors down from a community art gallery. Park your bike with the others in front of Java Hyde Park (1612 N. 13th Street, 208-345-4777) and make your way past the dogs tied up outside to order the Bowl of Soul, a sugary concoction of coffee, espresso, Mexican coffee and fresh whipped cream.10 a.m. 9) THE WHEEL DEAL
Fortified, and perhaps jittery, remount your rented ride and pedal a few blocks farther up 13th Street to Camel's Back Park (1200 W. Heron St.). Look for the trail head east of the tennis courts, one of many entrances to the Ridge to Rivers trail system, a single- and double-track network that covers 80,000 acres between the Boise Ridge and Boise River. Climb the Red Cliffs Trail (No. 39, according to the map that charts the system) to open vistas of the Treasure Valley below, then loop back down on the rollicking Lower Hulls Gulch Trail (No. 29). Repeat as necessary.
Before returning that rental join the other trail warriors at Parrilla Grill (1512 N. 13th St., 208-323-4688) for buffalo tacos or a Wrap of Khan with tofu and peanut sauce and brag about how you bombed all over Boise too.
By MATTHEW PREUSCH
NEW YORK TIMES NEWS SERVICE
Boise, Idaho, once ruled by the bait-and-bullet crowd, has embraced the Lycra lifestyle. Sitting at the junction of the arid plateau of the high desert and the western foothills of the Rocky Mountains, the capital of Idaho offers all the outdoor advantages of more ballyhooed Western towns but with less, well, ballyhoo.
The town has been on the front of national sports pages for the Boise State football team which ran up a 13-0 record but was denied a spot in the national championship game.
Boise may have a population of about 190,000, but it is still a mining and farming town at heart, and it attracts active professionals and young families who will tell you that theirs is a great hometown – just don't let too many people know. They wouldn't want those trail heads or hot springs to get too crowded. A rejuvenated downtown and a budding arts community mean that after a day of rafting on the Payette River, mountain biking in the foothills or carving at Bogus Basin Ski Resort you don't have to turn in once the sun fades behind the Snake River.
Here's some ideas on how to spend 36 hours in Boise:Friday 4 p.m. 1) TWO HEADS ARE BETTER
It's best to educate before you recreate, so check out the stuffed two-headed calf and other marvels and curiosities at the Idaho Historical Museum (610 N. Julia Davis Drive, 208-334-2120; www.idahohistory.net /museum.html) in Julia Davis Park. From there, walk down the Boise River Greenbelt, a public corridor of parks and trails snug against the Boise River, to the Cottonwood Grille (913 W. River St., 208-333-9800) for a pint of Mirror Pond pale ale or other regional microbrews on the patio overlooking the river and, of course, cottonwoods.7 p.m. 2) TRY THE TROUT TOWER
Jon Mortimer draws from regional farmers and ranchers to create an ever-changing menu distinct to southern Idaho at Mortimer's (110 S. Fifth St., 208-338-6550), in the basement of the venerable Belgravia building. On one recent night, Mortimer served a tower of trout (raised in nearby Buhl) perched on a foundation of, what else, Idaho potatoes and stuffed with Maine lobster. (Sorry, there are no lobsters in the Snake River.) Pair this dish with a glass of Chardonnay from Hells Canyon Winery in Caldwell. Always available is the seven-course chef's tasting menu. Seating is limited at this spot, popular with downtown professionals and couples out for special occasions, so reservations are recommended.Saturday 8 a.m. 3) BREAKFAST BUILDERS
Put your name on the list at Goldy's Breakfast Bistro (108 S. Capitol Blvd., 208-345-4100) and stroll two blocks north to the Capitol dome to contemplate the statue of Gov. Frank Steunenberg; he was killed in 1905 by a bomb planted near his garden gate by radicals enraged by his rough handling of labor uprisings in upstate mines. But don't let that century-old assassination ruin your appetite while you sit under the flying light bulb sculpture at Goldy's and dig in to a plate of potato, beet and bacon hash, one possible component of the popular "build your own breakfast." If you're in town anywhere from April to October, join stroller-pushing Boiseans at the Capital City Public Market (9:30 a.m. to 1:30 p.m. Saturdays, 208-345-9287), where the artists of Boise Art Glass (208-345-1825) can make you a custom trinket as you graze on local meats such as elk jerky and the Idaho version of classic goat cheese.11 a.m. 4) BASQUE BRAWN
A century ago, Basque shepherds tended flocks in the grassy foothills around Boise. Today the mayor and many other prominent Idahoans claim Basque heritage. Learn about the Basques' culture, like their love of a stirring strongman competition, at the Basque Museum and Cultural Center (611 Grove St., 208-343-2671; www.basquemuseum.com). Then grab a table at Gernika Basque Pub and Eatery (202 S. Capitol Blvd., 208-344-2175). The lamb grinder is a safe bet, but if it's Saturday brave the beef tongue in tomato and pepper sauce, washing it down with a bottle of Zapiain, a Basque cider, or a kalimotxo, a Coca-Cola mixed with red wine.1:30 p.m. 5) RAPID TRANSIT
Join the weekend exodus of pickups hauling A.T.V.'s and Subarus bearing bikes heading over the brown foothills of the Boise Front to outdoor adventure. Drive 45 minutes north to Horseshoe Bend and hook up with the Cascade Raft Company (7050 Highway 55, 800-292-7238) for a half-day trip through Class III and IV rapids on the Lower South Fork of the Payette River ($45). Not feeling adventurous? Stay in town, buy an inner tube and join lazy locals floating down the relatively placid Boise River for six miles between Barber Park (4049 Eckert Road) and Ann Morrison Park (1000 Americana Blvd.), but avoid the river when it's high, which it typically is in the spring.7 p.m. 6) HOW ABOUT A POTATO-TINI?
Swap your swim trunks for town wear and find an outdoor table on the pedestrian plaza outside the overtly cosmopolitan Red Feather Lounge (246 N. Eighth St., 208-429-6340), where the focus is on "post-classic" cocktails, like the Tangerine Rangoon: Plymouth gin, fresh tangerine juice and homemade pomegranate grenadine. Pair that with a slow-roasted Muscovy duck and you might forget that you're in laid-back Boise. That is, until you spot the guy in running shorts and a fanny pack at the bar.8 p.m. 7) LAWN ORDER
Borrow a blanket from your hotel and find a spot on the lawn at the Idaho Shakespeare Festival, overlooking the Boise River east of town (5657 Warm Springs Ave., 208-336-9221; www.idahoshakespeare.org; from $27), which runs June to September. It features productions of Shakespeare as well as more contemporary works at an outdoor amphitheater that overlooks the Boise River. As the sun sets and the stars come out, you might start to think that Boise's status as one of the most isolated metro areas in the lower 48 states is not a bad thing.Sunday 9 a.m. 8) FULL OF BEANS
Head to Idaho Mountain Touring (1310 W. Main St., 208-336-3854), rent a full-suspension mountain bike ($25 for about four hours or $35 for the day) and head north on 13th Street to Hyde Park, a neighborhood of bungalows and tree-lined streets where you can get an $8 haircut three doors down from a community art gallery. Park your bike with the others in front of Java Hyde Park (1612 N. 13th Street, 208-345-4777) and make your way past the dogs tied up outside to order the Bowl of Soul, a sugary concoction of coffee, espresso, Mexican coffee and fresh whipped cream.10 a.m. 9) THE WHEEL DEAL
Fortified, and perhaps jittery, remount your rented ride and pedal a few blocks farther up 13th Street to Camel's Back Park (1200 W. Heron St.). Look for the trail head east of the tennis courts, one of many entrances to the Ridge to Rivers trail system, a single- and double-track network that covers 80,000 acres between the Boise Ridge and Boise River. Climb the Red Cliffs Trail (No. 39, according to the map that charts the system) to open vistas of the Treasure Valley below, then loop back down on the rollicking Lower Hulls Gulch Trail (No. 29). Repeat as necessary.
Before returning that rental join the other trail warriors at Parrilla Grill (1512 N. 13th St., 208-323-4688) for buffalo tacos or a Wrap of Khan with tofu and peanut sauce and brag about how you bombed all over Boise too.
Sunday, December 10, 2006
Iron Eagle Realty opens doors
Dear Friends, Colleagues and Clients:
We are pleased to announce that we have started our own real estate brokerage, Iron Eagle Realty. We opened our doors on Fri., Dec. 1st. 2006. Our offices are located at the Iron Eagle Executive Center in Eagle, ID. Our focus is helping investors build their wealth through the sale and/or acquisition of residential income properties, commercial properties and land. In addition, we will continue to assist home owners in listing, marketing and selling their homes. In the months to come we will announce strategic additions to the Iron Eagle Realty Team.
As in the past, we will continue to focus on a high level of service and ethics. We know that each investor and home owner has different needs and do not all fit into the same box. I look forward to continuing our relationship or developing a new one with you. Please don't hesitate to call or email me if you have any questions. I look forward to helping you Build Your Wealth!
Regards,
Michael Hon
Broker - MBA, GRI
Investment Property Consultant
IronEagleRE.com
1159 E Iron Eagle Dr., Ste 170
Eagle, ID 83616
208 919 0458 Direct
208 939 9033 Office
208 460 3885 eFax
Focused on Building Your Wealth
We are pleased to announce that we have started our own real estate brokerage, Iron Eagle Realty. We opened our doors on Fri., Dec. 1st. 2006. Our offices are located at the Iron Eagle Executive Center in Eagle, ID. Our focus is helping investors build their wealth through the sale and/or acquisition of residential income properties, commercial properties and land. In addition, we will continue to assist home owners in listing, marketing and selling their homes. In the months to come we will announce strategic additions to the Iron Eagle Realty Team.
As in the past, we will continue to focus on a high level of service and ethics. We know that each investor and home owner has different needs and do not all fit into the same box. I look forward to continuing our relationship or developing a new one with you. Please don't hesitate to call or email me if you have any questions. I look forward to helping you Build Your Wealth!
Regards,
Michael Hon
Broker - MBA, GRI
Investment Property Consultant
IronEagleRE.com
1159 E Iron Eagle Dr., Ste 170
Eagle, ID 83616
208 919 0458 Direct
208 939 9033 Office
208 460 3885 eFax
Focused on Building Your Wealth
Saturday, November 25, 2006
Tuesday, November 21, 2006
Last Week in the News
Led by big declines in auto and gasoline costs, producer prices fell 1.6% in October, tying the record decline set in October 2001, the Labor Department reported November 14. Core producer prices -- excluding energy and food -- fell 0.9%, the largest retreat in 13 years. Economists expected producer prices to fall 0.5% and the core rate to rise 0.1%.
Consumer prices fell a bigger-than-expected 0.5% in October, following a similar decline in September. Analysts had predicted a 0.3% decrease. Core consumer prices -- minus energy and food -- rose 0.1%, the slowest pace in eight months. The Consumer Price Index is up 1.3% in the past year, the slowest rate of inflation since June 2002.
Retail sales slid 0.2% in October, largely due to plunging prices at the gasoline pump, the Commerce Department said November 14. Excluding gasoline sales, retail sales would have been up 0.4% in October.
Construction of new, single-family homes and apartments fell 14.6% in October to an annual rate of 1.486 million units, the lowest level in more than six years, the Commerce Department reported November 17. Applications for new building permits declined 6.3% to a seasonally adjusted rate of 1.535 million, the lowest level in nine years.
Sparked by falling interest rates, mortgage applications increased 4.3% in the week ending November 10, the best showing since January of this year, the Mortgage Bankers Association reported November 15.
Initial jobless claims decreased by 2,000 in the week ending November 11, suggesting the labor market remains favorable, the Labor Department said November 16.
This week look for updates on leading economic indicators on November 20.
Consumer prices fell a bigger-than-expected 0.5% in October, following a similar decline in September. Analysts had predicted a 0.3% decrease. Core consumer prices -- minus energy and food -- rose 0.1%, the slowest pace in eight months. The Consumer Price Index is up 1.3% in the past year, the slowest rate of inflation since June 2002.
Retail sales slid 0.2% in October, largely due to plunging prices at the gasoline pump, the Commerce Department said November 14. Excluding gasoline sales, retail sales would have been up 0.4% in October.
Construction of new, single-family homes and apartments fell 14.6% in October to an annual rate of 1.486 million units, the lowest level in more than six years, the Commerce Department reported November 17. Applications for new building permits declined 6.3% to a seasonally adjusted rate of 1.535 million, the lowest level in nine years.
Sparked by falling interest rates, mortgage applications increased 4.3% in the week ending November 10, the best showing since January of this year, the Mortgage Bankers Association reported November 15.
Initial jobless claims decreased by 2,000 in the week ending November 11, suggesting the labor market remains favorable, the Labor Department said November 16.
This week look for updates on leading economic indicators on November 20.
Monday, November 06, 2006
Ruling Out Nothing
Although fixed mortgage rates dropped by a dozen basis points this week to land at 6.38%, you shouldn't expect them to wait there for long, according to the latest data from the nation's leading survey of mortgage pricing. Hybrid 5-1 ARMS tripped lower, too, easing 13 basis points to close the survey period at 6.16%. Both figures are close to their year's low.
Rates wended their way down this week in a fairly steady fashion, as each piece of soft economic data seemed to make it more likely that the next Fed move would be to cut interest rates amid a slowing economy. The low point for yields came Wednesday, when the benchmark 10-year Treasury hit 4.57% on news that the Institute for Supply Management (ISM) missed meeting expectations by a fair margin. The ISM index tracks manufacturing activity and denotes a reading of 50 as the breakeven level, so it was little wonder that the markets took notice that October's ISM index fell to 51.2 for the month, the lowest since June 2003. One bright spot in the report was that for the first time in quite a while, the number of companies reporting lower input prices was greater than those reporting higher input prices. While we know that many commodity costs have eased off their highs, this suggests that steady-to-lower inflation has begun to work its way into the production stream.
This should be good news; according to Economics 101, easing growth lowers demand for resources and lower demand for resources cools price pressures, at least for commodities and energy costs. Easing growth should also serve to lower demand for labor, a different kind of resource, but commodities and human capital demands don't necessarily have arcs which start at the same time or progress in the same way. The Fed has expressed concerns about "resource utilization" which obviously includes human capital, and news this week suggests that they should remain concerned.
For example, one question is whether the arc of prior inflation is working its way into wages. It is, according to the quarterly Employment Cost Index, at least to the largest degree since the second quarter of 2004. The ECI for 3Q06 rose by 1.0%, a little above expectations, with the complete cost of having an employee on the books pressed higher by benefit costs. The ECI has risen by 3.3% over the past year; while still mild by most measurements, the direction continues upward.
Buttressing concerns over labor growth and costs was the monthly Employment Report for November. The 92,000 new hires were a little weaker than forecasts, but since layoffs have been slow, hiring should be expected to be as well. However, the markets were unprepared for sizable revisions to both September and, especially, to August payroll growth. September was revised up to 148,000 new hires, which August was pushed up to 230,000. Both revisions point to a much healthier job market than was originally reported, as witness that the nation's unemployment rate slipped to 4.4% -- the lowest reading since 2001. Perhaps hiring is weak not because the economy is weak, but because there are few qualified people available to hire? This would also dovetail nicely with the muted levels of layoffs; it stands to reason that you won't fire someone unless you believe that can replace them.
Layoffs are low, according to the latest Challenger, Gray and Christmas survey which found only 69,177 workers slated to lose their jobs in workforce reductions announced in October. That's down from 100,315 in September, and comparable with the lowest levels of the year. However, during the week ending October 28, there was a slight uptick in applications for new unemployment benefits, with 327,000 new filings, up from 309,000 the week before. Some of those filings are probably related to the fall in homebuilding activity. Construction Spending of all types fell by 0.3% in September, but spending for residential projects fell by 1.1% and has now been posting negative numbers for six months.
There's nothing economically wrong with a strong employment base, provided there are at least some offsets for higher wage and benefit costs. Provided worker productivity is rising, workers can be paid more in wages and benefits without businesses needing to raise prices of goods and services in order to afford them. That said, all-important productivity growth vanished in the third quarter of 2006, where no gain was reported; forecasts hoped for an increase in productivity to 1.3% for the period. The cost of labor per unit produced rose by 3.8% for the quarter, somewhat above the hoped-for level. Less productive workers and rising labor costs are not what the Fed has been hoping to see as they work to contain not only inflation today, but expectations of inflation in the near and not-so-near future. It is because labor costs remain an issue that additional rate increases by the Fed cannot yet be ruled out.
Wage growth helped to move Personal Income growth higher by 0.5% in September, up from August's 0.4% lift. Spending, though, rose by just 0.1% for the month, and the combination of the two helped move the nation's savings rate to -0.2% -- the closest to zero it has been all year. The inflation component of the report revealed a 'core' Personal Consumption Expenditure (PCE) index of 2.4% for the month, still above the range believed to be the Fed's preferred mark.
Having a job amid falling gasoline costs is a recipe for a sunny mood, and according to the weekly ABC News/Washington post survey of Consumer Comfort, consumers are happier than they've been in about three years: the Consumer Comfort index stormed higher to close the week of October 29 at -3. That expansive happiness didn't seem to infect those surveyed by the Conference Board during October, as their reading of Consumer Confidence mostly held steady, sporting a reading of 105.4, about the same as September.
Businesswise, while the ISM manufacturing survey was weaker, the ISM series which follows service-related industries noted a pickup in activity, with the ISM services index climbing to 57.1 in October from 52.9 in September. September's reading was a pretty substantial plummet from August, and the October number recovered all of that decline. As with the manufacturing series, input prices reflected here were on the downside, as well.
It's not unusual for bond and stock markets to get caught leaning the wrong way, but this week was a little unusual. Yields finished the week just a little above where they began, but it's a reasonable expectation that investors are at least a little chagrined for the moment. Hard bets that the economy is heading to free fall keep being dashed, and wagers on a more-docile Fed seem likely to suffer the same fate for at least a while longer. The period of slow growth necessary to fully overwhelm inflation pressures which took several years to build has been with us for only perhaps a quarter, and we are likely to see several more with weak growth but still-tough inflation ahead. Until that weak growth serves to trim payrolls back to produce some human "resource slack" the Fed does remain "in play" to increase rates.
Not next week, though. It's election week, when all manner of confusing messages about the economy will be blathered forth. Next week's a considerably quieter week in terms of new data, but like the ISM service numbers above, will probably see mortgage rates take back all of this week's decline, so we'll probably end up back near 6.5% as a result.
Get out and vote!
Rates wended their way down this week in a fairly steady fashion, as each piece of soft economic data seemed to make it more likely that the next Fed move would be to cut interest rates amid a slowing economy. The low point for yields came Wednesday, when the benchmark 10-year Treasury hit 4.57% on news that the Institute for Supply Management (ISM) missed meeting expectations by a fair margin. The ISM index tracks manufacturing activity and denotes a reading of 50 as the breakeven level, so it was little wonder that the markets took notice that October's ISM index fell to 51.2 for the month, the lowest since June 2003. One bright spot in the report was that for the first time in quite a while, the number of companies reporting lower input prices was greater than those reporting higher input prices. While we know that many commodity costs have eased off their highs, this suggests that steady-to-lower inflation has begun to work its way into the production stream.
This should be good news; according to Economics 101, easing growth lowers demand for resources and lower demand for resources cools price pressures, at least for commodities and energy costs. Easing growth should also serve to lower demand for labor, a different kind of resource, but commodities and human capital demands don't necessarily have arcs which start at the same time or progress in the same way. The Fed has expressed concerns about "resource utilization" which obviously includes human capital, and news this week suggests that they should remain concerned.
For example, one question is whether the arc of prior inflation is working its way into wages. It is, according to the quarterly Employment Cost Index, at least to the largest degree since the second quarter of 2004. The ECI for 3Q06 rose by 1.0%, a little above expectations, with the complete cost of having an employee on the books pressed higher by benefit costs. The ECI has risen by 3.3% over the past year; while still mild by most measurements, the direction continues upward.
Buttressing concerns over labor growth and costs was the monthly Employment Report for November. The 92,000 new hires were a little weaker than forecasts, but since layoffs have been slow, hiring should be expected to be as well. However, the markets were unprepared for sizable revisions to both September and, especially, to August payroll growth. September was revised up to 148,000 new hires, which August was pushed up to 230,000. Both revisions point to a much healthier job market than was originally reported, as witness that the nation's unemployment rate slipped to 4.4% -- the lowest reading since 2001. Perhaps hiring is weak not because the economy is weak, but because there are few qualified people available to hire? This would also dovetail nicely with the muted levels of layoffs; it stands to reason that you won't fire someone unless you believe that can replace them.
Layoffs are low, according to the latest Challenger, Gray and Christmas survey which found only 69,177 workers slated to lose their jobs in workforce reductions announced in October. That's down from 100,315 in September, and comparable with the lowest levels of the year. However, during the week ending October 28, there was a slight uptick in applications for new unemployment benefits, with 327,000 new filings, up from 309,000 the week before. Some of those filings are probably related to the fall in homebuilding activity. Construction Spending of all types fell by 0.3% in September, but spending for residential projects fell by 1.1% and has now been posting negative numbers for six months.
There's nothing economically wrong with a strong employment base, provided there are at least some offsets for higher wage and benefit costs. Provided worker productivity is rising, workers can be paid more in wages and benefits without businesses needing to raise prices of goods and services in order to afford them. That said, all-important productivity growth vanished in the third quarter of 2006, where no gain was reported; forecasts hoped for an increase in productivity to 1.3% for the period. The cost of labor per unit produced rose by 3.8% for the quarter, somewhat above the hoped-for level. Less productive workers and rising labor costs are not what the Fed has been hoping to see as they work to contain not only inflation today, but expectations of inflation in the near and not-so-near future. It is because labor costs remain an issue that additional rate increases by the Fed cannot yet be ruled out.
Wage growth helped to move Personal Income growth higher by 0.5% in September, up from August's 0.4% lift. Spending, though, rose by just 0.1% for the month, and the combination of the two helped move the nation's savings rate to -0.2% -- the closest to zero it has been all year. The inflation component of the report revealed a 'core' Personal Consumption Expenditure (PCE) index of 2.4% for the month, still above the range believed to be the Fed's preferred mark.
Having a job amid falling gasoline costs is a recipe for a sunny mood, and according to the weekly ABC News/Washington post survey of Consumer Comfort, consumers are happier than they've been in about three years: the Consumer Comfort index stormed higher to close the week of October 29 at -3. That expansive happiness didn't seem to infect those surveyed by the Conference Board during October, as their reading of Consumer Confidence mostly held steady, sporting a reading of 105.4, about the same as September.
Businesswise, while the ISM manufacturing survey was weaker, the ISM series which follows service-related industries noted a pickup in activity, with the ISM services index climbing to 57.1 in October from 52.9 in September. September's reading was a pretty substantial plummet from August, and the October number recovered all of that decline. As with the manufacturing series, input prices reflected here were on the downside, as well.
It's not unusual for bond and stock markets to get caught leaning the wrong way, but this week was a little unusual. Yields finished the week just a little above where they began, but it's a reasonable expectation that investors are at least a little chagrined for the moment. Hard bets that the economy is heading to free fall keep being dashed, and wagers on a more-docile Fed seem likely to suffer the same fate for at least a while longer. The period of slow growth necessary to fully overwhelm inflation pressures which took several years to build has been with us for only perhaps a quarter, and we are likely to see several more with weak growth but still-tough inflation ahead. Until that weak growth serves to trim payrolls back to produce some human "resource slack" the Fed does remain "in play" to increase rates.
Not next week, though. It's election week, when all manner of confusing messages about the economy will be blathered forth. Next week's a considerably quieter week in terms of new data, but like the ISM service numbers above, will probably see mortgage rates take back all of this week's decline, so we'll probably end up back near 6.5% as a result.
Get out and vote!
Quarter Disorder
Fixed mortgage interest rates barely budged this week as the average 30-year fixed-rate mortgage (FRM) increased by two basis points to close the nation's leading survey of mortgage prices at 6.50%. Five-one Hybrid ARMs also moved up by two basis points, finishing the week at 6.29%.
As expected, the Federal Reserve left interest rates untouched at the close of Wednesday's meeting of the Open Market Committee. The Federal Funds and Discount Rates remained unchanged for the third consecutive meeting, and -- provided the economy holds near present levels -- the Fed may be done moving interest rates for 2006. While the vote to hold rates steady found a majority, there was again a lone dissent among the voting Fed governors. Although the statement which accompanies the end of the affair can reveal some of the Fed's thoughts, this particular memo didn't shed any new light, but did have a notable omission or two.
Concerns about inflation pressures related to energy and commodities prices were absent, but the Fed reiterated that "high levels of resource utilization" could still contribute to price pressures going forward. This presumably refers to the high levels of employment the economy is enjoying at the moment, and the potential for a rise in wage pressures.
New to the October statement was an outlook for growth. While "economic growth has slowed over the course of the year," said the Fed, "going forward, the economy seems likely to expand at a moderate pace." Previous statements about the economy lacked a forecast, so perhaps the Fed is trying to keep the market from expecting a sharper slowdown which could presage a Fed aggressively cutting rates sometime soon. That doesn't appear to be likely at the moment.
Economic growth is notably slower, too. The "advance" estimate for Gross Domestic Product in the third quarter of 2006 came in at a paltry 1.6%, well below forecasts and a fair drop from the second quarter's moderate 2.6% clip. It appears that the hard slump in homebuilding and related activity trimmed about a full percentage point from the growth tally, but there has been at least some pickup in activity in the early fourth quarter. New Home Sales were 5.3% higher in September than in August, ringing in at 1.075 million annualized units sold, and inventory levels of unsold homes continue to move lower. There are only 6.4 months of inventory available at the present sales pace, down from 7.2 months in July and 6.8 in August. Those homes were moved at a discount, though, as selling prices declined by 8% in September when compared to August, and now stand about 10% below year-ago levels. While the housing rout is probably far from over, small steps in the right direction are encouraging.
Also contained in the GDP report were reflections of inflation for the period. The slower growth and decline in energy costs over the July-September period is starting to have a beneficial effect on price pressures. While there are several measures of prices found in the report, the Fed's favorite is thought to be the 'core' Personal Consumption Expenditures (PCE) index, which edged down to 2.3% during the quarter from 2.7% in the second. 'Core' typically reveals costs exclusive of energy, food and volatile components and is thought to be more indicative of the true level of inflation. Regardless of the measure, though, inflation seems to be easing toward the Fed's comfort zone.
While new homes can be priced to move, existing homes suffer from different market conditions. Unlike new homes, it's harder for a homeowner to cut prices since the underlying mortgage and sales costs must be paid, and adding in premiums and such is more challenging and expensive for a potential home seller. Because prices are more intractable, existing home sales continue to slow, slipping by 1.9% during September and landing at a 6.19 million annualized rate of sale. Prices have only fallen about 2% below year-ago levels, and there was actually a slight uptick from August to September. Inventory levels here remain plentiful, too, with 7.3 months of stock available at present sales levels, the same as seen in each of the last four months.
Economically, this week's news paints a mixed picture. Local manufacturing surveys conducted by the Kansas City and Richmond Federal Reserve Banks in their respective districts were a bit at odds. The Richmond Fed noted a distinct softening of activity in their region, with their gauge falling to a reading of -2 in October from a +9 in September. In Kansas City, though, a minor uptick in business was seen, and their indicator rose to +9 in October from +6 in September.
Manufacturing in at least some districts should have kicked higher, as orders for Durable Goods -- items intended to last three years or longer -- jumped by 7.8% during September, largely due to orders for planes and other transportation-related items. Excluding those, there was just a 0.1% lift on spending on durable goods, with most of that boost coming from business investment.
A bigger survey of economic activity conducted by the Chicago Federal Reserve which reveals national trends in growth pointed to slower growth for the third consecutive month. The National Activity Index decreased to -0.51 in September and suggests that the economy grew more slowly than its 'potential' during the month, and posits that the trend for growth is a bit on the weak side at the moment.
The Fed's mention of "high levels of resource utilization" has been reflected in the trends for weekly jobless claims. While hiring has been in a muted pattern for months as the economy has held near what is considered to be "full employment", layoffs have been steady as well. During the week ending October 21, 308,000 new applications for unemployment insurance benefits were filed, still wobbling within a well-defined range which began in late spring/early summer. The employment report covering October is due out next Friday, but if the level of "help wanted" advertising found by the Conference Board is any indication, muted levels of hiring and a steady unemployment rate are the most likely outcome.
Along with steady employment, a rising stock market and falling oil and gasoline costs continue to put a smile on consumer faces. The University of Michigan survey of Consumer Sentiment rose a stout 8.2 points in October, rising to a pre-hurricane Katrina level of 93.6 for the month. On a higher-frequency note, the weekly ABC News/Washington Post poll of Consumer Comfort held at a year's high of -7 during the week of October 22. However, a topping of the stock market and steadying gas prices suggest that optimism may have peaked for the moment.
The steady Fed and slower growth had a reasonable effect on bond markets this week, as market interest rates largely declined. Mortgage rates will follow, as yields have moved a sufficient amount as to drag rates down with them. The 10-year Treasury yield (a fair proxy for fixed-rate mortgages) declined better than an eighth-percentage point between Tuesday and Friday, so rates should head lower as we turn into next week. There are a few indicators aside from the employment report which could spook investors from Halloween though week's end: The Employment Cost Index may show spiking wages, productivity and per-unit labor costs may have turned in a poor showing during the last month, manufacturing or service business may be beginning to kick higher. If the economy really is picking up after the third quarter's 1.6%, now's the time it will start to show.
Mortgage rates should be a bit lower next week, but at least some uncertainty related to the above keeps it a modest move downward of a handful of basis points, at best. It's too soon for even weak numbers to tilt the Fed's hand in favor of an easing, so the downside remains limited.
As expected, the Federal Reserve left interest rates untouched at the close of Wednesday's meeting of the Open Market Committee. The Federal Funds and Discount Rates remained unchanged for the third consecutive meeting, and -- provided the economy holds near present levels -- the Fed may be done moving interest rates for 2006. While the vote to hold rates steady found a majority, there was again a lone dissent among the voting Fed governors. Although the statement which accompanies the end of the affair can reveal some of the Fed's thoughts, this particular memo didn't shed any new light, but did have a notable omission or two.
Concerns about inflation pressures related to energy and commodities prices were absent, but the Fed reiterated that "high levels of resource utilization" could still contribute to price pressures going forward. This presumably refers to the high levels of employment the economy is enjoying at the moment, and the potential for a rise in wage pressures.
New to the October statement was an outlook for growth. While "economic growth has slowed over the course of the year," said the Fed, "going forward, the economy seems likely to expand at a moderate pace." Previous statements about the economy lacked a forecast, so perhaps the Fed is trying to keep the market from expecting a sharper slowdown which could presage a Fed aggressively cutting rates sometime soon. That doesn't appear to be likely at the moment.
Economic growth is notably slower, too. The "advance" estimate for Gross Domestic Product in the third quarter of 2006 came in at a paltry 1.6%, well below forecasts and a fair drop from the second quarter's moderate 2.6% clip. It appears that the hard slump in homebuilding and related activity trimmed about a full percentage point from the growth tally, but there has been at least some pickup in activity in the early fourth quarter. New Home Sales were 5.3% higher in September than in August, ringing in at 1.075 million annualized units sold, and inventory levels of unsold homes continue to move lower. There are only 6.4 months of inventory available at the present sales pace, down from 7.2 months in July and 6.8 in August. Those homes were moved at a discount, though, as selling prices declined by 8% in September when compared to August, and now stand about 10% below year-ago levels. While the housing rout is probably far from over, small steps in the right direction are encouraging.
Also contained in the GDP report were reflections of inflation for the period. The slower growth and decline in energy costs over the July-September period is starting to have a beneficial effect on price pressures. While there are several measures of prices found in the report, the Fed's favorite is thought to be the 'core' Personal Consumption Expenditures (PCE) index, which edged down to 2.3% during the quarter from 2.7% in the second. 'Core' typically reveals costs exclusive of energy, food and volatile components and is thought to be more indicative of the true level of inflation. Regardless of the measure, though, inflation seems to be easing toward the Fed's comfort zone.
While new homes can be priced to move, existing homes suffer from different market conditions. Unlike new homes, it's harder for a homeowner to cut prices since the underlying mortgage and sales costs must be paid, and adding in premiums and such is more challenging and expensive for a potential home seller. Because prices are more intractable, existing home sales continue to slow, slipping by 1.9% during September and landing at a 6.19 million annualized rate of sale. Prices have only fallen about 2% below year-ago levels, and there was actually a slight uptick from August to September. Inventory levels here remain plentiful, too, with 7.3 months of stock available at present sales levels, the same as seen in each of the last four months.
Economically, this week's news paints a mixed picture. Local manufacturing surveys conducted by the Kansas City and Richmond Federal Reserve Banks in their respective districts were a bit at odds. The Richmond Fed noted a distinct softening of activity in their region, with their gauge falling to a reading of -2 in October from a +9 in September. In Kansas City, though, a minor uptick in business was seen, and their indicator rose to +9 in October from +6 in September.
Manufacturing in at least some districts should have kicked higher, as orders for Durable Goods -- items intended to last three years or longer -- jumped by 7.8% during September, largely due to orders for planes and other transportation-related items. Excluding those, there was just a 0.1% lift on spending on durable goods, with most of that boost coming from business investment.
A bigger survey of economic activity conducted by the Chicago Federal Reserve which reveals national trends in growth pointed to slower growth for the third consecutive month. The National Activity Index decreased to -0.51 in September and suggests that the economy grew more slowly than its 'potential' during the month, and posits that the trend for growth is a bit on the weak side at the moment.
The Fed's mention of "high levels of resource utilization" has been reflected in the trends for weekly jobless claims. While hiring has been in a muted pattern for months as the economy has held near what is considered to be "full employment", layoffs have been steady as well. During the week ending October 21, 308,000 new applications for unemployment insurance benefits were filed, still wobbling within a well-defined range which began in late spring/early summer. The employment report covering October is due out next Friday, but if the level of "help wanted" advertising found by the Conference Board is any indication, muted levels of hiring and a steady unemployment rate are the most likely outcome.
Along with steady employment, a rising stock market and falling oil and gasoline costs continue to put a smile on consumer faces. The University of Michigan survey of Consumer Sentiment rose a stout 8.2 points in October, rising to a pre-hurricane Katrina level of 93.6 for the month. On a higher-frequency note, the weekly ABC News/Washington Post poll of Consumer Comfort held at a year's high of -7 during the week of October 22. However, a topping of the stock market and steadying gas prices suggest that optimism may have peaked for the moment.
The steady Fed and slower growth had a reasonable effect on bond markets this week, as market interest rates largely declined. Mortgage rates will follow, as yields have moved a sufficient amount as to drag rates down with them. The 10-year Treasury yield (a fair proxy for fixed-rate mortgages) declined better than an eighth-percentage point between Tuesday and Friday, so rates should head lower as we turn into next week. There are a few indicators aside from the employment report which could spook investors from Halloween though week's end: The Employment Cost Index may show spiking wages, productivity and per-unit labor costs may have turned in a poor showing during the last month, manufacturing or service business may be beginning to kick higher. If the economy really is picking up after the third quarter's 1.6%, now's the time it will start to show.
Mortgage rates should be a bit lower next week, but at least some uncertainty related to the above keeps it a modest move downward of a handful of basis points, at best. It's too soon for even weak numbers to tilt the Fed's hand in favor of an easing, so the downside remains limited.
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