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Entries 1-9 of 9
Tuesday, March 25, 2008

Please don’t let me spoil a good cathartic experience for you. If you are certain the sky will fall, then by all means wear a helmet and turn elsewhere for confirmation. I enjoy amateur economics, you know, basic stuff like supply and demand. In my job, we study the real estate market in the Treasure Valleyand have been closely monitoring residential inventory since 2006 after the unfathomable sales year of 2005. At this point, you probably know there is an extreme excess supply of residential lots and, in my opinion, a much more reasonable supply of finished home inventory. I would argue that the market has been correcting itself for some time and we have made considerable progress toward equilibrium.  

One way to evaluate the trend of finished residential inventory supply is to study the change in inventory by month from one year to another. Because we live in Idaho, winter both impedes the construction process and the buying process. During the holiday period, people are otherwise focused to think about buying a home and builders know this and try to stage inventory appropriately. The real estate business is seasonal and so viewing year over year data using analysis on a month by month basis is appropriate. Figure 1 measures these variances[i]. In June of 2006, the supply of units began to outpace that of the prior year. The peak of the variance was in September of 2006 with 4,601 more housing units available than in September of 2005. Since then, this variance has steadily decreased to December 2007 where we had 471 more units than the prior year. This trend, derived from fewer home starts and a reasonable level of sales, indicates that the excess finished home inventory is eroding.   

Sales trend measurement is one method of gauging the demand for housing. We experienced extraordinary record sales in 2005 that spawned the large inventory in subsequent periods and we may not reach those sales levels for a few more years. However, we can study the change in sales volume numbers for the market to help us understand the direction of the market. Figure 2 is a three-month rolling average of the year over year sales variance measured in number of residential closings[ii]. In October of 2005 our number of closings began to slow until they fell below the prior years figures in August in 2006. Closings in 2006 were well below the levels of 2005, but 2005 was a fantastically, and unrealistic, robust period. Since June of 2007, we are trending back toward growth. This is in part due to the more realistic comparison to 2006.    
We have established that the inventory levels are correcting nicely and the number of closings is trending back toward a more normal level but if you are a buyer, you probably want to know how far prices might fall in this excess supply environment. The parts of the country particularly hard hit by falling prices are where there have been extreme levels of appreciation over the last several periods. The question then becomes how much appreciation did we experience and what has the reversal been since then?
The following table (Figure 3) uses the 3 month rolling average and compares the average home closing price, in both Ada and Canyon Counties[iii]. It is interesting that both counties’ average sales prices have come back down to the average established in June of 2006. This implies that today you can purchase a home in the Treasure Valley for about what you would have paid 20 months ago. Coincidently that is the time that closings fell to below the prior years 3 month average (see Figure 2).  If you look closely at the trend lines in Figure 3, you will see that both the Canyon County and Ada County average closing price attempted to rally back up again last summer. You could argue that there is a ‘floor’ developing, which would imply the average home closing price may very well start up again soon. 
One other variable worth studying is the foreclosure rate in the area because foreclosures will add to our already large inventory pool of finished homes. Goodness knows we have been inundated with bad news about the impending catastrophe. Much of that data we see in the media is collected by national entities that collect information on foreclosures and merely count every document filed as a foreclosure. Sometimes property owners salvage the property from foreclosure for a time and then fall back again into foreclosure. The result of this data collection technique is that instead of measuring the number of foreclosures it measures the number of filings. The following chart (Figure 4) was obtained from the Federal Deposit Insurance Corporation (FDIC); it gauges actual property foreclosures in the state of Idaho, not the number of filings[iv].  
This indicates to me that our situation in Idaho is rolling within the range of the last few years and that we are in much better condition than the nation as a whole. The next graph (Figure 5), again supplied by the FDIC demonstrates the delinquency and charge-off rate for Idaho compared with the nation5. The Idaho rates have been rising but within an historic margin of variance. 
If you are a prospective home buyer and you think that foreclosures will add significantly to the supply of inventory I would argue that the likelihood of that is remote. History has shown that national recessions drive people to our productive, beautiful surroundings and quality life style. If you were unemployed and/or tired of bigger city crime, smog and alienation where would you look to live? Perhaps in a city with mountains, clean water and an unemployment rate of less that 3%. 
I submit that the fundamentals of our real estate market are correcting and by waiting to purchase you may see the home prices rise. The facts are that the excess supply of finished residential inventory is eroding. Lot inventory notwithstanding, the number of home closings is accelerating and prices appear to be ready to stabilize. When you add to these facts mortgage interest rates in the 6 % range it seems like an excellent time to buy. 
By David R. Player
Dave Player has been in the banking and commercial finance industry for 30 years. He graduated Magna Cum Laude from the Business School of the University of Utah with a degree in Economics. He is responsible for commercial lending in southern Idaho and Northern Utah, and a Senior Vice President at Mountain West Bank.

[i] Jere Webb, [], “Webb Charts”, January 2005-January 2008.
[ii] John L Scott Real Estate, [], “Monthly Market Survey”, 10 Jan 2008.
[iii] Jere Webb, [], “Webb Charts”, January 2005-January 2008
[iv] FDIC Regional Economic Conditions, Federal Deposit Insurance Corporation, 21 Jan 2008.
5 FDIC Regional Economic Conditions, Federal Deposit Insurance Corporation, 21 Jan 2008.


Posted by Jenna Englund at 3/25/2008 10:00:00 PM
Tuesday, March 11, 2008

Gradual Recovery Through Spring

Boise, ID: Home sales statistics for February show that 360 Single Family Homes sold in Ada County according to figures released by the Intermountain MLS and reported by the Ada County Association of REALTORS®.

According to the National Association of REALTORS® Lawrence Yun, NAR chief economist said many buyers have been waiting for higher mortgage loan limits. "The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions," he said. "Therefore, a notable rise in home sales can be anticipated in the second half of the year."

"Buyer activity is continuing to grow," said ACAR President Dan Hernandez. "February sales are up 16% compared to last month. Sellers are coming back gauging the temperature of the market and getting ready for the spring."

Median home prices for existing homes slipped 5.54% as sellers continued to adjust expectations downward due to sluggish sales. "A median price of $196,000 means that more Treasure Valley families will be able to achieve the dream of homeownership," said Hernandez.

The number of days that it took to sell a home dropped from 74 last month to 66 in February.

"Our Ada County market is still fundamentally strong," said Hernandez. "The national attention to short sales and foreclosures suggests that a significant number, if not the majority of homes for sale are in foreclosures. Nothing could be farther from the truth."

The Ada County Association of REALTORS ® (ACAR) is the business advocate for real estate professionals in Ada County. ACAR represents more than 4,000 REALTORS® active in all phases of real estate brokerage, management, development and appraisal. 

Posted by Jenna Englund at 3/11/2008 7:48:00 PM
Tuesday, February 26, 2008

Best States for Jobs
Anthony Balderrama, writer

Location is everything, according to the real estate adage. Many people learn the wisdom of these words after they move into their first apartment on a tight budget and have a view of a landfill and the smells that come from it.

The same holds true for job hunting. Your chances of finding the right job – or any job, really – depend on where you live. The unemployment rate is the ratio of job seekers to the working population. Therefore, a low percentage means few people are having any difficulty finding work.If you’re looking for a job, you want to be in a state that has an unemployment rate lower than the national average, which is 5 percent according to the most recent data from the Bureau of Labor Statistics (BLS).
Here are the 15 best states to find work ranked by their unemployment rates.

1. South Dakota
Unemployment rate: 3 percent*
Population: 796,214**
Mean annual wage: $30,460
Top industry: Trade, transportation and utilities (19.9 percent)***
2. Idaho
Unemployment rate: 3 percent
Population: 1,499,402
Mean annual wage: $34,810
Top industry: Trade, transportation and utilities (20.2 percent)
3. Wyoming
Unemployment rate: 3.1 percent
Population: 522,830
Mean annual wage: $34,290
Top industry: Government (23 percent)
4. Nebraska
Unemployment rate: 3.2 percent
Population: 1,774,571
Mean annual wage: $34,300
Top industry: Trade, transportation and utilities (21.1 percent)
5. Utah
Unemployment rate: 3.2 percent
Population: 2,645,330
Mean annual wage: $35,540
Top industry: Trade, transportation and utilities (19.7 percent)
6. Hawaii
Unemployment rate: 3.2 percent
Population: 1,283,388
Mean annual wage: $38,630
Top industry: Government (19.6 percent)
7. North Dakota
Unemployment rate: 3.3 percent
Population: 639,715
Mean annual wage: $32,440
Top industry: Trade, transportation and utilities (21.4 percent)
8. Virginia
Unemployment rate: 3.5 percent
Population: 7,712,091
Mean annual wage: $41,450
Top industry: Government (18 percent)
9. Montana
Unemployment rate: 3.6 percent
Population: 957,861
Mean annual wage: $31,290
Top industry: Trade, transportation and utilities (20.5 percent)
10. New Hampshire
Unemployment rate: 3.6 percent
Population: 1,315,828
Mean annual wage: $39,250
Top industry: Trade, transportation and utilities (23.3 percent)
11. New Mexico
Unemployment rate: 3.7 percent
Population: 1,969,915
Mean annual wage: $33,980
Top industry: Government (23.2 percent)
12. Delaware
Unemployment rate: 3.8 percent
Population: 864,764
Mean annual wage: $41,680
Top industry: Trade, transportation and utilities (18.7 percent)
13. Maryland
Unemployment rate: 3.8 percent
Population: 5,618,344
Mean annual wage: $44,030
Top industry: Government (18.2 percent)
14. Iowa
Unemployment rate: 4 percent
Population: 2,988,046
Mean annual wage: $33,250
Top industry: Trade, transportation and utilities (20.4 percent)
15. Vermont
Unemployment rate: 4 percent
Population: 621,254
Mean annual wage: $36,350
Top industry: Trade, transportation and utilities (19.4 percent)
*Unemployment rates, mean annual wages and industry percentages obtained from BLS in January 2008. Percentages based on nonfarm payrolls, seasonally adjusted.
**Population figures based on U.S. Census Bureau data.
***Top industries are those that employ the largest percentage of a state’s labor force.
Anthony Balderrama is a writer and blogger for He researches and writes about job search strategy, career management, hiring trends and workplace issues.
Last Updated: Friday, February 22, 2008 - 1:54 PM
Posted by Jenna Englund at 2/26/2008 9:04:00 PM
Monday, February 25, 2008

Here's an article from Time Magazine, February 25, 2008 titled "Ignore the Headlines"...

Famed Money Manager is perhaps best known for his timeless wisdom that you can beat the pros by focusing on stocks of companies where you either work or shop or have some other edge. But a more relevant Lynchism today is this gem: Ignore the headlines.

That's no easy thing. How do you tune out all the chatter and ink on recession, housing, subprime woes, the credit crunch, rogue traders, insolvent bond insurers, $100 oil and nukes in Iran? It's enough to make you sit on your thumbs and wait before making any big moves. But what, exactly, are you waiting for?

There has rarely been a moment in history when you couldn't scare yourself into doing nothing. And yet, as Lynch observed nearly 20 years ago, "in spite of all the great and minor calamities that have occurred ... all the thousands of reasons that the world might be coming to an end--owning stocks has continued to be twice as rewarding as owning bonds."

A top reason to not buy stocks, in Lynch's view, is if you don't already own a home--in which case, that should be your first investment, since an owner-occupied home is nearly always profitable. Through a spokesman, Lynch reaffirmed these views to me--housing debacle and all.

When prices are falling, few people have the discipline to buy stocks, a house, gold, art or any other asset. But those who do pull the trigger excel in the long run. As John D. Rockefeller famously said, "The way to make money is to buy when blood is running in the streets."

And the streets are stained crimson. Start with stocks. They have been pummeled this year. GDP braked sharply last quarter, and there has been plenty of panic about a recession. The Federal Reserve is slashing short-term interest rates at the fastest clip in decades. But if you stick to your steady, diversified plan while everyone else is retreating, you will be happy years from now. For one thing, Fed rate cuts always lift the economy eventually, and the stock market typically starts responding just as headlines get gloomiest. Sure, the market could fall again before recovering. But the recession may be half over already--or we may avoid one altogether. You just never know.

As for housing, certainly some skepticism is in order. Formerly sizzling markets in Florida, Nevada, Arizona and California probably haven't seen the worst headlines just yet, though they may well be close. And "jumbo" mortgages, those more than $417,000, are likely to remain artificially high for a few more months while banks work through their credit issues.

But let's say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It's time to get serious--before an inevitable rise in interest rates wipes out your advantage. "The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher," says Jim Svinth, chief economist at mortgage firm Lending Tree. So anything you gain by a further drop in prices might be offset by rising financing costs.

Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today's rate of 5.5%. Monthly principal and interest come to $994.31. Let's say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you'd have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you'd rather not be.

It's more complicated if you must sell before you can buy. But that logjam won't persist forever--and if it appears you'll be trapped for a few years, try to refinance at today's lower rates. Risks always seem most acute when the headlines give you ulcers. But that's exactly when you should think long term--and get off your thumbs.

[This article contains a table. Please see hardcopy of magazine.],9171,1713483,00.html 


Posted by Jenna Englund at 2/25/2008 9:05:00 PM
Friday, January 25, 2008

KTVB Story
In 2007, home sales across the Treasure Valley dropped 33 percent from 2006.
Marc Lebowitz with the Ada County Association of Realtors says the figure should be taken with a grain of salt.

The Ada County Association of Realtors claims although numbers are down from last year - it was still an average year in home sales. Homes sale numbers across the area were the 5th best ever. "2005 and 2006 spiked higher than anything we have ever seen," he said.

Lebowitz says 2007 turned into a year of opportunity for the first time home buyers across the area. "The sales of homes in the $160,000 to $300,000 mark in December of 2007 were 30% greater than in July of 2007...where everything else is trending downward that is trending up."

Another changing trend in 2007 - Lebowitz says fewer investors purchased homes.

"People buying homes in 2007 bought them to live in they wanted to make this there home, this is a great place to have a family," he said.

As for 2008, Lebowitz says with interest rates at an all time low, spring will be a good time for people looking to buy a home.

"We continue to see the inventory decrease and we continue to see sellers becoming more realistic so I think it continues to be a strong market for buyers," he said.

As for sellers - Lebowitz offers this advice.
"Listen to your realtor, be realistic," he said. "Understand your priorities and motivations if you need to sell quickly then you are going to need to be flexible."

The Ada County Association of Realtors says in 2007 the average home sat on the market for 56 days.

In 2005 and 2006 the average was about 30 days.

But in 2003 and 2004 homes averaged 75 days on the market.

Lebowitz adds over the past five years, on average the value of homes in the Valley have increased by about ten percent each year.

He says the exception was from 2006 to 2007, when he says the area saw a decrease of less than two percent.

Posted by Jenna Englund at 1/25/2008 5:33:00 PM

I just saw an Oprah rerun last week. I talked about the importance of “going green”. If everyone left their receipt instead of tearing it off, it would leave a big pile of mess long enough to wrap around the earth in just one day...I was stunned by the impact of something seemingly so small.

I learned this Monday that John L. Scott has a vision and mission to evolve into a more eco-friendly company. We have committed to focusing our efforts on digital campaigns and moving towards excluding the waste that results from hardcopy...or print advertising This will not happen overnight, but it is exciting to know that the company that has taken such great care of me for the last 7 years in my career, is also taking an active approach to take ownership of the Earth.

Posted by Jenna Englund at 1/25/2008 4:20:00 PM
Thursday, December 6, 2007
I am excited to be able to participate in the upcoming Builder Christmas Light Tour. It begins just after Thanksgiving Nov 24th- Jan 2nd. Homes will be light up every evening between (sunset) 5-9:30pm. You can find more info at Some builders are also opening up their homes to collect donations for Toys for Tots and food for the Idaho Food bank. I encourage you to come out and enjoy the spectacular lights, on the even more spectacular new homes in Crossfield (on Ustick just west of Meridian), and Cedar Edge (on Lake Hazel just west of Maple Grove). The builders are required to have extensive lighting in order to be a part of this event. The homes and landscaping will be decked along with the halls. Since it is a contest, every builder will be making their best effort to dazzle the public.  It will be the highlight of your Christmas evening drives if you take the time to drive through these communities. 
Posted by Jenna Englund at 12/6/2007 10:09:00 PM
By Nora Kormylo

Wow. What a wonderful experience it was to participate in the volunteer work during the extreme makeover in Middleton this past July. The episode aired on Dec. 2nd on ABC 6pm. I was amazed at the number of volunteers that showed up. I was working at the check in both 4 evening shifts from 10pm to 6am, and a couple of days. It was really hot, July in Boise. I asked a DJ at the media check in if he could ask everyone on the air to bring more ice, sunscreen and bug spray. WOW…. Hoards of people came immediately to drop off supplies we requested and more. It is so refreshing to see people rally around and help others. The pay for volunteering is significant. A heart filled with joy. I hope you got to see the episode this past Sunday. I was there the one in the blue shirt.
Posted by Jenna Englund at 12/6/2007 10:03:00 PM
Monday, November 19, 2007
Your home is an investment towards your future. It may seem like a monthly mortgage higher than your current rent check is too uncomfortable. A couple of things to remember before you wait any longer. Part of your monthly mortgage goes towards building up equity in your home, you can borrow against this in the future. You can write off your interest expense against your income. This is the biggest tax write-off available to most Americans. Your mortgage remains steady, if you have a fixed rate and you don’t refinance and use all the equity. Rents rise, often yearly. You will have more spending money for your retirement years if your home is paid off. In the future (15-20 years, your housing expenses will be lower than someone who rents. Leverage is used mot powerfully in Real Estate than anywhere else in the investment world. For $20k, a homeowner can (conceivably and given the right conditions) secure a $400k investment. That $400k could make a 10% gain in two years or less, netting the investor (borrower) $40k on their loan, a 200% return. Why continue to rent? There are still 100% financing programs available. You should buy yourself an early Christmas gift this year. There are deals available right now that will not be here next year. See OPPORTUNITY TIME link.
(information extracted from Home Buyers Guide and Document Organizer by Alex A. Lluch)
Posted by Jenna Englund at 11/19/2007 7:22:00 PM
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