What is happening with home inventory in the Treasure Valley??? Thom is here to keep you up to date and informed! He will also fill you in on the details of some of our newest listings and upcoming open houses. Ron from Eagle Home Mortgage joins in to talk about future interest rate changes…
Have you ever wondered what info you have to disclose when you are selling your home? Thom and Dave go over some of the big items that the potential buyers need to be aware of.
Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman, the co-owner and of course the associate broker at Core Group at eXp Realty. Another week and a couple of new listings for you is coming up.
Thom Dallman: Yeah, we do. We have a couple listings that have come on. As we all know, I like to talk about them a little bit ... a little bit on the radio and kind of share with people. That's one of the benefits of this radio, is to kind of share what we have out there and what the market is doing, and give information and all that fun stuff.
Dave Burnett: I guess maybe I should clarify. Are these coming soon or are these listed now?
Thom Dallman: Well, they are both actually listed. One of them was a coming soon this week, but it's now actually an active listing and is available to view. As a matter of fact, let's talk about that one first. It's 11056 West Tidewater Court in Boise, in the 83713 zip code. This is a three bedroom, two bath, single level. 1424 square feet. They're doing an open house on it from 11 to 2.
Dave Burnett: Oh, nice!
Thom Dallman: If you're out and about, you'll be able to drive by and check this one out. Yeah, like I said, this is a three bedroom, two bath, single level. Split floor design. We love those split floor designs. For those that are not in the know, that means that the master bedroom is usually on one side of the house, and then the other two bedrooms are on the other.
Dave Burnett: Which gives you that privacy.
Thom Dallman: It gives you that separation and privacy for the people who get to stay in the master. This one has a really nice backyard, with a covered patio. Great for entertaining and stuff. It has a fireplace, so you can cozy up to the fireplace in the winter and relax when it's cold outside. It's on a .14 acre of a lot, so a smaller lot. Not a lot of maintenance, easy to take care of.
Dave Burnett: I like that.
Thom Dallman: I know, right? Me too. It's right over there by Fairview and Wildwood Way, so close to the Crossroads Village, all that shopping.
Dave Burnett: Right. Right.
Thom Dallman: Close to Meridian. 1400 square foot, great price at $220,000, for the Boise area that's getting harder and harder to find anything under $250,000.
Dave Burnett: That's a great price.
Thom Dallman: Yeah. Great little home to check out. If you happen to be in the area, don't forget to swing by and see it while it's having the open house going on.
Dave Burnett: What is that address again, if somebody wants to drop it in their GPS to get to it?
Thom Dallman: Sure. It's 11056 West Tidewater Court.
Dave Burnett: Okay.
Thom Dallman: In Boise, 83713.
Dave Burnett: Kind of funny, when I first moved to the Boise area back in the 1980s, we bought a place out of area.
Thom Dallman: Okay.
Dave Burnett: Which is not too far from where this is at.
Thom Dallman: Not at all.
Dave Burnett: It's in West Boise. Somebody said, what are you buying way out there for? It's like, no, that's right in the middle of it right now. If you're at Tidewater, you're able to go over ... You've got Kleiner Park nearby, all that shopping in Meridian. It's not way out there anymore. It's right in the middle.
Thom Dallman: It's not, there's so much stuff out that way. Yeah, when I first bought a house in Idaho back in 2003, it was over at Mitchell and Fairview.
Dave Burnett: Oh, okay.
Thom Dallman: Kind of that same general area. It was super convenient. It was super convenient to downtown, to get over to the Crossroads section where a lot of shopping is and stuff. A lot of little parks all around there and all the little subdivisions and stuff. We'd always go exploring all the different little parks and see what they had and stuff, so it was a great little ... it's a great area over there in West Boise.
Dave Burnett: It really is. Like we said, not only close to everything, I think I just saw this past week where the city of Meridian has approved the new Costco building permit.
Thom Dallman: Oh yeah, did they?
Dave Burnett: Meridian is going to get a new Costco.
Thom Dallman: I haven't seen that. I just saw that they turned down the school, though.
Dave Burnett: Yeah, they want that reworked.
Thom Dallman: Yeah, exactly.
Dave Burnett: They're going to redo that one. It is a growing area and lots to do, and lots of shopping in that area if you're looking for that.
Thom Dallman: Oh, for sure.
Dave Burnett: What else you got?
Thom Dallman: The second one that I've got is over in Nampa. This one's at 2406 East Ohio Avenue, in Nampa. This is a three bedroom, two and a half bath, two story house. 1600 square feet. This one's listed at $225,000, so once again great price point for a lot of square footage. It's got a three bedroom, but it's got a bonus room above the garage as well that you can use however you want. It's fully fenced, great backyard. They've got a great garden in there. The current owner has shown me lots of picture of his hall of ingredients for salsa. He really likes salsa.
Dave Burnett: Oh, nice.
Thom Dallman: Anyways, yeah. Great garden spot, it's a great opportunity there. Also has RV parking. We always talk about the convenience of having RV parking with electrical hookup to it as well. There's a mudroom. Let's see, a pantry, half bath on the main floor. Just a great space for anybody. It's located right there off of Greenhurst and King's Avenue, I believe it is, which is once again convenient to just go down Greenhurst and you get onto 12th Avenue and you have all the shopping up and down 12th Avenue in Nampa. All that's available there.
Dave Burnett: Not too far off the freeway, if you work in Boise. You can just jump onto the freeway, and into town you go.
Thom Dallman: Correct. Correct, yeah. Just jump up Kings Avenue and jump right and to the freeway and you're there. This one's listed at $225,000, once again. Three bedroom, two and a half bath, two story, 1680 square foot. It's located at 2406 East Ohio Avenue and is available for sale right now.
Dave Burnett: I do want to mention, if you're interested in these properties ... I mean there was a time and a day and age where you had to call and see these. If you want to get online at CoreGroupRealty.com and check these out, they're available to look at the pictures and all of the information on them.
Thom Dallman: Yeah. You got to featured listings, it should be showing up there. If it's not, give me a call.
Dave Burnett: Yeah.
Thom Dallman: With the changeover with eXp we've had some issues with our website down, but I think we've got them all fixed up.
Dave Burnett: Excellent.
Thom Dallman: It should be on featured listings. If not, just go to the ... There's a home search button there, that can take you to our home search site. You can pull up all the listings available out there. It's updated every 15 minutes, so you have the most current information, the most current active homes that are available. One of the worst things is to ... One of the things that we have to deal with is getting those people that call us from other websites and say, "Oh, I want to check out this house." We're like, "Oh, that one actually went pending this morning, it's not available anymore."
Dave Burnett: Yeah, sorry.
Thom Dallman: "Well, it shows active on this other website." We're like, "Yeah, there's a lot of websites out there that only update once a day in the morning, or every 12 hours." Ours is updated every 15 minutes to ensure that people are getting the most accurate, active houses.
Dave Burnett: One other thing I want to encourage other people to do, and that is, if you're looking for a home or know somebody who is, you can go to Core Group at eXp's Facebook site and follow that.
Thom Dallman: Yeah.
Dave Burnett: I'm going to be real honest. If you're not looking for a home, if you're not interested, perhaps it's not what you want to do. But if you're looking for a home, that way you kind of update ... I always like it because you'll see featured homes and different things going on that suddenly pop up and it's like, "Wow, look at that." Nice pictures on there. You might want to go to Facebook and friend or follow Core Group on eXp on Facebook.
Thom Dallman: Yeah, please do. We're always posting new and interesting information on there as well as connecting this to our blog sites, so that when we do blogs ... We introduce our new agents when we bring new agents on. All kinds of just great information there. All fun with real estate. We'll have occasion fun little posts in there that make you kind of laugh a little. Just everything. Please, do check us out.
Dave Burnett: Mind you, I am not an employee of Core Group, so I can say this and get away with this. You know what, another thing I like about the Facebook, you're not inundated. There are times when you are inundated by somebody. Core Group, you'll find a post here and there off and on. It doesn't inundate you. That just drives me crazy when suddenly you're getting shoe ads nonstop, or information. Stop, already.
Thom Dallman: Right.
Dave Burnett: It is, it's a nice thing to do. If you're looking for a home, it's a great way to keep up to date on the listings and what's going on with the agents that are at Core Group. As always, you can go to CoreGroupRealty.com and find out more information, find out everything you need to know if you want to ... You find that home and you want to make contact, you can do it through that, as well as calling 208-933-7777. This is the Idaho Real Estate Buzz, being brought to you in part by the folks at Eagle Home Mortgage, and of course, Core Group at eXp Realty. Call them! 208-933-7777. Find out why they say you get more with Core.
Dave Burnett: This is the Idaho Real Estate Buzz. Thom Dallman, the CEO and one of the associate brokers at Core Group at eXp. As we get to do every week, we get a chance to talk to Ron Wieczorek with Eagle Home Mortgage, equal opportunity lender. And we wanna talk about something that, okay, the topic, the title of it's kind of vague, but you're going to get specific on home affordability.
Ron Wieczorek: Right.
Dave Burnett: What does that mean?
Ron Wieczorek: Well, it's kind of funny that during the break, Thom asked me what I was gonna talk about, or you asked me what I was going to talk about, and I said, "Home affordability." And right in front of Thom, on his computer was, on the top of his tongue was.
Thom Dallman: Yeah.
Ron Wieczorek: Go ahead.
Thom Dallman: What does this number mean here on this National Association of Realtors housing affordability index?
Ron Wieczorek: It's scary that you're starting to read the same articles that I am. That's not good for you Thom. So-
Dave Burnett: You both need to get a life. …reading these articles.
Ron Wieczorek: I don't know what else I'd be good at.
Dave Burnett: Good point there Ron.
Ron Wieczorek: Thank you. So home affordability and nationwide and the list that Thom has is specific to Boise and I'll get into that. But nationwide it hit a decade low. Home affordability hit a decade low, which is not good. It means homes are less affordable nationwide than they've been since 2008. And in the show previous we've talked about how those numbers are shaking out, how homes are rising and prices, how interest rates are rising, and the effect that has and that's kinda circling back to what I'm gonna talk about today.
Now nationwide, 30% of our population is living in markets that require an annual income of $100,000 ...
Dave Burnett: Or more.
Ron Wieczorek: Or more, to buy a home. And that, like I said, is the lowest affordability rates since the quarter three of 2008.
Dave Burnett: And I think when we talked about that we were talking about San Jose, San Francisco, New York, areas where, Seattle, where just flat expensive to own a home.
Ron Wieczorek: Right. And again a lot of those are relative, 'cause $100,000 here means different than $100,000 does in San Jose. You're not paying your bills with $100,000 in San Jose. And how they calculate those numbers, the home affordability numbers, is, and I kinda touched on it with you a few minutes ago Thom is it's the percentage of income that is needed to buy a median priced home relative to historical averages.
So that's where you get those numbers that are over under 100. If you have an index that is above 100, it indicates that home prices are more affordable than the historic average. So if you looked at Boise and what was it for most recent?
Thom Dallman: Well this was for national. This isn't Boise. I was trying to find Boise's numbers, but nationally for the month of August we were at 141.2.
Ron Wieczorek: Okay.
Dave Burnett: And what does that mean, 141?
Ron Wieczorek: Well if it's above 100 and I'd have to look at that chart a little more, but the index, if it's above 100 that means that home prices are more affordable than historic average.
Dave Burnett: Okay.
Ron Wieczorek: And what I saw was that in quarter, we'll go back to quarter three of 2017 just to kinda give us a barometer of where we're going, nationwide, we were at 102. So we were a little more affordable nationwide than we were historically. Now we get into quarter two of this year and we were at 95. So that means nationwide it's become less affordable. And quarter three it was at 92. And that's what we draw off.
Quarter three of 2008 we just dipped below that or right at that 92 number. And they analyze 440 counties that has a population of about 220 million people as opposed to the U.S. population which is 327 million. So they took a good sample size of populated areas. And what has caused that is we talked about the prices of homes going up, we talked about the mortgage interest rates rising, and that's had the biggest effect probably on those numbers that's made it less affordable nationwide.
And I keep going back to this nationwide because I wanna get to what it means for the treasure valley.
Dave Burnett: Okay.
Ron Wieczorek: And what it means to the treasure valley is that the U.S. census has a lot of reports and a lot of data, and one of the things they track is net migration data. And the U.S. census shows a negative net migration in more than two thirds of those highest priced markets.
Dave Burnett: So people are leaving?
Thom Dallman: People are leaving.
Ron Wieczorek: People are leaving with that number, that 92 number is not representative of what's happening in Boise and what's happening in the treasure valley. It is still, and it's hard to tell somebody that lives in Boise and has lived in Boise that it's still very affordable to live in Boise-
Dave Burnett: If you've lived here and you're isolated here, you think that traffic is horrible, you think it's expensive to live, you think it's expensive to buy a home, but all you have to do is travel to any other-
Ron Wieczorek: Cities-
Dave Burnett: And you realize we got it pretty good.
Ron Wieczorek: We do, we do. And we're starting to see that net migration. We're starting to see those folks that have realized and experienced a lot of that pain. So two thirds of those highest priced markets thirsting to net migration number that's negative. While more than three quarters of the markets that have, that require less than $100,000 income to buy a home, are all seeing a positive net migration.
And that's where the treasure valley is. We're still well, well under $100,000 median income to buy an average priced home, which means we're seeing that net migration number go up. That's not the only reason. Last week we talked about millennials and where they're looking and what's important to them. And there was three factors that I kind of highlighted. One was culture amenities, one was economic growth, and the third one was relative affordability.
So that ties us all back into it's a major data point, it's a major reason that we're seeing a lot of this migration coming to the treasure valley as opposed to we talked about the other people that are coming, but that's a big one. It's millennials coming in, it's a lot of people that are seeing that Boise is still affordable, it's still very desirable. And that's why I always, I've been on that train of even though we're cooling off a little bit in the treasure valley, nationwide they're cooling off a lot.
Dave Burnett: Yeah. Let me ask you this question though. If millennials are coming here and buying, if it's retirees it's one thing. They're going, "What a nice place to live. Low crime, low cost to housing," but if you're a millennial, you have to have some sort of employment. Are businesses and companies moving here or people creating work? What's happening?
Ron Wieczorek: We're seeing a lot of economic growth. We're seeing, and it's two fold. Not only is it that businesses in the valley are maybe growing or being created, we're seeing a lot of work from home environments. So if you live in some of those area that have those higher percentages or higher median income to buy a home and they say, "You don't have to be on site every day. You can work from home if you want to," and they take advantage of those options so they flood markets like ours that are desirable.
And to your point Dave, it's not just millennials. I'm highlighting them a little because they're our biggest buyers. The retirees sometimes, they might help Thom because they're buying a house, but for me, most of them are coming with cash. They're living off pensions, retirement, and they're bringing them in from other states. So we're getting that a lot too.
Thom Dallman: Selling houses in other areas and moving here-
Ron Wieczorek: Right.
Thom Dallman: To buy something smaller?
Ron Wieczorek: Exactly. Cashing out some of that equity. So that's what we're seeing a lot with that migration activity and I just wanted to kinda highlight, I've been talking about millennials a lot over the past couple weeks and what's driving them. And I've mentioned those factors and that factor I wanted to really highlight that relative affordability 'cause what does that mean. You can say relative affordability, but that doesn't mean anything unless you have numbers to back it up.
Dave Burnett: Here's another, I've got a lot of questions here I'm trying to make sure I get it all to fit into the segment here. What does that mean for where we're going? Does that mean that down the road Boise is now going to be one of those unaffordable places to live? What happens? Get your crystal ball out. It's broke.
Thom Dallman: It never quite always works.
Ron Wieczorek: No, no it didn't, but I think, I personally think that the value's gonna continue to grow. I don't think it's gonna grow at a pace that we've seen over the past couple years. I think there's been a lot of unrest and a lot of political factors that has driven some of our growth. I do see us becoming ... We hear a lot, and a lot of murmurings around my friends who don't live in Boise and family members hear a lot about Boise becoming more, it's all right, we already have a tech presence.
And we keep hearing more and more about more tech presence. And I think that's what you're gonna see in the valley is that it's not gonna be San Jose. It's not gonna be Silicon Valley. But I think it's going to, our presence is gonna be on the radar of, because of all those things that the desirability. So I do think that we're gonna be insulated from a lot of, we talked about cooling off, I don't wanna mix it up with a bubble bursting, but I think we're gonna be insulated from a lot of that.
If some areas are starting to decline heavily, we see the heaviest inventory in those markets that I talked about that have that over the $100,000 or well over $100,000. So I think we're gonna be insulated. Just to kinda give you an examples we pick on California a lot and to buy an average priced home in San Mateo is $377,000.
Dave Burnett: That's average?
Ron Wieczorek: Median priced homes-
Thom Dallman: Crazy.
Ron Wieczorek: $377,000 income to even afford that. And then it's followed by the top five on my list are all California, San Frans $366,000, San Clare is $327,000, Marian is $311,000, and Alameda is $238,000. Those are big numbers. That's annual income needed to buy a home. And we're talking about the valley, which is well under $100,000.
Dave Burnett: Yeah.
Ron Wieczorek: And that's household. So that to me is a big difference. We haven't even scratched the surface of those areas that you're talking about that'll be in trouble.
Thom Dallman: Yeah. I just spoke with a family that's moving up here from Modesto, California because of the fact that combined they just don't make enough money down there to be able to afford a house, but they've been looking up here and they see how affordable the houses are and they're like, "We're moving that way to bring our kids up and get them out of California and we actually can, for the first time in our lives, own a home now. Coming to Boise." So they're super excited. So proved point there.
Ron Wieczorek: Yeah.
Thom Dallman: They can't cut it down there.
Dave Burnett: Amazing.
Ron Wieczorek: It is amazing.
Dave Burnett: Too expensive to live almost.
Ron Wieczorek: Yeah. And we use that tone relative and my mom always gets mad at me. "What does that even mean? Why are you saying relative?" It's not all relative. But it really isn't and to your point Dave, if you're so insulated and you've been here your whole life and all you see now is that it takes maybe twice what it did before to afford a lifestyle, it's really representative of what's going on in the rest of the United States.
It's not just us. And we're well behind that curve of affordability. So we're still, that's why we're still gonna be highly desired as, even though we think it's higher. And it is higher. It's not to the point where other places are and I don't think we'll get there. I mean, there's a lot of factors. You have your coastal cities. Being that we're so landlocked and logistically it's still difficult to get in and out of Boise, is going to deter some of that bigger mentality.
We draw the comparisons to Denver than well why can they do it? And maybe that's down the road 'cause we're often, that's usually our barometer is Denver. What's Denver doing? And that's-
Dave Burnett: You have to remember that Boise is the most urban, remote urban location in America. It is farther to another urban area from Boise than anywhere else in America.
Ron Wieczorek: And I know that just from my oldest son's in travel hockey. And they are, at their age group they're the best of the best in the valley. And they draw from places from McCall, Lewiston, places you wouldn't think they'd draw from just to be on this team. Gotta find competition, we gotta drive, we gotta fly, we have to go to Vegas, we gotta go to Salt Lake, we gotta go Seattle.
Dave Burnett: You get five and half, six hours of a drive just to get to another urban area.
Ron Wieczorek: Exactly. And when I lived on the East coast for my whole upbringing, if we had a tournament and we drove two hours, "Oh, we're going two hours." Back up the car, get the snacks, make sure you go bathroom, everything. And you just hit city after city after city in a two hour frame. Here, no sir.
Dave Burnett: Yeah. We're still in the middle of nowhere. Ron, if somebody wants to get a hold of you, Eagle Home Mortgage, how do they do it?
Ron Wieczorek: Call my cell phone. It's always on me. It's 208-869-9154.
Dave Burnett: And of course Eagle Home Mortgage one of the sponsors of the Idaho Real Estate Buzz along with the folks at Core Group at eXp. Why don't you go to their website, CoreGroupRealty.com is the website to go to or call 208-933-7777. Find out why they say you get more with Core.
Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman. He, of course, co-owner and the associative broker at Core Group at EXP Realty. We get together each and every weekend to talk about all things real estate. Not just the homes that are for sale, but you know, kind of the trends that are happening around the Treasure Valley. Do you have the latest numbers that are out now?
Thom Dallman: Yeah, we just got the latest statistics from the Boise Regional Realtors on September's sales, which actually, well as soon as I saw them, I was like, "Wow, this is something that we really need to talk about."
Dave Burnett: Okay.
Thom Dallman: Because everybody's talking about the slow down, the bubble, the plateau of the market and stuff like that. And I think September really was evident of that, if you will. Comparing it to August's sales, and even going back to the beginning of the year as far as different things. Just starting out with the median home price at the beginning of the year, the median home price was around that 290 price point. In August our median price point in Ada County was $334,000, so you can see that quite a big jump over this year. Prices go up.
Well in September the median price actually dropped down to $318,000.
Dave Burnett: Came down a little bit.
Thom Dallman: Quite a bit, substantial drop in median prices. Our sales dropped quite a bit too though. We went from 1100 sales in August to 869 sales in September.
Dave Burnett: Almost 300 homes.
Thom Dallman: And that's just for... Yeah almost 300 homes less in September. Typical, there's a seasonal aspect to that. We typically do see that kind of a decrease in September when things are starting to get colder, things kinda slow down a little bit, and everybody's a lot more active in the summertime. But this is a pretty substantial drop in sales. I think those kind of things trigger a little bit of that, oh gosh, is the market crashing? Is this the evidence of a crash? I wouldn't say that. I think that we are way past due for a plateau, if you will, or evening out of the marketplace. And I think that's what we're kinda seeing.
Once again, $318,000 is still substantially higher than the 290's that we were in at the beginning of the year.
Dave Burnett: Is part of it though the fact that interest rates went up by another quarter percent?
Thom Dallman: It could be.
Dave Burnett: Here in the past month or so, and so-
Thom Dallman: It could be, it could be.
Dave Burnett: That does add to the price of a home.
Thom Dallman: Yeah our previous segment we talked about home affordability. As these prices were continuing to go up and our interest rates continue to go up, that home affordability kind of starts to decrease and so forth.
Buyers are having a little bit harder time finding the house that they want and in the price point that they want. They're having to get a little bit smaller house or get a house with not as many amenities and stuff like that.
But this also means that because not only has the median house price dropped a little bit, the days on market has actually increased.
Dave Burnett: That's what I was gonna ask you about because I would think that, that's a real key indicator of things kinda leveling out a bit.
Thom Dallman: Yeah yeah so in August the days on market, average days on market for Ada county was 26 days, and in September it was 30. Just the extra four days of houses being on the market is really leaning towards buyers not having to feel so rushed. If that continues to get longer, that starts to make that shift from the seller’s market that we always talk about being in to where buyers actually have a little bit more leverage. A little bit more time to actually look and not feel that they have to rush in to something.
Dave Burnett: Let me wrap my head around this then. So if I'm looking to sell my home right now, and I go in to Core Group at EXP, you're gonna tell me that you can expect, if it's priced right, you can expect it to be on the market for about a month.
Thom Dallman: Yeah well actually I think that's an average number. From the day the house gets listed to when it gets a contract pending on it. We're still seeing a lot of homes that are selling within a couple days.
Dave Burnett: Okay.
Thom Dallman: If they're priced right. If it's priced right it should sell within a day or two. It's still, you know.
Dave Burnett: It's still... I guess what we're saying it's not that the market's slow, it's just that it's not white hot like it was.
Thom Dallman: Yeah exactly.
Dave Burnett: Okay.
Thom Dallman: Exactly, yeah instead of getting offers within the first day, five offers on the first day, it might be five offers over a weekend. That's the kind of shift that we're seeing is kind of houses are... it's taking a little bit more for the buyers to get the offers in. They have... Inventory actually jumped up as well. I haven't mentioned that yet, but they show that we jumped up from ... we were kind of averaging that 1.2, 1.3 months supply. We're at 1.6 months supply right now.
Inventory actually, this is evident, this is evident obviously of the less sales means that there's more homes available on the market and so-
Dave Burnett: So that really is good news for a buyer, somebody who's decided they want to buy a home. That's some good news there.
Thom Dallman: Yeah, it's once again, making that shift back towards the middle to where it's more of an equal market between the sellers and the buyers and as negotiations can still be there, you can still get a good house, you still have great interest rates. Just have a little bit more options now for the buyers.
Dave Burnett: Are you finding in your personal experience out there with Core Group, that there are areas that are still white hot as opposed to others?
Thom Dallman: Oh yeah, oh yeah, well it's evident in the numbers too between August and September in Canyon County. Canyon County is still one up. In August, the median home price was $220,000, and in September it was $229,000. So they had a decrease in sales from $490,000 to $364,000. But they still had that median home price go up so there's still a lot of demand for homes in Canyon County, because it is affordable, because it's a little bit-
Dave Burnett: Well and there's area to grow.
Thom Dallman: Yeah, exactly.
Dave Burnett: That's a big part of it.
Thom Dallman: There's more rural area out there too. People moving here from the big congested cities are wanting to get out into rural areas where it's a little bit more spread out, and they don't have a neighbor right on 'em. So a lot of people are kinda of gravitating that way, especially considering Middleton. Middleton's considered Canyon County. So lot of people wanna live in Middleton. They love that area, they love that town.
Dave Burnett: Well and we talked about it in the last segment, so I want to talk for a moment to those who are long-time Idaho residents. For somebody who is moving in here from Seattle or from San Francisco, a 30 minute commute is nothing.
Thom Dallman: Nothing. Yeah-
Dave Burnett: Some of us don't like five minutes.
Thom Dallman: I chatted with a gentleman the other day that said his commute time is an hour and 45 minutes one way. So he does an hour and 45 minutes in the morning and an hour and 45 in the evening and I just can't even imagine.
Dave Burnett: I can't either. I guess it's where Podcasts and all that is a big deal when you're commuting.
Thom Dallman: Exactly. I'd have a lot of audio books read or listened to I guess-
Dave Burnett: Really to commute from Middleton into Boise for somebody who’s been commuting an hour, that's nothing.
Thom Dallman: Exactly, exactly. So I kinda wanted to finish off talking a little bit about new construction, 'cause we've always said, with this seller's market, with the low inventory, builders have been so busy. But in September, we were still at 27% of the sales being new construction.
Dave Burnett: And that's high.
Thom Dallman: Yeah, that's high, that's high. We at one point were down. The lowest we got I think in 2010 was 11% or 10%. So we've continuously been up in that 30%, 25 to 30% of sales being new construction which is a high number, which is a lot of homes being built, being moved into and that was because there was nowhere else for people to go. There's no other supply.
I have heard from a couple of builders and part of the BCA, the Builder's Association and in different committees and stuff like that. I've heard the builders saying they're kinda noticing that little bit of a slowdown, and their inventory's being purchased and stuff like that.
So yeah, I think it's once again indicative of the fall, going into fall. We always kinda see that kind of a slowdown, but I think it's still a great time as people are still looking to move here and still looking to downsize. One of the homes that we're talking about getting listed here in the next couple weeks is a family who needs to downsize. Big acreage property and a big house that needs to go down in size, 'cause all the kids have gone off to college and to make families and stuff like that.
Dave Burnett: Well I guess as we talk about slow down, it's a relative term in that slowing down really is probably not necessarily a bad thing. To kind of level out a little bit, let everyone catch their breath and let the market continue on, because it's still really a good time to buy. Interest rates while they have gone up, are still really low.
Thom Dallman: Real historical lows.
Dave Burnett: Compared to what we've seen in years gone by and the valley continues just to grow and it's a good time to come in. Maybe if you've explored the idea of downsizing or maybe you've thought about dipping your toe into buying. I mean, a lot of people were burned in the late 2008 through 2012. So when you talk slow down, it makes people nervous. But really, it's a great time to look at and if somebody wants to come into Core Group, more than happy to sit down and consult with 'em.
Thom Dallman: Yeah, more than happy. We can pull up stats and numbers and show you kind of what's been happening in the marketplace and we can pull up all the active listings and see what's out there and what's available. Kinda see what you're looking for, whether, like you said, you're looking to kinda downsize or whether you are looking to buy your first time home. If you're out there and you just realize, it's a great time to invest in a second home, you know, rental property. There's some great options for that out there right now too.
There's some good listings out there and good activity still to be had.
Dave Burnett: And let me give kind of a plug-in this way too. It is a pleasant experience to come into Core Group. They're on Emerald Street, not far from the Boise Towne Square Mall. You can come and consult. There's a big screen TV. You can pull up listings and view homes. You can view homes sitting right there in your conference room and get a nice view of homes and kinda sort out what you wanna do or what you might wanna do right there-
Thom Dallman: One of my favorite consultations is sitting down and talking to buyers and going through listings on our big screen so that they can really say, "Hey, I like that kinda countertops," or "I like that kinda flooring. Wow, this looks like the perfect kinda of area," and stuff like that. It's a great way.
Dave Burnett: In the convenience of your office and not have to go drive around all over town.
Thom Dallman: Exactly.
Dave Burnett: I like that, I like that a lot. Thom Dallman, if somebody wants to get hold of you, easy to do on the website?
Thom Dallman: Easy to go, CoreGroupRealty.com. There's a Contact Us feature on there so you can reach out to us. We have people standing by pretty much 24/7 to answer that and get a phone call to you or just give us a call at the 208-933-7777 number and someone will be able to help you out.
Dave Burnett: Core Group at EXP, of course, a sponsor of the Idaho Real Estate Buzz along with the folks at Eagle Home Mortgage. While you do this, give Core a call today, 208-933-7777. Find out why they say, "You get more with Core."
Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman the co-owner and one of the, what is your official title? Executive broker.
Thom Dallman: Associate broker.
Dave Burnett: Associate broker.
Thom Dallman: Yes.
Dave Burnett: I'll get it right sooner or later.
Thom Dallman: I like executive broker that kind of sounds fun.
Dave Burnett: Very executive.
Thom Dallman: We'll make up our own term.
Dave Burnett: Well Core Group at eXp, they've been here serving the Treasure Valley, helping you with your homes need whether you're buying or selling, they can take care of both directions out there for you and easy to find. Right there on Emerald right over by the Boise Town Square Mall and even easier yet online at CoreGroupRealty.com.
One of the terms, we like to talk about terms because for you in the real estate business Thom, there are things you talk about all the time and it's just you always talk about it. For those of us who are not in the real estate business some terms may means things maybe we don't really understand those things but one of terms we want to talk about is equity and having equity in your home.
Thom Dallman: Equity. Home equity. Yeah, that's actually a term that comes up quite a bit 'cause we tell sellers all the time, "Let's look at what your equity is in your house at this time."
Dave Burnett: If you're a renter, you have no equity.
Thom Dallman: You have no equity.
Dave Burnett: That's one of the things that you're paying monthly, monthly, monthly while you have commitment in that sense.
Thom Dallman: All those payments that you're making monthly go the equity of the owner of the house.
Dave Burnett: Somebody else.
Thom Dallman: The landlord.
Dave Burnett: One of the advantages of buying a home is that you not only have a place to live but while you're living there, you are building a little nest egg.
Thom Dallman: Yeah, a little nest egg called equity and it's in general terms it's the amount of money that you get to pocket between what you owe with a loan to what the house, it's current value is in the marketplace. Say a house is worth $220,000 and you have a $160,000 loan on the house, that difference between the $160,000 and the $220,000 is going to be equity. What is that? $60,000. That's kind of the concept of equity. It's just the basic difference between what you owe for your loans and liens on the property, to what you can sell it for in today's market. And that's that chunk of change that if you are in an emergency, you have a dire situation, you can sell the house, you can use that money and invest it back in yourself or use it pay off your bills. Use it for retirement.
If you're downsizing, a lot of people will use that equity to purchase a smaller home and stuff like that. There's also options to do a home equity line of credit, commonly referred to as a HELOC where you can pull some that equity out and use it and maybe you'll use it to build more equity by fixing up the house. That's one of the many ways that you can kind of build equity in your home is we talk about remodeling and updating finishings and stuff like that. That's one of the most common ways to build equity and build more value into your home.
Dave Burnett: Is by remodeling a home.
Thom Dallman: Is by remodeling and upgrading.
Dave Burnett: Equity's one of those weird things because it's not like I can look in the bank and say, "Oh look, I've got $6,432 in the bank."
Thom Dallman: Exactly.
Dave Burnett: It's kind of an ambiguous figure that's out there that here is what your home is worth. Not necessarily that you're going to sell it for.
Thom Dallman: Exactly.
Dave Burnett: Here is what it's worth. Let me give a personal example. I'll share this personally. We built home in Eagle years ago, back in 1998 and our construction loan was $96,000 for this home. We not too long ago had the home appraised and redid some stuff on it and it appraises at $320,000.
Thom Dallman: Nice.
Dave Burnett: From $96,000 to $320,000 in less than 20 years. That's a chunk of equity. I don't have that money.
Thom Dallman: That was a great investment. That was a great investment that you bought. You held onto and you grew it. Yeah, you don't have it in your pocket right now.
Dave Burnett: I don't but I have the property and it's equity as I look toward retirement, that's a retirement investment for me.
Thom Dallman: Exactly. And that's exactly the way that people should be looking at it is it's an investment. It is a risk. There's a lot of people who got burnt with that risk back in 2008 but if they could stick with it and stay in their homes, it came back around and we're at a point now where most people who have bought in 2008 through 2012 and the downturn, they have some great equity in their home. Up to half of what they, double of what they paid for the house at that time is what it's worth now. There's a lot of people taking advantage of having that equity in their home and cashing out while we're at this up top of a market again.
Dave Burnett: Other ways, you talked about that remodeling and doing that is a way of building equity. Are there other ways of building equity in your home?
Thom Dallman: Yeah, I usually always tell people and suggest to people when you get your tax returns and or if you get an inheritance, think about applying some of that to your loan. Bringing down your loan is obviously going to give you more equity in your house because it's taking care of that principle and bringing it down. It shortens the term of your loan to do that and as well as gives you that leeway in it. It's investing that money back into your house and putting it into a safe risk, I guess you could think.
Dave Burnett: Inheritance or maybe a year-end bonus or something like that.
Thom Dallman: Think about applying some of that towards your, go to your loan institution and ask them to apply some of that to your loan to bring down that principle and create some more of that equity in your home. They also suggest if you have the ability and you have the financial ability to do it, making double payments. Making two payments a month for a while just to also bring down that loan payment and shorten that loan.
Dave Burnett: It doesn't even have to be double payments. I know on my loan that I have, any, I could put, if I decide to do $25 a month.
Thom Dallman: Any extra.
Dave Burnett: I can do that and while that doesn't sound like much in the big scheme ...
Thom Dallman: If if you think about it, yeah.
Dave Burnett: If you see how much interest you pay versus principle, 25 bucks a month is a decent chunk.
Thom Dallman: Exactly. Exactly. And all you're doing is you're just investing it back into yourself and into the equity in your house. Just letting it appreciate like you. Just let it own it. Keep it for longevity and know that eventually as the market goes up and down, does its roller coaster ride, there are going to be, there are be points where it's going to be at the top at the top of the market. Where it's going to be a good time to cash out and get more money for it. Watching that real estate cycle is a really key factor in owning that home, not selling it too soon is another way to make sure that you're leveraging the equity as much as possible.
Dave Burnett: Let me throw a little bit monkey wrench at you. We didn't discuss this during the break but kind of curious, when you're talking bare land, if you can go buy bare land, is that a decent investment. And mind you, we're not investment brokers. We're not investment advisors, check with yours but bare land. Like say if I were to go up to Cascade or somewhere and buy a lot and sit on that. Is it just in general, over time you're going to make money?
Thom Dallman: I think in general yes. You should be able to make money. Once again, riding that roller coaster of the real estate market and keeping an eye where it is and stuff. Obviously there's no crystal balls to predict, you buy in Cascade, some natural disaster happens in Cascade and pretty it's a ghost town and now your land's not worth anything. There's always that risk and there's no crystal ball that can you what's going to happen but it's the same concept with land as it with buying a house. It's just land in itself isn't as valuable as a land with a house on it. You'll have the equity built in it but not just as much of a percentage. Not as big of an account I guess you could say. There's obviously great benefit to land and depending on how big that land and especially in areas that are growing. Kuna, perfect example of farmers making a lot of money by selling land out in Kuna to developers 'cause Kuna's growing. It's one of the biggest growing parts of the business.
Dave Burnett: Get ahead of the growth pattern and be patient.
Thom Dallman: Yep. Exactly.
Dave Burnett: Is a big part of it.
Thom Dallman: Exactly. That's one of the key factors of looking at a specific area and thinking of the future. Does this seem like a place that people are going to gravitate towards in the future?
Dave Burnett: As we say, there is no crystal ball but if somebody wants to come in and talk with one of the agents at Core Group about what they think is happening with the real estate market, what would be good equity investment? They can always come in and chat with your folks?
Thom Dallman: Oh we're always willing and open to chat about options and different things and take a look at what your ability is to purchase and compare it to what your risk factors are. How long do you want to own it? How long do you want to invest in this property? And stuff like that. Then just take a look and see what's out there and what's available and yeah, we're more than happy to talk about it. Whether it's hey, I'm thinking about being a landlord and renting out a property. What does that look like? We've been doing this a long time. We can tell you what it looks like. I can personally tell you 'cause I've had numerous rentals of my own.
Dave Burnett: Some of the dos and don'ts.
Thom Dallman: Yes.
Dave Burnett: There you go. Equity, it's kind of an ambiguous thing but it is an investment that you can not only have but you can live in as well which is a nice thing to do. If you're thinking about buying a home, go to Core Group Realty at eXp. Easy to find, CoreGroupRealty.com. Call them at 208 933-7777. They of course one of the sponsors of the Idaho Real Estate Buzz along with folks at Eagle Home Mortgage. 208 933-7777. Give them a call and find out why they say, "You get more with Core."