John Paulson made a lot of money while others lost it.  At a net worth of $12.4 billion, he sits at number twenty on the Forbes 400 list.  Now he is predicting the short term future, saying that double digit inflation is coming and it is time to ditch short term bonds for stocks.  All of this is according to a Forbes article reporting on a talk Paulson did in New York a month ago.  He also had some interesting things to say about the real estate market (quote taken from the same article):

“If you don’t own a home buy one,” Paulson recommended; ” if you  own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

I’m not much for predicting the future, and I think that timelines are quite different in local markets, but this got me thinking.  Although activity is down here in Boise, I still track prices for single family homes and multi-family investment properties on a daily basis.  We have nice homes listed for $70 per square foot in Boise and duplexes for under $100k.  In Nampa, you can buy a duplex, triplex or fourplex for around $30k per unit (read: cashflow).  Rents are still pretty steady as more people go from being home owners to renters again.

So is this the best time to buy a home or investment property?  If it isn’t, it’s pretty close.  Close enough that ten years down the road, you won’t notice that you missed the bottom by a few months.  However, if you wait until the bottom is reached, time will no longer be on your side and you will have probably missed it.

Photo Credit: Forbes.com

Probably won’t happen.  The bill that the tax credit extension was attached to failed last Thursday and with the current deadline being set to expire on Wednesday, there seems to be little chance of an extension being passed.  However, the National Association of Realtors is hopeful:

(June 25, 2010)—NAR is working very closely with key Members of Congress and the Senate on a possible extension of the June 30, 2010 deadline for closing contracts eligible for the Homeowner Tax Credit. NAR is pursuing all possible options to determine what other legislation may be available for passing a June 30 extension. Each of the possible options face difficult obstacles, but NAR’s efforts to clear the way are on going. The Senate will not have any votes today, June 25, which will push the Tax Credit Extension deadline to the week of June 28, 2010. In the meantime, those impacted should proceed as if the June 30, 2010 date is binding.

Of course, this current tax credit is an extension of the previous credit which was an extension (and addition) to an even earlier tax credit from 2008.  Nevertheless, there were many people (NAR says around 180,000) that were expecting this credit and won’t be getting it.  So what do buyers in this situation do?  Stick with the current purchase without a tax credit or move on and keep looking (or wait)?

Either way, you won’t be getting $8,000 from the government and if they don’t extend this, they probably won’t do another credit in the future unless shtf (again).  If the only reason you chose the house you are currently purchasing was because of the tax credit (which you shouldn’t have done), you’ll probably want to walk away and rethink your home purchasing decision (consult your agent/lawyer regarding earnest money deposits and other liabilities you may have incurred).  However, if you were looking to purchase a home and the tax credit was just a bonus, you’ll probably be best off sticking with the home you have under contract assuming that it is still a good deal (which most will be).  The added benefit will be if they do extend the credit through September 30, 2010 (the originally proposed date) and you stay under contract and close before then (but after June 30th) you’ll still get the tax credit.  Whereas, if you jumped ship and found a different home, there is no chance you’ll get the credit.

I’ll keep watching the news blips on this and update as I get them.

UPDATE from NAR:

(June 29, 2010)—The United States House of Representatives has just passed HR 5623, the Homebuyer Assistance and Improvement Act of 2010, by a vote of 409-5. This bill extends the deadline for closing tax credit eligible transactions from June 30 to September 30, 2010. The bill moves to the Senate where the outcome is much less certain. NAR will continue to update you as the events move forward.

We’ll see if this gets passed in the Senate or not…

CityBurb is now using Agent Text for our virtual fliers.  On each of our listings, you’ll find a new sign rider that looks like the image above.  When potential buyers text for more information, they will get a text message back giving them the listing details and even linking them to a mobile site that shows interior pictures of the home.  All the benefits of the usual real estate flier box, plus some (and no more empty flier boxes in front of listings).

After a potential buyer gets the information they are looking for, I get a text message as well, allowing me to follow up with that buyer and possibly set up a showing of the home.  Also, there is a web site where I can track how many calls we get on each listing.

Thanks to Agent Zen for the lead.

Some of you might be confused by the new look of our site. The blinding green is gone and the content is very different. What you are seeing is our blog and it is a temporary placeholder as we finish our new site (we’ll always have a blog, it just won’t be the main event).

Since many of you come here to search for Boise homes and real estate in the Treasure Valley, I will forward you on to a service we use (and built) called Client Connect. There you can search for all the active listings in the valley and save the homes and searches that you like. You’ll get automatic email updates when one of those listings has a price change or if a new home matches your criteria.

As for buying, selling and property management questions, we’ll have those sections updated soon.  Otherwise, you can contact us here.

My brother and I have been working on a web app that creates single property websites to better market our listings. It’s still under construction, but if you’ve got some time to kill check it out and let us know what you think.

The Treasury Department released their details today regarding the Homeowner Affordability and Stability Plan.  There are a few different versions of the plan depending on the borrower’s situation.  The abbreviated version is that you need to call your lender to find out about your own personal eligibility.  However, here are some of the basic eligibility requirements (taken directly from the Treasury Department’s summary):

• Loans originated on or before January 1, 2009.
• First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits allowed for owner-occupied properties with 2-4 units.
• All borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs, and most recent tax return, and must sign an affidavit of financial hardship.
• Property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties.
• Incentives to lenders and servicers to modify at risk borrowers who have not yet missed payments when the servicer determines that the borrower is at imminent risk of default.
• Modifications can start from now until December 31, 2012; loans can be modified only once under the program.

To find out if you qualify, you’ll have to call your lender and supply them with your income, debt and asset information.  For more information about the plan itself, check out the following links from the Treasury Department:

• Modification Program Guidlines

• Summary of Guidlines

Photo Credit: woodleywonderworks via Flickr

“The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure.”

Don’t have enough equity to refinance or are you completely upside down in your home loan?  Or has your income changed, keeping you from qualifying for your current loan?  The government is here to help.  At least, that’s the idea.

The new Homeowner Affordability and Stability Plan will help homeowners that don’t currently qualify for standard refinancing options.  This includes people who have less than 20% equity in their home or owe more than their home is worth.  There isn’t much information out about the program yet, but they are planning on releasing more details on March 4th.  For now check out these links or give me a call at 208-631-3545.

• Homeowner Affordability and Stability Plan Fact Sheet
• Consumer Q & A
• White House Blog FAQ

*****UPDATED HERE*****

Did you know that the rate structure for your electricity usage recently changed?  Idaho Power announced last week that their residential rates increased an average of 1.61%.  However, the bigger news is that rates are now tiered and priced by usage.  If you use less than 800 kWh (kilowatt hours) your rates stay at a low 5.58 cents per kWh September through May and 5.78 cents per kWh during the summer months.  However, if you use more than 800 kWh but less than 2,000 kWh they raise to 6.2 cents and 6.59 cents respectively.  If you can hang meat in you home in the summer and bake a cake in there during the winter and use over 2,000 kWh you rates will be much higher – 7.13 cents and 8.17 cents per kWh.

This new structure may help reduce a lot of people’s energy use.  If you are close to one of the tiers, say around 850 kWh, you may start figuring out how to reduce the amount of energy you use in order to take advantage of the lower rates.

Curious about how to lower your energy usage?  Check out the tips below or contact us – we’re EcoBrokers, remember?

1. Set your thermostat down one degree and save two to three percent on your heating or cooling bill, depending on the season.
2. Turn off lights not in use.
3. Participate in an Idaho Power energy efficiency program.
4. Wash full loads of laundry and dishes, and use water and energy-saving settings.
5. Use plug strips for computers and video equipment and shut off when not in use.
6. Buy compact fluorescent light (CFL) bulbs for light fixtures you use more than two hours a day. They use 75 percent less energy!
7. Weather-strip windows and doors.
8. Regularly clean or replace the air filter in your furnace.

The Wall Street Journal is reporting that the $15,000 proposed tax credit was kicked out of the stimulus package in exchange for a an $8,000 tax credit for first-time home buyers that does not require repayment.  The credit will also be extended through the end of August December 1, 2009, but will only be available for those who have not already taken advantage of the $7,500 tax credit.  Remember, that means closing on the home by December 1st, not just deciding to buy by then, so if you’re interested – get on it.

Again, this is not official yet, but I’ll keep you updated.  Find the official press release here.  The IRS has not updated their website yet, but I’ll update this post when they do, so check back.

Photo Credit:  alykat via Flickr

Some of you may have heard about the $7,500 Tax Credit that is being offered to first-time homebuyers.  If you haven’t, I’ll give you a quick rundown:  First-time homebuyers, defined as those people that haven’t owned or bought a home in the last three years, can qualify if they closed on a home between April 8, 2008 and June 30, 2009.  Currently, the credit has to be paid back over fifteen years (starting two years after you file), so it is more like a zero interest loan, but congress is trying to make it a true credit without a payback and they are trying to increase the tax credit to $15,000.

The $15,000 tax credit is not yet a law, but it has passed through the Senate and will most likely be signed off in Obama’s Stimulus Package.  The major updates will include not having to pay back the credit as well as opening it up to anyone buying any home, not just first-time homebuyers.  The time frame of the $15,000 credit will piggyback the current tax credit and may possibly be extended to the end of the year.  So those of you that have already purchased a home may be able to amend your taxes and get your tax credit.  Of course, everyone’s tax situation is different so don’t do your taxes based on this blog.  Instead, talk to an accountant.

I’m following this closely and will keep you updated via this blog, but if you have any questions, please give me a call.

***UPDATED HERE***