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2019 Idaho Real Estate Blog

What Can Change This Market? Main Boise Home Loans
With a record number of listings available for sale in the Treasure Valley, perhaps it is time for homeowners to consider becoming landlords.
 
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A client of mine is in the same boat that many homeowners here in the Treasure Valley are in…they can’t buy their next home until the home they are in sells first. They have a growing family and need to move into a larger house, but are unable so far to sell their current home. The home is priced right, but it is just one of thousands of homes for sale in a saturated market.
 
It’s understandable…who wants to have two mortgage payments at the same time. They feel their only option is to stay put until their home sells. But, what if they decided to rent their current home? Or better yet, if selling their home in the future is still something they want to do, then perhaps a lease-to-buy contract might be the way to go?
 
I did some checking into capital gains tax law. If my clients, who are a married couple, rent their current primary residence home for three years, then they will still be able to sell the house and avoid all of the capital gains tax on income up to $500,000. As long as the home was their primary residence for two years of a five year window dating back from the date they finally sell the home, they can get out of those capital gains taxes.
 
The only drawback is what their new monthly house payment will be without putting significant money down on the new home purchase. By not selling their current home, they will not be able to put down much money. However with rates being very low currently, it is something they are considering. Also, with so many houses for sale, the pickings are great for them right now…and many sellers are willing to negotiate to sell NOW!
 
I asked a local realtor, Jennifur Newhouse with The Newhouse Team, what she thought about the current real estate market, and if it was a good time to buy or not. She said, “I firmly believe that right now is the ideal time to buy a home.  With increased inventory and historically low interest rates, this is the time to find a great deal!  No one has a crystal ball to find out what the future holds and if you wait, you run the risk of interest rate increases and the market picking up, therefore homes and loans end up costing you more money.  Remember, real estate is a long term investment and it will appreciate over time.”
 
Before deciding to convert your current primary residence into a rental property, I highly suggest that you contact and interview several prospective property management companies to assess the current rental climate. Also, consider contacting an accountant or other tax professional to go over the tax scenario with having a rental property and rental income, and the effect that will have on your tax picture. If you would like a referral to an accountant, please call Cordell Chigbrow of Chigbrow, Ryan & Company in Boise at (208) 384-1040. If you would like to visit with Jennifur Newhouse of The Newhouse Team, you can reach her at (208) 321-4000.
 
As for me, if you have any questions regarding a mortgage you might be considering, or if you want more information on this topic, please contact me at (208) 880-0316. You can also find me on the web at http://www.ericsloans.com. Better yet, drop by my office in Nampa, Idaho, and visit me in person!
 
Regards,
 
 
 
Eric Leigh
1419 N. Midland Boulevard
Nampa, ID 83651
(208) 880-0316
eric@ericsloans.com
http://www.ericsloans.com
 
Would you like to be added to my e-mailing list? My monthly e-mailings cover topics ranging from the mortgage market to personal finance to timely market alerts and information. Email me at eric@ericsloans.com and tell me you want to OPT IN to my monthly mailings!
 
Posted by Eric Leigh at 12/10/2007 11:43:00 PM
Comments (7)
Re:What Can Change This Market?
Being a landlord SUCKS!!!!!!!!!!!!!!

Please remember 1% of value = maintenence (that's home price x 1%) minimum if you have good tenants.

Also remember ITS ALWAYS A GOOD TIME TO BUY if your job depends on the commision you get from SELLING A HOUSE!

Check the facts
http://thebubblebuster.com/boise/summary.html
We are well beyond the long-term trends of RE in the valley!

It is a SELLERS MARKET! Why? If you sell today, you will get more money than next year or 09 or probably 2010!
Posted by on 12/11/2007 6:38 AM
Re:What Can Change This Market?
I thought is was a buyers market?

Wait till 4th Quarter 2008 and you will see a huge shift begin to develop. Boise is a desirable place and as soon as other markets rebound those residents will jump ship to move here. A year from now demand will be back.
Posted by on 12/11/2007 7:03 AM
Re:What Can Change This Market?
Emdeplam

"If you sell today, you will get more money than next year or 09 or probably 2010?" Not sure that makes sense for any market anywhere. That statement argues that real estate values will depreciate for three consecutive years? Plus, you make the assumption that a homeowner WILL BE ABLE to sell today...lots of homeowners with their homes listed now for 6-12 months may disagree with you.

I disagree with your entire statement.

Eric Leigh
Posted by on 12/11/2007 8:24 AM
Re:What Can Change This Market?
I thought Blogs were supposed to be where you gave out information not a GIANT billboard to blatently promote your services. Establish credibility and people will seek you out. Keep your phone numbers and what you can do for them to yourself
Posted by on 12/11/2007 9:20 AM
Re:What Can Change This Market?
Eric,

Put some MEAT in your arguement then...

Tell me WHY price to rent ratios will stay elevated thru '10 (currently at 180-210 X price) versus the long-term historical average?

Tell me why The ratio of median income to median housing cost which has been disconnected from its very longterm average is sustainable?

My arguements are simple, we are still far above historical metrics for price. When RE appeciates with inflation over the long run, 20% a year run ups will come back.

Do you have any FACTS or are you just a cheerleader...

Maybe you should include some other lines in your act..
"Housing never goes down"
"Buy now or be priced out forever"
"Renting is throwing money away"
"The Clowniforians are coming"
"The market will turn by (insert 3 month's from todays date)
Posted by on 12/11/2007 10:41 AM
Re:What Can Change This Market?
Haha oh I missed Trey's comments... Boise is a great place....

In other words "It's different here"

Price follows inventory. Inventory is rising so draw your own conclusions
Posted by on 12/11/2007 10:49 AM
Re:What Can Change This Market?
You make some very good points. I am in agreement with you on the market being overpriced.

My blog was simply centered around a unique situation where I know someone who NEEDS to move and can't sell their current home. For them, renting their current home is an option that they are considering. In their situation, it comes down to NEEDS not WANTS. They need to move...they are a family of six with number seven on the way, so they NEED more room. They have been unable to sell their house today, so they are looking at renting it instead.

Not everyone's situation is the same; however, that being said, renting your current home rather than trying to sell MIGHT make sense.

Eric Leigh
Posted by on 12/12/2007 5:39 AM
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