Idaho Snake River Section of the AACE (Association for the Advancement of Cost Engineering)

October 16, 2013

EASTERN IDAHO HOUSING MARKET REPORT

Presented by

Brett Magleby, REALTOR® Keller Williams Realty East Idaho

3525 Merlin Dr Idaho Falls, Idaho 83404

mag@kw.com 208-520-2000

MY GOALS – IN 25-30 MINUTES…

• HOW IS OUR “LOCAL” REAL ESTATE MARKET?

• BUYER’S VS. SELLER’S MARKET?

• WHAT FACTORS AFFECT OUR MARKET?

• THE GOVERNMENT SHUTDOWN

• WHAT NUMBERS DRIVE REAL ESTATE IN OUR AREA?

• PROJECTIONS FOR THE FUTURE

• ANSWER YOUR QUESTIONS

MY ASSUMPTION… WHO AM I TALKING TO? POSSIBLE TRAITS . . .

• C Type Personalities – {DISC Personality Profiles}

• Surrounded by Orderliness

• Environment is Clean, Neat and Organized

• Ruled by Logic, Not Emotions

• Not Swayed by Enthusiasm and Personality

• Cautious, Critical Thinking, Consistent, Compliant, Systematic

• Attention to detail for sake of Efficiency

• Likes routines and Fears Criticism

• Very Analytical and are Systematic and Fact Finders

HOW IS OUR MARKET? • All Real Estate is LOCAL

- National Appreciation Rate Versus East Idaho’s

• It’s improving but has a long road of recovery

• It’s a “Price War and Beauty Contest”

• Less Homeowner’s are underwater in their homes NOW than they were a year or two ago

• Conclusion… It’s a GREAT time to BUY!!!

BUYERS OR SELLERS MARKET??? • By Definition…

- When Supply Exceeds Demand…Buyer’s Market

- When Demand Exceeds Supply…Seller’s Market

• Some Indicators…

- Absorption Rate – 6 Months of Inventory is Balanced

- Inventory Level – Graph Later

- Negotiating % of List Price VS. Sales Price

- Days on Market Shrinking or Growing

WHAT FACTORS ARE AFFECTING OUR MARKET?

THE GOVERNMENT SHUTDOWN AND ITS PLAY ON HOUSING

The government shutdown is causing a flurry of anxiety throughout the nation, and worry is accumulating throughout the housing industry. Despite a small fall cool down due to rising interest rates, the rebound was still moving forward with momentum, and industry experts now fear that the shutdown could stall and potentially derail the progress of housing. However, is the actual problem the shutdown, or the fear that it is creating?

“It’s mostly fear-based,” says Lawrence Yun, Chief Economist for the National Association of REALTORS. “During the first week of shut down, there was no sizable impact,” he continues.

However, the gears may shift if the shutdown drags out. Lenders are delaying mortgage approvals, while still others are flat-out refusing new applications.

Additionally, if interest rates continue rising based on the fear of a debt default, sales may suffer, and anxiety about the state of the economy overall may stall potential buyers from moving forward with their house hunt. If borrowers can’t secure mortgages, sales will slow and prices could plummet.

“With each passing week, the negative impact to housing market will intensify,” Yun says.

- RISMedia, The Leader in Real Estate Information and Real Estate News, October 2013

WHAT NUMBERS DRIVE REAL ESTATE?

1.Home Sales

2.Home Price

3.Inventory

4.Interest Rates

5.Affordability

6.Unemployment

1. HOME SALES

TOTAL UNITS SOLD – BONNEVILLE COUNTY

2. HOME PRICES

AVERAGE SOLD PRICE – BONNEVILLE COUNTY

3. INVENTORY

AVERAGE ACTIVE LISTINGS – BONNEVILLE COUNTY

INVENTORY BY PRICE – BONNEVILLE COUNTY SEPTEMBER

INVENTORY BY PRICE – BONNEVILLE COUNTY SEPTEMBER 2009 – SEPTEMBER 2013

AVERAGE DAYS ON MARKET– BONNEVILLE COUNTY

4. INTEREST RATES

5. AFFORDABILITY

6. UNEMPLOYMENT RATES

DISTRESSED PROPERTY COMPARISON– BONNEVILLE COUNTY

September 2013:

• % of Distressed Properties 7.89%

• % of Closings that were Distressed Properties 13.11%

• July 1, 2013 – September 30, 2013 (Quarter)

• % of Closings that were Distressed Properties 16.21%

EXISTING HOMES - CLOSED SALE ACTIVITY BONNEVILLE COUNTY

EXISTING HOMES - CLOSED SALE ACTIVITY BONNEVILLE COUNTY

EXISTING HOMES - CLOSED SALE ACTIVITY BONNEVILLE COUNTY

NEW CONSTRUCTION- CLOSED SALE ACTIVITY BONNEVILLE COUNTY

NEW CONSTRUCTION- CLOSED SALE ACTIVITY BONNEVILLE COUNTY