Park Place Blog

                I have recently received a couple fines from the Home Owners Associations in the Boise area that have frustrated me, not only because it is a fine but because of the nature of the offence the consequence is attempting to remedy. The fines and warnings have been for lights in the front yard not being turned on all night long. This is just crazy to me. In a time when energy conservation is at the forefront, there are Homeowners Associations issuing fines upwards of $500 for a light not burning. Now we all understand why Homeowners Associations exist and the part they play in keeping property values high. I just feel there needs to be some updated thinking about some of these rules. I would hate to know the amount of energy and money that is simply wasted in this country simply because in some areas you get fined for turning your lights off. So if you have any pull within a Homeowner Association in your area or in the Boise area, think about possibly updating this portion of the CC&R’s to help ensure a higher quality future for all of us.

For this blog I thought I would share a little about our Jobs as Property Managers. Generally people refer to Property Management as a difficult position that takes up a lot of time. In lots of ways this is true, but I am not sure people understand why. Property Management like many professions is a balance of people, money and goods. I think what separates this from other jobs is how personal the area within a person’s life we operate, their home.

                A person’s home may be the most personal thing about them, I mean if you cannot be yourself in your own dwelling, where can you be? Property Managers have to be the ones that inquire into that aspect, making sure you are making your payments and bothering you about inspections, telling you if you are not mowing your lawn well enough or keeping your house clean enough or if you need to pay utility bills that have come past due. To tell you the truth some people are not very good at any of that and they hear from us a lot. I think that everybody would like to own their own home, but that is not a reality for many people and I feel that also has an effect on their attitude towards our position. It is not all bad however many tenants pay on time and are pleasant to deal with and to those, we all thank you!

                The other half of property management is the owner side. Owners/investors of rental property are similar to anyone who invests in the stock market or other area money is spent in hopes that a profit will be realized. The difference is that these people have chosen to put their money in a more tangible asset with a human element involved. In a way it is safer because there is land and a structure that does hold some value no matter what. On the other hand a house can be difficult to stay ahead on especially in this market of dropping prices. The other difficulty is finding tenants that will take care of a rental property and pay rent in a timely manner. The last two points are mainly where a property manager comes in. There is not a lot a Property Manager can do about rental pricing. Finding an appropriate tenant however, one can have an influence. We do our absolute best to find suitable tenants for all of our rental properties. Most of the time we succeed in this attempt, sometimes however even if someone looks good on paper the reality can be quite different. Also people who have paid their bills their entire life can lose jobs and within a month or two be struggling to make ends meet. We get the privilege of juggling communication, payments, personalities, and preferences in one hand while in the other dealing with a volatile market and foreclosing homes. It is quite a task.

                At the end of the day we understand the weight of this task we embark on daily. On the tenant side we manage a person’s home. On the owner side we are managing retirements, college educations for children and sometimes entire salaries. We manage enough assets to make any Broker jealous and take pride in figuring out the best solution to the complex problems that arise here on a daily basis. Your property remains our priority whether you are renting or investing.

“It was the best of time, it was the worst of times, it was the age of wisdom, it was the age of foolishness” a quote from Charles Dickens novel a ‘Tale of two cities’ seems appropriate for the Boise, Idaho real estate market.  The anxiety and suffering in what is being called the ‘Great Recession’ is all to real and painful to the tens of thousands of Boise, Idaho residents whose lives have forever changed with job losses, housing foreclosures, reduced wages, and minimized benefits. Many real estate agents were caught up in the ‘tidal wave’ of the rising market as real estate schools popped up on every corner to graduate real estate agents faster than they could say “flip that house”. But as the ‘wave’ receded it turned into a ‘rip tide’ and many real estate agents have fallen victim to the economic ills that plague America.  Those remaining Treasure Valley agents including those practicing real estate in not only Boise but Meridian, Nampa, Caldwell, Star, and Eagle are constantly barraged with negativity from their client’s disappointment over negative equity in their homes or the lengthy time to close escrow.  The real estate agents who are able to withstand these tumultuous times are growing fewer by the month.  With over 6,000 agents at the peak in the Fall of  2006 that number has dropped almost in half to 3,000 agents by December 2009.

      As Boise, Idaho real estate hovers at what many experts predict as the bottom of the market the time is perfect to become a real estate agent and/or increase your real estate investment portfolio.  Boise short sales and Boise foreclosures blanket the market of properties for sale.  Estimated yearly single family residential sales of approximately 8,000 units are far from anemic.  First time home buyers, investors and upper end buyers are scavenging Boise, Meridian, Nampa, Caldwell and surrounding areas for unbelievable prices on homes.  Throw in tax incentives and low interest rates and it is obvious that it is a great time to invest in or have a career in real estate.  As difficult as it seems from many perspectives it really is the ‘best of times’ for real estate investors.

Spring is nearing and call volume for people seeking properties seems to be ramping up by the day as we move once again towards the busy season for property management. Our largest issue at the moment seems to be that we do not have enough vacant properties of certain types to put people in, if that can even be considered a problem. If you currently have a property and you are considering the possibility of renting it out now is the time. We have a tenant for you. This is a welcomed trend after a slow December and January. This is not uncommon during the holiday season it is just nice when call volume rebounds again houses start going off the rental market seemingly as fast as they go on it. Even though it is February the Treasure Valley rental market is heating up, here is to a successful 2010!

Evictions and Skipping have become a bit more prevalent this past year than all of us would like to see. Skipping is when tenants leave a residence without paying rent or giving notice and I am sure everybody understands eviction. In the past three months 1/3 of the vacancies that we have, are a result of skipping and evictions. I feel some of this comes simply due to the time of the year with Christmas tapping out many families’ savings; also it always seems that the New Year brings a few more people just leaving after the holidays. One other factor is that winter is a slow time for many jobs and this seems to be the most financially taxing season for many people. One bright side to this is that tax season is upon us and many tenants are able to catch up or get ahead with refund checks. We had quite a few owners see the benefit of Eviction Protection a program that Park Place offers to alleviate the high cost of eviction. If you are not on this program and would like to be let us know.     

A word has started to surface in the rental world as of late and that word is, “stabilize”. It seems that in late 2009 and now the beginning of 2010 rents and occupancy rates have begun to stabilize. Rental rates while not at the level many of us would like, have seemed to plain off in the 3^rd and 4^th quarters of 2009. This is more than likely due to the housing sales market starting to stabilize as well, since these to markets are in many ways, linked. Park Place has seen a vacancy rate in the 2% to 3% range while the valley average during the 3^rd quarter of 2009 was around 7% not bad considering all the turmoil in the housing market. It has been quite a ride in unfortunately the wrong direction for much of 2008 and 2009, hopefully 2010 can be the year that things turn around and start heading in a more positive direction in the months to come.

After surging 10% in October, sales of existing homes jumped again in November, growing 7.4% compared with October to an annualized rate of 6.54 million units, according to the National Association of Realtors.

"This clearly is a rush of first-time buyers not wanting to miss out on the tax credit," said NAR's chief economist, Lawrence Yun.

November was originally going to be the last month in which sales to first-time homebuyers would qualify for a federal tax credit of up to $8,000. However, that deadline was extended and expanded, and buyers now have through June to purchase homes.

The strength of sales in November surprised the industry. A panel of experts compiled by Briefing.com had forecast month-over-month sales growth of just 2.5% to 6.25 million from 6.1 million a month earlier.

The sales total was a also huge improvement over a year ago. Sales rose 45.7% over the paltry annualized rate of 4.49 million units during November 2008.

The contribution made by first-time buyers is evident in a separate survey NAR conducted of its members. They estimate that 51% of sales in November were by newcomers to the market, up a point from 50% in October. Normally, first timers account for about 40% of sales.

Also propelling sales higher were rock-bottom interest rates. The average for a 30-year, fixed-rate loan during the month was just 4.88%, down from 4.95% in October and 6.09% a year ago.

With rates that much lower, homebuyers can save more than $150 a month on a $200,000 mortgage.

Winter Renting

                         Cold weather has reached the Treasure Valley for the winter. With that come the issues that arise from freezing temperatures, most prevalently snow and freezing pipes. We had a long string of cold days that I think everyone is glad to see go, but in its wake was a plethora of frozen pipe issues. For those owners and tenants with affected properties know that you are not alone. There are a few things that can be done during this time period to prevent any issues they include.

·         Keeping the heat at least 55 degrees or higher

·         Keep your garage closed  at all times

·         Close the vents in the foundation of the home

·         Keep sidewalks and driveways clear of snow as to not incur an HOA fine

If heater and water issues do arise fill out a maintenance request order online and the will be handled as first priority. Thank you for the help during the winter months and Happy Holidays from all of us here at Park Place.