Spring is here, and summer is not far behind. The time to list and/or buy a home is upon us. There are so many questions at this point. How do I choose a Realtor®? Is my credit score high enough to qualify for a loan, and if not, what do I do to fix it? What type of property is right for me (and my family)? What can I afford, still live comfortably and not be house poor? There are so many questions one must ask themselves when following their dream of homeownership. A Realtor® can help, but there are a few things to consider first. None of us enjoy paying someone else’s bills, especially when they are benefitting from our hard work. Is renting really what you want to do? So, decide if homeownership is your next step!
The first thing I would recommend is to keep your credit in order. You can request a free credit report from each credit reporting agency (Equifax, Experian and Trans Union) every 12 months. Review the reports and dispute any errors you may find. I won’t lie and say this is an easy task. It can take time but will be worth it. Pay your bills on time and, if possible, on revolving debt, pay a little extra each month. This will help bring your scores up while taking those balances down even faster, which equates to lower interest payments. If you have little to no credit, did you know that you can add utilities to your profile to improve your scores? Another option is to take the Finally Home class, which is a one-day class for first-time homebuyers that will help you understand the process of becoming a homeowner and can offer credit counseling ideas, as well as suggestions if you have income challenges. These classes are taught at Bonner Community Housing Agency (BonnerHousing.org) and cover everything from financing challenges to the closing of the transaction. Chris Bassett and his team of instructors can be a stepping stone on your journey to homeownership.
Once you have determined if the time is right to start “shopping,” the next and most important component is finding a Realtor®. Why use a Realtor®? The reasons are too many to list, but here are a few important reasons: Local Realtors® are knowledgeable and vested in their community; Realtors® are educated in real estate matters; Realtors® act as your “guide” in any real estate transaction; and Realtors® are bound to a Code of Ethics. Realtors® care about their communities. Whether it is volunteering at a fundraiser, belonging to the hospital board of directors, coaching little league or attending city council meetings, chances are there are more than a few Realtors® in the crowd.
I would suggest interviewing three to five Realtors®. How do you determine which three to five to interview? You may already know a Realtor® or two, or maybe a trusted family member or friend can make a recommendation. Maybe you saw their picture online. Do your research. This person will be working on your behalf, so he or she, or sometimes they, should be a perfect fit for your needs. Becoming a homeowner is truly the biggest investment of your lifetime, and you should be represented in the best way possible to protect your interests and investment.
In a technology-driven world, we are missing an important element that a computer or a big data company cannot provide or replace—personal knowledge and experience. Realtors® do so much more than technology can. Realtors® are hands on, here to show you the homes you are interested in, and guess what? You can’t smell cat pee through a computer screen! Zillow and Trulia won’t tell you about or show you defects in a septic system/drain field or know that there are train tracks in the backyard, among many other things you really should know and care about. A Realtor® has access to the local multiple listing service information and can give you a more accurate local market analysis than Zillow’s “Zestimate,” as well as sharing their listing information with other local Realtors®. Realtors® keep the human “touch” in the transaction because, honestly folks, real estate is not an online event!
Having said all of this, we come to the state of residency and the current market. With a local unemployment rate of 4.1 percent and 1,727 employers in Bonner County with projected job growth of +1,392 (9.8 percent increase) within the next five years, affordable housing has been and remains a serious issue and topic of discussion. Large employers such as Schweitzer, Litehouse, Quest and others struggle to retain employees due to housing opportunities or lack thereof (what is affordable to one may not be for another). The median wage in Bonner County is $15.99, the median household income is $47,135, and with current home prices, it is easy to see why it is hard for many to afford a mortgage of $225,000 or more.
In just the past year, we have seen areas such as Seven Sisters subdivision in Kootenai go from having 20 lots available for building to completely selling out. Construction at Dover Bay is constant and ever-expanding. The small development off Poplar Street has homes selling before they are built. More and more developments are needed to meet the current housing needs. In 2008, at the downturn of the market, the median single-family home price was $258,00 with 275 units sold. In 2012, the market hit a low with the median single-family home price of $187,000 and 393 units sold. Currently, 2019 has seen the median single-family home price of $315,000 (which is the same as year-end 2018) with only 145 units sold as of May 20, 2019.
Lack of inventory has led to multiple offer situations on those properties being listed, many turning into bidding wars. Cash sales have increased 27 percent over the last three years, and one-third of the sales to date in 2019 have been cash transactions. Many factors play into the increase of cash transactions. Some say it is the higher population of retirees, others say it is those who have received their insurance checks from the fires in California who are moving to Idaho, and some could argue that those folks from the city who were tired of the hustle and bustle sold their home for a large profit and can find a nicer home here for less. It is hard to say for certain, but it does play a role in our housing market.
Local Realtors® are working toward finding a solution for the local housing issues. Don’t hesitate to reach out and ask questions. Realtors® are the professionals who can answer your questions and get you started in the right direction!
Sources: Selkirk Multiple Listing Service, Idaho Department of Labor, REALTOR® Property Resource.