North Idaho Real Estate Blog Keeping the “invisible” property owners of Kootenai County in-the-know, as if you were here on a daily basis. 208.769.9464 * dreamteam @ nidt . com * Author: Christina Ethridge, REALTOR(R)

FYI - this is long and I’m on a soap box on a roll . . .

On Sunday, an article ran in the Coeur d’Alene Press:

Foreclosures continue at rapid pace.

COEUR d’ALENE — Real estate foreclosures continue at a rapid pace, with investors who came late to the game taking the biggest hit.

“They have really screamed up,” said Cindy Harnasch, title officer at First American Title, where 35 foreclosure sales were held in February.

Many of those were on rental properties, she said.

This isn’t surprising since the number of ‘notices of default’ increased substantially last year. For the record, in order for there to be a foreclosure sale, a notice of default must have been filed a minimum of 4 months prior - so these 35 foreclosures were already ‘accounted for’ in 2007 NOD numbers. Oh, and FYI, it’s not investors that came ‘late in the game’ taking the biggest hit.

What I do take issue with is this statement:

While investors, mostly from California and Arizona, account for about half of foreclosures, of 50 cases 35 were hit when their adjustable rate mortgage or loan with a balloon payment came due before they could realize a gain from their investment or refinance, said Shani Snyder at Pioneer Title.

“They were listening to Realtors, who said ‘come up and buy,’” she said.

First of all - how in the world do they know the financial reasoning behind the foreclosure? The bank doesn’t share it. It is not cut and dry that it was the adjustable rate mortgage that tipped the hat. Sorry Shani, that’s pure speculation on your part. We’ve worked with over a thousand investors over the past 5 years and the ones who are currently in trouble are not the ones who purchased at the peak of the market and are having ARM problems. Rather, the ones in trouble are those who purchased and then refinanced at the peak, taking out all cash and increasing their monthly negative cash flow substantially. Additionally, the majority of those are in trouble because they have major problems in other markets such as Florida or Phoenix. It’s not just one or two homes in one area that are the issue, it’s the over all financial situation of the owner because of issues in other volatile markets.

As the only team in North Idaho that actually reached out to investors by doing presentations in California and Arizona to potential investors, I really take issue with Shani’s statement that “They were listening to Realtors, who said ‘come up and buy”.

We provide a product in an area we ourselves invest in. Most of these investors listened to the investment groups they were members of, not the Realtors. Many of these investors purchased in ways we never would: too many properties at once, speculating on appreciation rather than balancing out the portfolio between growth and cash flow, not putting enough down on a property, cashing out at the peak and using the cash for other things, etc.

Additionally, what we are finding is that the majority of investors that are in trouble did not purchase through our team. Oh, believe me, they found out about the Coeur d’Alene area because they came to a presentation we did, or found our website, or somehow through us, but, they decided they knew better and purchased through other agents - agents who gave bad advice. Some went to other agents because we were so incredibly busy and understaffed. We’ve taken care of the under-staffing and have restructured our business with a wider foundation.

I am currently working with over 40 investors today who I know found out about the area from us, but purchased through someone else. They purchased properties we would never have recommended they purchase, at prices higher than what those properties were actually selling for (yes, I check every time an investor calls).

It makes me sick when I found out they were blinded by the area’s potential and listened to just any agent. I can’t stress it enough - make darn well sure your real estate agent knows what they heck they are doing in this business. Make sure they have more than a few months experience. Make sure they have actually worked with investors. In fact, better yet, make sure they are actively investing in the local Coeur d’Alene market themselves. Why in the world would anyone utilize someone’s services when that someone doesn’t do what they are recommending?

Here are some examples I’ve come across:

Agents that advised out of state investors to purchase older properties that need lots of maintenance and repair. Well, if the investor is local and has their eye on it, it can be a good investment. The problem is, a maintenance heavy property is not a great investment for a far away investor!! I’m working with several owners right now that are burdened by properties that need massive amounts of work in order to sell them for competitive prices. They are left with the option of doing as minimal fixing up as possible and renting them out. This is not a good ‘as liquid as possible’ asset.

Agents that tell potential buyers what a property would rent for, and they simply don’t have a clue. Perfect example, brand new duplexes recently built in Post Falls. The agent kept telling potential buyers that the units would rent for $995 and up. YEAH RIGHT. Since a single family home in the same neighborhood, with more sq. ft. rents for a maximum of $850, I’m wondering why this agent kept spouting that info. We even took the time to provide this agent with rental facts. She refused to listen and simply said “no, they are worth $995, they’ll get it”. Let’s see, the duplexes sold. What are they renting for now? $795 - $825 per unit. That’s a big difference for an investor.

Here’s another example: Investors that have purchased properties who are using a property management company that couldn’t care less how well the property does. In other words, their goal is to simply get the property rented with as little expense to the owner as possible. The problem is, regular maintenance goes unchecked and uncompleted and, over the course of 3-5 years, the property is worth less than it’s competition - simply because the competition used a property management company that actually assumes a ‘vested interested’ in the property. What do I mean by that? We are a full service real estate and property management company. We buy and manage our own properties. We treat your properties exactly like we treat our own properties. The goal is to maintain excellent value, increase the cash flow and maintain a long-term relationship. We want to help from the beginning when you purchase the property, all the way to the ‘end’, when you decide to sell the property and move on.

Ok, now this one just boggles my mind -

Neither title company could provide information on the total number of foreclosures over the past year, but, Harnasch said, “They’re going up quite a bit. It varies. One day we may get none, the next day five.”

They couldn’t provide or wouldn’t provide? The total number of NOD’s filed in 2007 were 558 (these numbers were provided by the best title company in Kootenai County: North Idaho Title). If they’ve been working in the industry for more than a year or two, they’d know the statistical trends. 80% of NOD’s never go to foreclosure. That means approximately 111 properties in 2007 went to foreclosure - well, not technically - some of those will be going to foreclosure over the next few months because of filing time frames. What do I mean by time frames? In order to foreclose on a property, the lien holder must file a notice of default a minimum of 4 months prior to the foreclosure sale. All of the properties selling between January and April were accounted for in 2007’s NOD numbers. These are easy enough numbers to provide to a reporter!!

Even Snyder, a lifetime resident of the area, was not immune to the sea change in the market. She said she has seen the value of her home, offered for sale a year ago at $379,000, drop by $60,000.

Lifetime resident - ok - but the value of her home did not drop by $60,000. It didn’t sell last year at the price of $379,000 therefore it was never worth $379,000. If a neighboring home with a similar floor plan sold for $299,000 - her home is worth approximately the same. In other words, the home was over priced to begin with, either because of her pipe dreams or because the agent she listed with provided inaccurate comparables and advice. Bad advice - or she didn’t listen. That happens a lot. Sellers insist their home is worth some “pipe dream value” because they “heard through the grape vine” that another home that they consider inferior to theirs was listed for “such and such amount” and therefore their home is worth more.

Let me say this - less than 5% of real estate agents in Kootenai County can accurately price a property for sale in a hard market. The only reason this wasn’t realized from 2003 - 2006 is because the market was appreciating faster than normal, so even if the property was over-priced, it still sold a month or two later because the market caught up to it. Don’t get caught up in listing your home with an agent just because they come along and say they’ll list it for higher. This is called “stupid agent” or “buying your listing” and it’s a bad bad practice.

In summary - I truly wish that reporters would actually do research on their articles rather than just try to make a deadline. I also wish they’d hold the people they quote accountable to their statements. In other words, make them provide the solid numbers and facts, with sources, before going off and printing their statements for the world to read. No wonder the consumer is confused!

I wonder, is that why I haven’t been contacted by the paper? That’s it! I provide reality and facts - those don’t go well with someone who just wants ’sensation’. Bummer.

Posted under For Investors

FYI - this is long and I’m on a soap box on a roll . . .

On Sunday, an article ran in the Coeur d’Alene Press:

Foreclosures continue at rapid pace.

COEUR d’ALENE — Real estate foreclosures continue at a rapid pace, with investors who came late to the game taking the biggest hit.

“They have really screamed up,” said Cindy Harnasch, title officer at First American Title, where 35 foreclosure sales were held in February.

Many of those were on rental properties, she said.

This isn’t surprising since the number of ‘notices of default’ increased substantially last year. For the record, in order for there to be a foreclosure sale, a notice of default must have been filed a minimum of 4 months prior - so these 35 foreclosures were already ‘accounted for’ in 2007 NOD numbers. Oh, and FYI, it’s not investors that came ‘late in the game’ taking the biggest hit.

What I do take issue with is this statement:

While investors, mostly from California and Arizona, account for about half of foreclosures, of 50 cases 35 were hit when their adjustable rate mortgage or loan with a balloon payment came due before they could realize a gain from their investment or refinance, said Shani Snyder at Pioneer Title.

“They were listening to Realtors, who said ‘come up and buy,’” she said.

First of all - how in the world do they know the financial reasoning behind the foreclosure? The bank doesn’t share it. It is not cut and dry that it was the adjustable rate mortgage that tipped the hat. Sorry Shani, that’s pure speculation on your part. We’ve worked with over a thousand investors over the past 5 years and the ones who are currently in trouble are not the ones who purchased at the peak of the market and are having ARM problems. Rather, the ones in trouble are those who purchased and then refinanced at the peak, taking out all cash and increasing their monthly negative cash flow substantially. Additionally, the majority of those are in trouble because they have major problems in other markets such as Florida or Phoenix. It’s not just one or two homes in one area that are the issue, it’s the over all financial situation of the owner because of issues in other volatile markets.

As the only team in North Idaho that actually reached out to investors by doing presentations in California and Arizona to potential investors, I really take issue with Shani’s statement that “They were listening to Realtors, who said ‘come up and buy”.

We provide a product in an area we ourselves invest in. Most of these investors listened to the investment groups they were members of, not the Realtors. Many of these investors purchased in ways we never would: too many properties at once, speculating on appreciation rather than balancing out the portfolio between growth and cash flow, not putting enough down on a property, cashing out at the peak and using the cash for other things, etc.

Additionally, what we are finding is that the majority of investors that are in trouble did not purchase through our team. Oh, believe me, they found out about the Coeur d’Alene area because they came to a presentation we did, or found our website, or somehow through us, but, they decided they knew better and purchased through other agents - agents who gave bad advice. Some went to other agents because we were so incredibly busy and understaffed. We’ve taken care of the under-staffing and have restructured our business with a wider foundation.

I am currently working with over 40 investors today who I know found out about the area from us, but purchased through someone else. They purchased properties we would never have recommended they purchase, at prices higher than what those properties were actually selling for (yes, I check every time an investor calls).

It makes me sick when I found out they were blinded by the area’s potential and listened to just any agent. I can’t stress it enough - make darn well sure your real estate agent knows what they heck they are doing in this business. Make sure they have more than a few months experience. Make sure they have actually worked with investors. In fact, better yet, make sure they are actively investing in the local Coeur d’Alene market themselves. Why in the world would anyone utilize someone’s services when that someone doesn’t do what they are recommending?

Here are some examples I’ve come across:

Agents that advised out of state investors to purchase older properties that need lots of maintenance and repair. Well, if the investor is local and has their eye on it, it can be a good investment. The problem is, a maintenance heavy property is not a great investment for a far away investor!! I’m working with several owners right now that are burdened by properties that need massive amounts of work in order to sell them for competitive prices. They are left with the option of doing as minimal fixing up as possible and renting them out. This is not a good ‘as liquid as possible’ asset.

Agents that tell potential buyers what a property would rent for, and they simply don’t have a clue. Perfect example, brand new duplexes recently built in Post Falls. The agent kept telling potential buyers that the units would rent for $995 and up. YEAH RIGHT. Since a single family home in the same neighborhood, with more sq. ft. rents for a maximum of $850, I’m wondering why this agent kept spouting that info. We even took the time to provide this agent with rental facts. She refused to listen and simply said “no, they are worth $995, they’ll get it”. Let’s see, the duplexes sold. What are they renting for now? $795 - $825 per unit. That’s a big difference for an investor.

Here’s another example: Investors that have purchased properties who are using a property management company that couldn’t care less how well the property does. In other words, their goal is to simply get the property rented with as little expense to the owner as possible. The problem is, regular maintenance goes unchecked and uncompleted and, over the course of 3-5 years, the property is worth less than it’s competition - simply because the competition used a property management company that actually assumes a ‘vested interested’ in the property. What do I mean by that? We are a full service real estate and property management company. We buy and manage our own properties. We treat your properties exactly like we treat our own properties. The goal is to maintain excellent value, increase the cash flow and maintain a long-term relationship. We want to help from the beginning when you purchase the property, all the way to the ‘end’, when you decide to sell the property and move on.

Ok, now this one just boggles my mind -

Neither title company could provide information on the total number of foreclosures over the past year, but, Harnasch said, “They’re going up quite a bit. It varies. One day we may get none, the next day five.”

They couldn’t provide or wouldn’t provide? The total number of NOD’s filed in 2007 were 558 (these numbers were provided by the best title company in Kootenai County: North Idaho Title). If they’ve been working in the industry for more than a year or two, they’d know the statistical trends. 80% of NOD’s never go to foreclosure. That means approximately 111 properties in 2007 went to foreclosure - well, not technically - some of those will be going to foreclosure over the next few months because of filing time frames. What do I mean by time frames? In order to foreclose on a property, the lien holder must file a notice of default a minimum of 4 months prior to the foreclosure sale. All of the properties selling between January and April were accounted for in 2007’s NOD numbers. These are easy enough numbers to provide to a reporter!!

Even Snyder, a lifetime resident of the area, was not immune to the sea change in the market. She said she has seen the value of her home, offered for sale a year ago at $379,000, drop by $60,000.

Lifetime resident - ok - but the value of her home did not drop by $60,000. It didn’t sell last year at the price of $379,000 therefore it was never worth $379,000. If a neighboring home with a similar floor plan sold for $299,000 - her home is worth approximately the same. In other words, the home was over priced to begin with, either because of her pipe dreams or because the agent she listed with provided inaccurate comparables and advice. Bad advice - or she didn’t listen. That happens a lot. Sellers insist their home is worth some “pipe dream value” because they “heard through the grape vine” that another home that they consider inferior to theirs was listed for “such and such amount” and therefore their home is worth more.

Let me say this - less than 5% of real estate agents in Kootenai County can accurately price a property for sale in a hard market. The only reason this wasn’t realized from 2003 - 2006 is because the market was appreciating faster than normal, so even if the property was over-priced, it still sold a month or two later because the market caught up to it. Don’t get caught up in listing your home with an agent just because they come along and say they’ll list it for higher. This is called “stupid agent” or “buying your listing” and it’s a bad bad practice.

In summary - I truly wish that reporters would actually do research on their articles rather than just try to make a deadline. I also wish they’d hold the people they quote accountable to their statements. In other words, make them provide the solid numbers and facts, with sources, before going off and printing their statements for the world to read. No wonder the consumer is confused!

I wonder, is that why I haven’t been contacted by the paper? That’s it! I provide reality and facts - those don’t go well with someone who just wants ’sensation’. Bummer.

Posted under For Investors

It pays to be the ‘potato state’ but what people don’t know is that we are also considered a “suburb” of silicon valley. Combine these two industries with medical, environmental, tourism, health and retail therapy and you’ve got one booming economy. An economy that ignored that last two recessions.

…the heart of American’s biggest economic boom is right here in Idaho

In Idaho, the state with the nation’s fastest-growing economy, homebuilding hasn’t crashed as it has across much of the USA, and a two-decade run of prosperity continues.

Chalk it up, in large part, to chips — computer chips and potato chips. And to a state whose climate and rugged outdoor beauty are attracting highly mobile, white-collar newcomers who could work or live most anywhere.

What’s less known is that Idaho has been competing with Arizona, Nevada and Florida to be the USA’s most vibrant boom state. And unlike those hot-weather states, Idaho is having a boom that shows little sign of fading.

Idaho has been tops among states in economic growth since 2003. It has ranked high nearly every year since 1987, a run of good times unmatched by any other state. Even the recessions of 1991 and 2001 didn’t stop growth.

No matter how often I tell people these facts, having it supported by a national article simply supports my voice. Idaho is the place to live please come join us!!
Read entire article here.

Posted under About the Area, Economics of North Idaho, For Investors

It pays to be the ‘potato state’ but what people don’t know is that we are also considered a “suburb” of silicon valley. Combine these two industries with medical, environmental, tourism, health and retail therapy and you’ve got one booming economy. An economy that ignored that last two recessions.

…the heart of American’s biggest economic boom is right here in Idaho

In Idaho, the state with the nation’s fastest-growing economy, homebuilding hasn’t crashed as it has across much of the USA, and a two-decade run of prosperity continues.

Chalk it up, in large part, to chips — computer chips and potato chips. And to a state whose climate and rugged outdoor beauty are attracting highly mobile, white-collar newcomers who could work or live most anywhere.

What’s less known is that Idaho has been competing with Arizona, Nevada and Florida to be the USA’s most vibrant boom state. And unlike those hot-weather states, Idaho is having a boom that shows little sign of fading.

Idaho has been tops among states in economic growth since 2003. It has ranked high nearly every year since 1987, a run of good times unmatched by any other state. Even the recessions of 1991 and 2001 didn’t stop growth.

No matter how often I tell people these facts, having it supported by a national article simply supports my voice. Idaho is the place to live please come join us!!
Read entire article here.

Posted under About the Area, Economics of North Idaho, For Investors

It pays to be the ‘potato state’ but what people don’t know is that we are also considered a “suburb” of silicon valley. Combine these two industries with medical, environmental, tourism, health and retail therapy and you’ve got one booming economy. An economy that ignored that last two recessions.

…the heart of American’s biggest economic boom is right here in Idaho

In Idaho, the state with the nation’s fastest-growing economy, homebuilding hasn’t crashed as it has across much of the USA, and a two-decade run of prosperity continues.

Chalk it up, in large part, to chips — computer chips and potato chips. And to a state whose climate and rugged outdoor beauty are attracting highly mobile, white-collar newcomers who could work or live most anywhere.

What’s less known is that Idaho has been competing with Arizona, Nevada and Florida to be the USA’s most vibrant boom state. And unlike those hot-weather states, Idaho is having a boom that shows little sign of fading.

Idaho has been tops among states in economic growth since 2003. It has ranked high nearly every year since 1987, a run of good times unmatched by any other state. Even the recessions of 1991 and 2001 didn’t stop growth.

No matter how often I tell people these facts, having it supported by a national article simply supports my voice. Idaho is the place to live please come join us!!
Read entire article here.

Posted under About the Area, Economics of North Idaho, For Investors