Did you see Lacey featured in the front page story on house hunting in Saturday’s Idaho Statesman? You can find it here. It’s no surprise to us that the first Saturday front page story of 2016 was about affordable housing – it’s on everyone’s mind these days! Average rent in Boise is climbing, the fed has announced that interest rates will likely rise in 2016, and these factors make people wonder if they are ready to buy a new home now, and if they could even afford it. Here’s what you should know if you are looking for a home under $200,000 in the Treasure Valley:
1. There is a lot more housing under $200,000 than you might think. The Statesman article mentioned on the front page that only 2% of new build construction is under $200,000. That is true! But did you know new construction represents only a small fraction of the housing market? Out of 61 homes our buyers purchased in 2015, only 3 were new construction. Does that mean buyers under $200,000 have to settle for old properties that need a ton of work? Not at all – 50% of the homes we sold under the $200,000 mark were built in 1995 or later – hardly fixer uppers. In 2015, our buyers were able to find homes under $200,000 in every part of the Valley.
Bottom line: The median (middle) price of homes we found for buyers in 2015 was $206,000. Half of the homes our buyers chose were near and below(as in: far below) that $200,000 mark. Any buyer in the current market should be able to find a home that meets their needs at a price that they can afford.
2. Be ready to move. New buyers realize quickly that the current market is moving fast and inventory is low. 50% of homes listed in the current market will sell in less than a month. Why does that matter to you? When you find your dream home, you may not have time to gather up a down payment, get qualified for a loan, find out if you can break your lease, or even have much time to think on it before someone else already has that house under contract. Be prepared to move fast when you find a home you love.
3. Understand the difference between purchase price and monthly payment. In 2009, the average mortgage rate was 5%. Today, an average 30 year mortgage has a rate of only 3.85%. In 2009, the monthly payment on a $200,000 home would have been $1074 a month. Today, that same home would be $937 a month. That’s a difference of $1644 a year, and $49,320 over the life of the loan. Those little percentage points do make a difference in what your actual mortgage payment will be, so sit down with a loan officer and find out what types of loans are available to you. A difference of even one-tenth of a percentage point could save thousands of dollars over the life of a loan.
4. Enlist help! A buyers agent that is familiar with the area you would like to buy in comes at no cost to you as a buyer and offers a wealth of market information that can help you with your search. A good agent will leverage technology to send you new listings that meet your specific criteria. Experienced agents may also know about listings before they even come to market, giving you the best chance of finding a property before someone else.
Be sure to share your home buying dreams with friends and family as well. When people know you are looking, they will share information with you about their experiences in the local market.
If you think you might be ready to make the move to home ownership in the Treasure Valley, we want to hear all about it! Our team is always willing to answer any questions, and we will never spam or stalk you.