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There's a larger picture driving home prices in Boise and every other desirable city in the country. (If you think Boise's special, look around.) The main cause is the Federal Reserve's near-zero interest rate program. Low interest rates were needed to stave off a depression after the last financial crisis. But now they've re-blown several asset bubbles, including houses and stocks. And it's like a heroin addiction, the Fed can't easily wean the country off these low rates without the US economy going into withdrawal. There's no such thing as a free lunch in economics, so the low rates come at a price to be paid in the future. The longer they last, the higher that price. The Fed is trying to wean off slow enough that real economic growth prevents another crisis. We'll all have to hope the plan works. (Or if you're a first time buyer, you may hope the plan fails.)
Well, since I'm looking at building closer to Twin Falls in the next several months, I'm hoping the lender is going to offer as low a rate as possible. Being seniors on SS doesn't make things easier that's for sure. We'll be selling our home in Salt Lake and hope to make enough to put a decent enough chunk down to qualify. Yeah it's not like when rates were at their lowest but not terrible either. Just hope to get something locked in in a few months and get er done. After that I guess it can do what it wants to regarding interest rates. There's no question this will be the LAST time I'll be doing this. Just want to get situated nicely up there and get into the mode of my golden years. I had to rule out Washington State due to it's higher costs. California's been near invading the place so the prices have gone sky high and overall building costs escalated to the point we can't afford that route. So Idaho it is......I hope
Wow, I didn't realize this topic got so much traffic.
From what I get from reading money is flowing into Boise supporting this, not coming from within.
I have to admit it saddens me a bit as what was over there is over here now (Idaho/Boise). It seems that the pattern is to drive housing prices just up to the threshold of collapse to maximize profit.
Let me put it this way. Years ago, I went to Cupertino to Interview with Apple because they asked. When it was my turn to ask questions I asked one engineer how does he afford to live there. He said he didn't and had a long commute. So it made me realize even people with 'Dream Jobs' are having to compromise with this boom in costs.
On the same trip I saw a small one story place (Saratoga I recall) and an Old guy chatted with me. "Wow that's a deal, they just dropped the price 300k!" Ok only 1.3M for small 3b/2b home....
Thanks for all the replies it looks like investors/retiries from more expensive places are moving in.
Another bit of food for thought. Living in Austin, I feel bad that checkers, waitors, retail people literally have to shack up with others or live very far away. I hope planners/people in Boise can at least keep it to where the little guy can get a slice of the pie.
Of course there's many great places in Idaho, but I won't say to prevent giving others more ideas. :lol:
edit: Seriously, Ketchum/Sun Valley will look cheap if this keeps up.
There's a larger picture driving home prices in Boise and every other desirable city in the country. (If you think Boise's special, look around.) The main cause is the Federal Reserve's near-zero interest rate program. Low interest rates were needed to stave off a depression after the last financial crisis. But now they've re-blown several asset bubbles, including houses and stocks. And it's like a heroin addiction, the Fed can't easily wean the country off these low rates without the US economy going into withdrawal. There's no such thing as a free lunch in economics, so the low rates come at a price to be paid in the future. The longer they last, the higher that price. The Fed is trying to wean off slow enough that real economic growth prevents another crisis. We'll all have to hope the plan works. (Or if you're a first time buyer, you may hope the plan fails.)
I've been reading there is a Fed. loan program that provides the down payment as long as your credit is "good" Apparently the Fed has no confidence in private sector economic's as they meddle in everything.
Best option is to get a 15 year note pay it off and live rent/mortgage free, use the savings to travel the world every 6 months.
Quote:
Originally Posted by lluvia
Okay, so they profit $75K but where will they live?
Buy a place for $250K?
Then they've just broken even.
Try to downsize?
Harder to find a house for what they paid 5 yrs ago.
And if they do, it may not be as nice as their previous home.
Bank the profit and become renters?
That's a possibility.
It's a real catch 22 & the reason people are staying put.
This is fallacy, and I'd have thought a broker would know better.
Since he put no money down, he's starting with no equity,
and so probably 75%, or more, of his monthly payment will
go toward interest, not to mention he's on the hook for PMI.
He's throwing away tons of money, and will build equity
very slowly, especially if it's a longer term mortgage.
This is the most expensive way to buy a house.
It's better to be "throwing money away in rent"
and not carrying the liability of home ownership,
while saving aggressively for a 20% down payment,
thereby going into a deal with instant equity, no PMI,
and less interest paid over the life of the mortgage.
You are welcome to your opinion, but I stand by mine! If he was to rent the same home for $200 more a month, how would he be able to save that toward a larger down payment? I do agree that very little of his initial payment goes to principle; however, 0% of your rent does!
You are welcome to your opinion, but I stand by mine! If he was to rent the same home for $200 more a month, how would he be able to save that toward a larger down payment? I do agree that very little of his initial payment goes to principle; however, 0% of your rent does!
You don't rent the same house you would buy.
The idea is you rent the cheapest thing you
can stand to live in while saving aggressively.
With some sacrifice and discipline a person can save $10-20,000 a year.
Do that for three years and you've got a nice down payment with instant equity.
But alas, sacrifice and discipline aren't "cool", they're for rubes like me.
On your kid's $166,000 30-year mortgage with no down, PMI, and $1,000 a month payment,
probably less than $300 a month will be going toward principal for the first several years.
Halfway through the loan he'll still owe more than 2/3 of the principal.
That's he's throwing away gobs of money is a fact, not my opinion.
Maybe he's planning to sell within five years and he's counting on the home appreciating.
Chances are he'll make money, but not nearly as much as if he'd put 20% down.
My philosophy is that debt is a bad thing, shouldn't
be used as a tool, and should always be minimized.
Your philosophy is obviously different.
Can one do a Rent-to-Own here? That used to be another option to home ownership.
In a low down payment situation, the amount of interest paid is tax deductible. Rent isn't.
I bought my house long ago and there was no way I could ever have accumulated 20% down. In talking with a Realtor, I found that I could assume a mortgage. That option disappeared not long after I bought my house, but it sure worked for me.
Even today, I couldn't afford to buy the house I now live in....
I have seen a couple of trends in the last few years.
More people are going out further from Boise if they cant afford to buy in close. Lots of homes under 300k in Canyon County. Canyon county had some really inexpensive homes a few years ago, but as more demand for housing pushed more people to buy further out and commute into Boise.
Secondly, I have had several clients move her from out of state and bring their job with them. Someone making 45k a year in CA moves here; gets an instant lifestyle improvement and finds they can actually buy a home.
As the rest of the west gets more expensive, the Treasure Valley benefits with the migration from higher cost areas.
Umm no. You cant buy a 300k house on 45k. Try more like 70K. Maybe with two peopel you could but I cannot imagine having any quality of life.
Boise is going to become the playground of the rich like any other nice place with a pop of over 100k is becoming.
I think the way Idaho will benefit is by companies that relocate or start up here for the same reason that people do. They can lower their expenses and benefit financially.
For someone that moves here and works from home, you're right. They are putting their money into the local economy, which helps it. But, they may also be able to afford paying more for a home than people who have a job here that already can't. As companies move or start up here, more jobs are available here than they were before.
I wanted to move here in 2007, but the IT job market was really bad. I saw a recruiter when I came out back then, and asked him to send me everything that came open for the next few months. He sent me one job. Now, when I look online, there are dozens and dozens. The salaries for jobs in my area (IT) are lower than they are in CA, but high enough to afford a home.
So, I can see both sides but definitely relate and feel for those who may have a job and are struggling as it is, but see housing continue to appreciate out of reach.
What types of IT jobs and what types of salaries? I would not consider Boise unless I could make at least 85K at this point
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15 year note
