Every time real estate gets brought up in conversation in Idaho the first word that is usually said to describe what is happening is “crazy.” It’s crazy how much our market has changed in such a short period of time. Homes that were $200K three years ago are now $450K-$500K. This has undoubtedly made it extremely difficult for many Idaho residents to afford a decent home. So the question is, what happens next?
The question I always get asked is “do you think the market will crash?” With 2008 still in the back of our minds, there is this hidden hope that the market bubble will pop and prices will suddenly drop. Well, I am here to share my opinion, and maybe help with some potential solutions for your situation. Keep in mind that I am not a financial advisor and what I am sharing is strictly my opinion.
Unfortunately, I do not think that we are going to experience a 2008 crash, and I do not see prices magically changing anytime soon. One huge factor to that point is the demand for Idaho is extremely high and the costs for building a home are continually fluctuating. So what does that mean for us Idaho residents? Here are a couple of things to consider.
First, change your mindset. The homes people bought in the late 1970s, ’80s and ’90s for $60K, that same home is probably worth over $220K today. The same concept applies to the change we have seen over the past couple of years. These prices are the new normal.
Second, if you own a home, it is a great time to sell. You will maximize on your equity gained from your current home. If you are downsizing, then you have a strong downpayment, which means smaller monthly payments and cheaper living. If you are upgrading, the same idea still applies, you will have a considerable downpayment that will help decrease your monthly mortgage payment on your new home. If you are nervous about interest rates, remember there is always the option to refinance down the road. Talk to a lender if you have questions about rates and refinancing later on.
Third, for you first-time home buyers out there, I get it. wages are not changing and prices are going up. The solution for you is to be creative. Get with a real estate agent who can refer you to a good lender who is willing to work and set goals with you. A good Real Estate Agent and Lender can make all the difference when trying to find the right home for your situation.
Purchasing your first home can be a great investment. Finding a fixer-upper instead of looking for the most glamorous home on your budget can be a wise move. Consider a multi-family home that needs some work, fix it up and rent part of it. Mobile homes are also a great starting option for a very low cost that could turn into a rental for you when you’re ready to move on. I have seen many young people even rent rooms in their newly purchased homes out to friends or family. If you can hop on the train now and be creative, it will pay off years down the road.
I know my thoughts presented are not a “one size fits all” solution. The important part is to be creative and make the most of the situation you are in. There are many different routes to take that could benefit you in the long run. Get with your local real estate agent and lender, ask questions, plan and set goals, make the move, and you will be able to profit from it, even in this “crazy” time