"When will the market turn around?" A common question these days about the current climate of real estate in Boise and, f I got paid a dime for every time I was asked that, I'd be paying cash for my $99,000 listing!
The fact is, I can't predict the market, no one can. Agents pride themselves on being the one who provides you market stats that show how many homes sold last month and for what price. Bravo! Get over it, knowing the market is a function of your job, just like showing up to work on time.
Making Predictions Is Risky Business
Face it, no one wants to be wrong. I certainly don't, especially at the expense of a client. If I tell you to expect a 6% return on an investment property this year, and you only see 2% return, you'll be searching for a new agent. Thats why agents don't do it.
But what stops a real estate agent from warning you that interest rates are gonna go up? We do this all of the time. Some of us do it for good reason and others do it to coerce you into hurrying a decision. In reality, interest rates are at record low levels and if I tell you they are going up (they do everyday, rates are very volatile) and you've locked yours, then I'm a hero - but if they go down, no one remembers the warning. Very little risk for the agent.
Big Speculation vs. Real Trends
Real Estate Development and Building is BIG business and like any big business, decisions have to be made on certain facts. Generally, those facts are based on past trends that have been compiled year after year and studied thoroughly. We've all been sold on the idea that the Dow Jones Industrial Average has gone up over the long term. Many of us have also been told that real estate is a good investment, again, over the long term.
But what about trends that have been established that we can use today, trends that not only represent the long term but also the short term? One trend that a lot of buyers and sellers know is that the winter is a bad time to sell. They're right, sales drop in the fall, bottom out in winter only to rise again in the spring. That's a trend that is widely accepted as fact here in Boise thanks to our 4 distinct seasons.
Bucking The Trend
I know most if not all Real Estate Agents are not willing to publicly make predictions, which is exactly why I am going to do it - because I'm not most real estate agents. I have been looking trends over the past 5 years and have decided to put my neck out there and make some fairly conservative predictions that might help you make better sense of the Boise real estate market.
Predictions for the Boise Real Estate Market
Some of the predictions I am going to make will be:
- Current Month Total Sales (before the end of the month - remember, most agents including myself can easily give you last months numbers)
- Total Sales for 2009 (This is a bit more risky, because a lot can happen between now and the end of the year - remember, there are terrorists currently plotting to kill us infidels and that could happen as soon as November. In which case, my predictions will be WAAAY off).
- Percentage Increase OR Decrease for Current Month
How Will These Predictions Impact You Or The Market
They won't. At least not significantly. The only immediate or even noticeable impact will be that I will have an answer for you when you ask the question, "What's the market looking like for next month?"
You see, most people buy or sell a house because of a life change of some sort; Marriage, divorce, new job, lost job, relocation, tired of renting, etc., not because they think that in July we will see 456 re-sale sales in Ada County.
Then Why Make Predictions?
In order for me to take the risk of being wrong, I have to study the market, not just copy and paste someone elses' hard work from the Multiple Listing Service (MLS). If I am studying the market and willing to make a prediction, then you should feel confident that I have been studying the market and am competent enough to call myself a professional.
In addition, I can say that these numbers can be helpful for builders or anyone planning a subdivision or anyone poising themselves to make a move into the market. Don't get me wrong, making guesses in real estate is very important, but it has to be done on a case by case basis! Each purchase and sale is unique just as each buyer and seller is unique. Make sure you don't fall into the trap of over analyzing data that doesn't apply to your circumstances.
Since we don't know for certain what tomorrow holds, and that we could see a total economic collapse, a 3rd World War or even a Meteor hitting the Earth, then there is potential for my predictions to be wrong. In which case, please revert back to the trend that over the long term, buying real estate will be a good investment with a few hiccups from time to time! And that owning a home has advantages over renting.
Also remember that, in the midst of being wrong at times, your own home is a place where you can safely curl up into the fetal position, suck your thumb and wait for the market to get better, because, based on the trends, you know it will! Have a great day and keep your eye out for my predictions!