Greg Johnston Real Estate Blog Pocatello Idaho Real Estate Information

1Apr/140

Benefits of home ownership

The age-old debate continues. Is it better to rent a home or to own a home? There are pros and cons for both arguments. While you can say home values go up, you can also point out that they can also go down. The financial benefits of homeownership are evident year round, but particularly around tax time.

1. Homeownership Builds Wealth Over Time

We were always taught growing up that owning a home is a financially savvy move. Our parents knew it, and their parents knew it. But this past decade of real estate turbulence has shaken everyone’s confidence in homeownership. That is why it’s so important that we discuss this again now that we are in a ‘new market.’ Homeownership can be a very savvy financial move – but only if people buy homes they can actually afford. In 2014, this idea of sticking to a home you can afford to gradually build wealth is a “rule” that just happens to be new and old at the same time. Historically, homes appreciate in Idaho at about 3% per year based on a 30-year average. If you live in your home for five years it may go up in value about 15%.

2. You Build Equity Every Month

Your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity. The way mortgages work is that the principal portion of your payment increases slightly every month year after year. It’s lowest on your first payment and highest on your last payment. Thus, as the months and years go by, your equity grows! On a 30-year loan it may seem you will never pay off your home, but take a look as the balance goes down every month you make your payment. It takes time, but the balance is going down. You will be amazed at how fast you can pay off the home by just adding a little more to the principle every month.

3. You Reap Mortgage Tax Deduction Benefits

• Mortgage deduction: The tax code allows homeowners to deduct the mortgage interest from their tax obligations. For many people this is a huge deduction, since interest payments can be the largest component of your mortgage payment in the early years of owning a home. For example, if you paid $6,500 in mortgage interest on your home in one year, that full amount is tax deductable. This also applies to home equity loans against the house. Many people will pay off high rate non-deductable loans (cars, credit cards) with money they use borrowed against their home. Now it is deductable, and often at a lower interest rate.
• Some closing cost deductions: The first year you buy your home, you are able to claim the points (also called origination fees) on your loan, no matter whether they are paid by you or the seller. And because origination fees of 1 percent or more are common, the savings are considerable.
• Property tax is deductible: Real estate property taxes paid on your primary residence and a vacation home are fully deductible for income tax purposes.

4. You Get a Capital Gains Exclusion

If you buy a home to live in as your primary residence for more than two years then you will qualify for a capital gains tax exemption. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes. There are not many ways that you can earn income and not have to pay taxes on the gain. Your personal home is one way to earn money and not have to pay taxes on it.

5. Long Term, Buying Is Cheaper than Renting

In the first few years, it may be cheaper to rent a home than it is to have purchased a home due to the costs associated with getting a loan to buy a home. But over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, you are not throwing away all that money on rent. You need to live someplace, so instead of paying off your landlord’s home or building, pay off your own!

Are there disadvantages as well? Maybe. You can argue that it costs money to fix up a home you own where it would not be your responsibility to pay for that as a renter. You can argue that it takes time to sell a home where you can just quickly leave when renting. Overall, in my opinion, it is just nice to have a place to call home and live how you want to rather than living under someone else’s rules, even if you have to make a little effort to own a home. If you have any questions about buying a home in Pocatello, Idaho, contact Greg Johnston, REALTOR at 208-232-9041 or by email at Greg@JohnstonTeam.com.

30Jan/140

Investors: Trailer Parks for Sale

Real estate has always been a popular investment. There are a few types of properties that are popular with real estate investors. One popular investment is storage units. The other is manufactured home parks. I receive calls often from people asking if I have any storage units or trailer parks for sale. Many investors buy rental houses. However, storage units and trailer parks are popular because of the low maintenance required. For example, a mobile home park is just land. You rent the lot to someone and rarely have to worry about fixing things. It is a simple investment compared to a home where you have to worry about repairs to the plumbing, electrical, furnace, etc.

Right now I have two small mobile home parks for sale in American Falls, Idaho. One park has eight spaces. The other park has eleven spaces. Here are some details on the properties.

424 Lincoln, American Falls, Idaho

Eight lots in the park. Each lot rents for $155.
There is one older manufactured home included. It rents for $195/month.
Total monthly income is $1,435 if fully occupied. There are a few vacancies.
Expenses: Monthly water bill is $475. Monthly property taxes are $102.
Net income is $858 per month.
List price is only $55,000.

115 Roosevelt, American Falls, Idaho

Eleven lots in the park. Each lot rents for $155.
Two manufactured homes are included, but one is in poor condition.
One home is rented for $345 per month.
Total monthly income is $2,050 if fully occupied. There are a few vacancies.
Expenses: Monthly water bill is $591. Monthly property taxes are $149.
Net income is $1,311 per month.
List price is $100,000.

If you have wanted to purchase a trailer park, these could be the right investments for you. They are small and manageable, and located in an area where there is a demand for lots. Give me a call so we can talk more about it. Also, I know of many trailers for sale that you can buy, move to this park, and rent the homes if you want to. There are many investment opportunities. If you are looking to invest in real estate, please contact Greg Johnston, Realtor, at 208-232-9041.

17Jan/140

New Rockwell Homes for sale in Chubbuck!

Newly constructed homes are always popular with home buyers. There is definitely something special about owning a brand new home. Fresh smells, new carpet, and being the first owner are valuable to many people. Right now I have two new homes for sale built by Rockwell Homes that were just completed. The homes are located on Camden Street in Brookstone Subdivision in Chubbuck. One home is priced at $165,000. The other is larger and priced at $169,900. Both homes are ranch style homes with 3 bedrooms and 2 bathrooms on the main floor. The basement is unfinished. Two car garage. The builder offers a one-year warranty on the home. Click here to view the pictures of the homes: Camden.

We have some other new homes under construction right now. They will be in the same general price range. You can select your colors and materials for the home. Pick out the carpet, counter tops, and paint color. You can customize your new home. Plus, we have a twin home under construction that will be for sale around $135,000 per side. This twin home is a one-level home that is popular with buyers.

Have you been considering building a new home in Pocatello? Right now is the time to start working on it. Give me a call so we can discuss having a new home built for you. It will take 30-45 days to finalize your floor plan and obtain a building permit. It then takes 3-4 months to build the home. If you start now you can enjoy your home this summer. We can help you build any home on any lot in any price range. You can choose from a home we are currently building, or you can bring us your custom floor plan.

Looking to build? Give me a call, Greg Johnston, Realtor at Keller Williams Realty East Idaho, 232-9041. I can also help you sell your current home.

7Jan/140

2013 Pocatello Idaho real estate market statistics

2013 has come to an end. I have compiled the sales statistics for the Pocatello, Idaho real estate market. I like to compare market data with previous years. This year to year comparison gives us a great indication of what is happening with the local real estate market. Overall, 2013 was a good year for real estate home sales in Pocatello, Idaho. We had more home sales than the last few years, and more than we have had in one year since 2009. Click here for a copy of the 2013 Market Statistics. I think you will find them to be very interesting and informative.

There are a few things that really stand out to me. 1- We have more homes on the market right now than we had at this time last year. We have 429 homes on the MLS right now. We had 359 at the end of 2012. I think home owners are seeing that homes are selling and so more people have put their home up for sale. Many people may not have been able to sell their home in the last few years and now feel they may be able to sell it. The main negative with more homes for sale is that it will prevent home value appreciation. 2- We sold 861 homes in 2013. That is up a lot from the 705 home sales in 2012. That is about a 20% increase in home sales. That is a huge jump! It is nice to see so many more sales. 3- 50 new homes sold in 2013 compared to 25 newly built homes in 2012. The number doubled. New construction in the Pocatello, Idaho area is rebounding! 4- The average sales price in 2013 was $151,690. In 2012 it was $146,251. Although it is not a big jump, it is still a 3.5% increase in home values. After years of depreciation we will gladly take any home value appreciation we can get.

Last year I predicted a strong 2013 and I was right. Sales increased. I also said new construction would be strong. I was right. New construction was stronger. What is the forecast for 2014? I am confident that the Pocatello, Idaho real estate market will remain strong, but I do not expect another 20% increase in home sales. I expect the total number of home sales in 2014 to be comparable to 2013, but it may be slightly less. Last year we had a busy January and a great start to the new year. This year it is slower in January than it was last year. Rumors are that mortgage interest rates will continue to rise. A rise in interest rates will deter some home buyers. Let’s hope we have 861 home sales in 2014, but do not be surprised if we have a slight pull back to the 800 range.

The real estate market is good right now. If you have an interest in selling your home, buying a new home, or investing in real estate in the Pocatello, Idaho area, please contact Greg Johnston, REALTOR, at Keller Williams Realty East Idaho at 208-232-9041.

13Dec/130

Winter home heating ideas

It is officially winter time in Pocatello, Idaho. With the very cold weather we have experienced recently I felt it would be a good idea to discuss ways to keep a home warm and inviting. This applies not only to current home sellers, but to everyone in general.

With cooler temperatures, home owners will want to keep a home inviting and cozy, especially if they’re trying to sell it. But just cranking up the heat can be expensive — particularly this year with heating costs having been increased. Heating costs are on the rise. For example, households using natural gas will likely see bills 13 percent higher this year than last, paying on average $679 for heat this season.
So what are some quick, affordable ways to keep a home warm? There are some good ideas found in a free eBook called “The Cure for the Common Cold Room: A Safe & Smart Home Heating Guide,” by ElectricFireplacesDirect.com. It offers up numerous tips and tricks to home owners and sellers for keeping a home warm this winter. Here are a few ideas from the book:

1. Add area rugs: Hardwood and tile floors can make your home feel cold in the winter. Add some area rugs to provide a warmer barrier between your feet and the floor. Non-skid utility rugs or rubber mats can make kitchen floors more comfortable and safe, according to the eBook.

2. Set ceiling fans to run clockwise: Yes, a ceiling fan can be used in the winter months too and can even help heat your home. The majority of ceiling fans have two settings: Counterclockwise cools rooms in the summer and clockwise can force warm air downward in the winter. Look for a small switch on the ceiling fan to change its direction clockwise for the cooler months.

3. Rearrange furniture: Check the arrangement of the furniture in the home to make sure it’s cozy. Often times, home owners spread out furniture to fill an entire room. Instead, group pieces together to get a warmer feel. Move furniture away from the windows and doors and closer to the fireplace, if there is one in the home.

4. Add moisture to the air: Humid air feels warmer than dry air. Therefore, a humidifier may make a difference. Cool mist and warm mist humidifiers can both be effective in making rooms feel warmer. “A cool mist humidifier is safer — and usually less expensive — because it doesn’t expel hot water or steam vapor that could hurt children or pets,” according to the book.

5. Let the sun shine inside: Use the sun to heat your home by adjusting the home’s curtains to let the sun in. Open south-facing curtains on sunny days. Also, be sure to close curtains at night to provide an extra barrier against winter winds that are trying to squeeze inside the home.

6. Seal gaps around doors and windows: A little caulking and weather stripping can go a long way to keep out cold air. Seal it up. Even simple things such as placing a small towel under an exterior door can help to keep out a cold draft.

Home sellers need to make sure their home looks and feels good to potential home buyers during the winter months. It is important to keep the home warm. It is also important to be safe. Shovel snow and remove ice from all walkways so visitors do not slip on the ice.

Homes sell year round. You do not need to take a home off the market in the winter. If you have an interest in selling your home in Pocatello, Idaho, call Greg Johnston, Realtor, at 208-232-9041.

26Nov/130

2013 Pocatello Night Lights Parade

Happy Thanksgiving! Mark your calendars for the annual Night Lights Parade the day after Thanksgiving in Pocatello, Idaho. On Friday, November 29th, 2013 at 6:30 p.m. this fun parade will go through the Center Street underpass and then down North Main Street of Pocatello. It will pass right by my real estate office – Keller Williams Realty at 150 N. Main Street. All of the parade entries will be covered with lights. It is a great way to begin the Christmas season. Santa will arrive and be available to the children. Dress warm. It is a fun parade every year.

Right after the parade will be the long anticipated lighting of the Chief Theatre sign. This will happen at about 8:00 p.m. once the parade is over. This is in the 200 block of North Main Street.

These community events are sponsored by Old Town Pocatello.

21Nov/130

Keller Williams Realty East Idaho

I want to announce some exciting news! Our real estate company has changed its name and has joined a national franchise. The Home Specialists Real Estate Company is now known as Keller Williams Realty East Idaho. We are still in the same location at 150 N. Main Street in Pocatello, Idaho. We did not change locations. You will begin to see some new for sale signs in the yards of the homes we are marketing for sale.

A national franchise can offer us additional support and exposure on the homes we have listed for sale. This change will be very beneficial to the agents in our office as well as the sellers we are working for. You will no longer see The Home Specialists advertising, but I am still available to help you, just under a new company name.

If you have any questions about Keller Williams Realty, or about the Pocatello, Idaho real estate services I offer, please call Greg Johnston, Realtor, at 208-232-9010.

22Oct/130

2013 Old Town Pocatello trick-or-treat

A very fun Halloween activity is the annual Old Town Pocatello Trick-Or-Treat. Many of the businesses on Main Street, Arthur Street, and the side streets will be open to pass out candy to children. Wear a costume and join us on Halloween. This year, Halloween is on Thursday, October 31st, 2013. The Old Town Pocatello Trick-Or-Treat will be from 3:00 to 5:30 that day. I love this event. The streets are full with well over 1,000 children and adults in costume. It is fun to see everyone in their Halloween costume.

Make sure to look on the door of the business for an orange pumpkin sign. The orange pumpkin sign is an indication that the business is participating. Make sure to visit me at my real estate office. We will have candy to pass out. Stop by The Home Specialists Real Estate Company at 150 N. Main Street on October 31st. See you then!

8Oct/130

Pocatello Idaho Real Estate Market Statistics Third Quarter 2013

Fall is in the air! Another quarter has passed by. The third quarter of 2013 represents the majority of our busy real estates season – the summer months in Pocatello, Idaho. It gives us a good indication of what is happening with our real estate market. Overall, I am very impressed with the sales figures for the past three months. Click on the link and take a look at the Market Statistics.

I like to compare this year to the same time last year. The number of sales show if the market is picking up or slowing down. The good news is that the total number of home sales has really increased! Comparing quarter to quarter, 2013 had 260 home sales compared to 211 in 2012. If we look at the last 12 months we have had 846 home sales now compared to only 691 for the same time frame last year. That is about a 20% increase in total home sales. Wohoo! The other good news is that the average sales price is up. The average sales price is about $7,000 higher now than it was at this time last year. That is about a 5% increase on home values. Wohoo! Things are looking up!

With homes selling, there is a need for new homes to be built. I am pleasantly surprised to see that the number of new home sales in 2013 is double the figure for 2012. So far this year we have sold 43 new homes on the MLS compared to 21 at this time last year.

Although more homes have sold, I noticed that we have more homes on the market now than before. We have 514 homes listed on the MLS now compared to 482 at this time last year. We have had more home sales, but we have not absorbed the inventory. Inventory levels have still increased. The other area where inventory levels have increased is with multi-family listings (duplexes and fourplexes). We have 68 for sale now compared to 36 last year – almost twice the number. That is a bad sign.

Things are looking better. I am curious to see if the trend continues through the last quarter of the year. I anticipate a slow down. Seasonally, the market slows down in the fourth quarter, but the market also feels like it has slowed down with the change in the air. Let’s be glad we had a good third quarter and hope for the best in the last quarter of the year. If you need help buying or selling real estate, or if you have any questions about the Pocatello, Idaho real estate market, please contact Greg Johnston, Realtor.

17Sep/130

Items needed for short sale approval

Short sales are still a very common part of the real estate market. However, many people still do not fully understand what is entailed in a short sale. Here is some information if you are a home seller considering a short sale on your home. This is intended to show you what information your mortgage company may ask for. Every company is different, but this is a good list showing what you need to provide and what your Realtor needs to provide. This information is then used to determine if you qualify for a short sale (Yes "IF" you qualify - not everyone does).

Items provided by you:

A signed letter of authorization allowing us to access the information on your account.
The last two months of your bank statements
The last two years tax returns – full copy with all pages
Copies of last two pay stubs, last years W2s, etc.
A signed current financial statement showing current income and monthly expenses
A signed hardship letter explaining your situation and why you cannot pay the mortgage. Go into great detail (lost job, divorce, death in family, medical bills, etc.).
A letter explaining the condition of the home (and repair bids as needed).

Items provided by us:
A short sale proposal letter
Copy of the listing agreement
Copy of the MLS data sheet and listing history
A market analysis and price opinion of the value of the home
Copy of the offer on the home signed by both buyer and seller
Copy of pre-approval letter for the new buyer

Items provided by others:
Estimated HUD settlement statement from title company
The lender will order an appraisal on the home
Payoff letters if there are other loans on the property
Title report from title company

All information that you provide needs to be true and correct. They do compare what you provide them to items in their file such as your loan application from the time you purchased the home. We may need to provide this to all lien holders on the property. Once we have all of this compiled we will send it to the lender and coordinate the possible short sale. They may not approve a short sale if you move out of the home. Please let us know if you have any questions about this, or need help preparing the information. Keep in mind that the lender is trying to determine if you have the ability to repay this loan, or if you will not be able to. This information will determine that.

If you have questions relating to short sales, and what would be required to complete a short sale on your home for sale in Pocatello, Idaho, please contact me, Greg Johnston, Realtor, at 232-9041.