The "Reality" of Home Improvement Reality Shows 

Who doesn't love watching a good home improvement show on TV?  Based on the proliferation of flipping shows on HGTV, DIY Network, A&E, CNBC, Netflix, etc., there is no shortage of viewership for home renovation programming.   As one who loves everything real estate, I used to watch Bob Villa on This Old House back in the 1980s.  My love of home improvement came largely from my dad, who was always working on some kind of project around the house, or building his own homes.  But it was definitely fueled by Bob Villa and all of the similar programming that followed.  After buying my first home in the early 90s it seemed that there was always some home improvement project occupying my spare time which continued with every subsequent house.  Eventually, Peggy and I decided to make it a business and started buying and renovating homes around the Treasure Valley. 

The popularity of renovation and flipping shows has exploded over the past ten years.  After the Flip This House series during the 2000s, A&E then developed Flipping Vegas, a drama-infused portrayal of a married couple in Vegas making a killing on the deflated real estate market there.  Things really blew up when HGTV jumped into the fray with Flip or Flop, making Tarek and Christina household names.  Flip or Flop eventually became one of the highest rated television programs on cable.  Then along came Chip and Joanna Gaines and their mega-hit, Fixer Upper.  The Gaines' put Waco, Texas on the map, created a business empire, and created a "country home style" that has dominated home design for the past few years.

Now it seems that there is always a flipping show on one channel or another.  I know my DVR is packed with them.  The Flip or Flop franchise now has at least a half - dozen different iterations, mostly in the South.  Add to that, Good Bones, Home Town, Bargain Mansions, Hidden Potential, Flipping Virgins, My First Flip, Renovate to Rent, Desert Flippers, Masters of Flip, Vanilla Ice Project, Zombie House Flipping, Property Brothers, The Deed, etc, etc.  Yikes! 

So what's the problem?  Clearly the demand is there, so programmers are supplying it, right?  The problem in my view is that it is a subset of the biggest blight in the history of American television -- Reality TV.  I recognize that the population loves to watch how others live (insert Kardashians, the Robertsons of Duck Dynasty fame, etc.), or compete (The Voice, The Bachelor, Amazing Race, etc.), or anything else that lets us escape and feel better or worse about ourselves.  Okay, I am as guilty as most -- among my favorite shows are Shark Tank, The Profit, and The Deed.  However, I think it is time to change the name of the genre -- it's time to remove the word "reality". 

 The "reality" is that most of these programs are anything but real.  They are scripted, edited, and created just as most all programming on television.  They are about as real as the WWE.  Real estate programming is no exception.  I used to watch an HGTV program called House Hunters, where a couple shop for a home in a new town with a real estate agent.  The premise is that they see three houses, then have to pick one to buy.  Spoiler Alert!  It is all fake.  After hearing that a friend of a friend was on the program, and that the entire program was filmed after they had purchased their home, I did a little research.  Turns out that after an Entertainment Weekly expose on the program, a spokesman from HGTV admitted the show was completely staged.  So what about the flipping shows?  They can't be fake can they?  Of course they are.  The script is almost always the same:  (1) home is purchased at an auction or otherwise acquired at some ridiculously low price,  (2) our flippers pretend to go through the house for the first time, being grossed out by how disgusting it is, (3) they demo the house by themselves, (4) they do much or most of the renovation themselves (insert staged drama), (5) they stage the house (insert promotional piece pretending to buy materials from ebay, Wayfair, etc.), and (6) they hold an open house where the home sells for above asking price, netting them a ridiculous profit.  Just that simple.  It is honestly no wonder why so many people jump into flipping houses, only to lose their shorts or find out it is much more difficult than it looks. 

The truth is that most of the homes are already owned by the flippers before filming begins.  Then they hire contractors to do the work, while stepping in to film segments of them pretending to demo, tile, paint, etc.  One example:  our Flip or Flop team from Atlanta claims to flip over 100 homes per year.  Do the math; that is a home every three days.  If you think that they are doing even a fraction of the work, you probably think Game of Thrones is a documentary. 

Last year HGTV debuted "Boise Boys" a flipping show here in the Treasure Valley.  I was excited to see flipping highlighted in Boise, and particularly looked forward to potentially learning from someone with more experience in our same market.  Instead, we get more "made for HGTV programming".  The premise is "best friends" Clint (contractor) and Luke (designer), dubbed the odd couple of flipping and/or the Bert and Ernie of renovation, team up to flip houses in Boise.  The true story has Clint as a Fort Worth native, with a background as an attorney there, who competed on another reality show, The Apprentice, in 2011 finishing as runner-up.  Apparently, Clint started shopping for another "reality opportunity" following his Apprentice appearance, and eventually pitching a flipping show to HGTV.  He moved to Boise about three years ago.  Enter Luke, a professional musician, who grew up in the area, and already had some investment properties.  So already it appeared that the premise was a falsehood.

One of our sub-contractors did some work on one of the Boise Boys renovations and related what a disorganized mess it was.  He also confirmed the staged, scripted, and yes, fake nature of the process.  We watched with interest when the first few episodes aired, then looked up the properties on the MLS to see how well they did.   After bragging about immediate sales for big profits on a couple of the early episodes we found that neither of the houses had sold.  One was finally pulled off the market, and the other eventually sold seven month later after multiple price reductions. 

Maybe the lesson here is don't believe everything you see on TV.  Or maybe it is just that one persons reality is everyone else's scripted fantasy.  Perhaps there should be a disclaimer at the beginning of each episode that says "may contain falsehoods, scripted segments, and downright lies" or perhaps it should state "edited to remove truth" So, call it "fake TV" or "pretend TV" but please stop calling it reality TV.

I'm pretty sure that Bob Villa didn't "pretend" to replace a double hung window, or build a deck.  How did we, as a society, get so accepting of being lied to?  Undoubtedly, I will continue to watch the multitude of renovation programs that are offered up by HGTV and the like. I just won't enjoy it nearly as much.

Real Estate Bubble in Boise?  Not Yet!

If you follow national real estate trends you have probably heard that markets are cooling off in many parts of the country.  From Seattle to San Jose, and from San Diego to Denver, western metro areas are seeing increases in homes for sale and a general slowing in buying activity.  So what does this mean for the Treasure Valley real estate market?  Is Boise real estate ready to cool off?  Not likely! 

There are a number of factors that influence home sales in any particular market.  Obviously, two of the major factors are supply and demand.  Real estate experts generally agree that a stable real estate market exists when there is a five to six month supply of homes.  In that scenario, there exists a slow, steady increase in prices and something of an equilibrium in bargaining power between buyers and sellers -- thus supply and demand are about equal.  Typically, when the supply is higher than a six month supply prices will drop.  Inversely, when supply is lower than five months prices rise.  The lower the supply, the faster the price increase.  So, how does that translate to the Treasure Valley?  Boise has been hovering near a one month supply for the past three years!  The result has been rapid climb in home prices; current median home prices are nearly 18% higher than last October. 

Surely, we can't sustain this type of growth indefinitely, right?  Certainly, that is true, but basic economics tells us that as long as demand is greater than supply, prices will rise.  The supply of homes nationwide has been slow to respond to increasing demand.  Over the past ten years (since the great recession of 2008-2009) new home construction has been at its lowest level in 60 years.  Even in the Treasure Valley where we have seen a boom in construction, builders haven't been able to keep up with demand.  In a recent statement, Boise mayor Dave Bieter said "Our figures show we need to build about a thousand units a year in the city of Boise to keep the kind of demand we are showing."  The reality is that we have only been adding about two hundred units per year for the past five years. 

So why are some of the larger markets cooling, and why not Boise?  Are they doing a better job of adding to the supply side?  The short answer is no.  There are a number of factors that affect demand -- affordability (including interest rates and taxes), jobs, location -- to name a few.  In markets such as Seattle, San Jose, and Los Angeles, the majority of the population has been priced out of the housing market forcing people to either rent or move further away from metro centers.  In San Francisco, for example, the  median home price in over $1 million.  As prices rise, fewer can afford to buy, demand is less for those high-priced homes, so supply increases and prices fall.  To further stir the mix, experts predict the new tax laws will impact affordability, particularly on higher-priced homes. Couple that with rising interest rates and the high end of the real estate market becomes a whole lot less affordable even for the more affluent. 

Won't the same thing happen in the Treasure Valley?  Prices have certainly climbed and affordability has become an issue for many.  Boise has been experiencing rapid appreciation for several years.  As more and more people are priced out of Boise, buyers have moved to neighboring communities.  Meridian has seen the largest boom in growth and home prices, followed by Nampa, Caldwell, Star, Kuna, and Middleton, all experiencing double-digit price increases over the past year.   Also contributing to the affordability challenge is the lack of "starter home" construction.  Builders go where they can make the most money, and in Boise that has been at the top of the market.  According to the State of the Nation Housing Report, 65% of the homes for sale in Boise are at the upper end of the market.  Who can afford these higher priced homes?  Look to where the buyers are coming from.  In case you missed it, Idaho is the fastest growing state in the country. The in-migration of new residents totaled more than 80,000 in 2016, of which 17,019 were from California, 9,303 from Washington, 8,455 from foreign countries, 7,405 from Utah, and sizable numbers from other western states such as Arizona, Nevada, Colorado and Texas.  In the case of California and Washington, many are coming from large metro areas, selling homes at highly inflated prices, and paying cash for homes in the Treasure Valley.  In some ways, it is like playing with Monopoly money.

Is there an end to all of this?  Of course.  If nothing else, history has taught us that real estate market are cyclical.  Many would say that what goes up must come down, or in the case of home prices at least stabilize.  Demand will slow, supply will grow, and the run-up in prices will seek a more moderate level.  Will it be in 2019?  2020?  If you know someone who can see the future, send them my way.  In the meantime, my best guess based on the extremely short supply and continuing demand is that the Treasure Valley will continue to see increasing home prices well into next year. 

Creatures of Comfort

Americans, and especially Idahoans, are creatures of comfort.  The West is all about wide open spaces, lots of elbow room, and comfortable living. Compared to much of the world there is a premium placed on space and comfort here. 

Peggy and I love to travel.  As our kids have grown and moved on to pursue their educations, we have taken the opportunity to gradually see the world.  It is fascinating to see how people live in other countries.   Since we make our living with real estate, one of the things we enjoy most is going into homes, looking at construction methods and materials, and experiencing a different lifestyle.  This year our daughter took advantage of the opportunity to study abroad in Heidelberg, Germany.  We made the trek to visit her this fall and while we were there we took in some of the sites in Germany, Austria, and Switzerland. 

If you haven't visited Europe I highly recommend it.  It is a great opportunity to experience other cultures and at the same time appreciate what we have in the US.  One of the striking differences is the concept of space.  In America, and in particular Idaho, we love our space.  We live in big houses, have big yards, and drive big trucks.  In Europe, space seems to come at a premium.  Houses are small, yards are tiny, and forget about finding a truck of any size! 

Why the disparity in the sizes  of homes, cars, streets, etc. between Europe and the US?  There are a number of reasons/theories (and my opinions):

History.  Most European cities were developed more than 100 years ago, long before the advent of motor vehicles.  Consequently, cities developed in a more compact manner.  The necessity of walking to get everywhere made for narrow streets and close neighbors.  Compare that to the US, where most of our cities have grown up over the course of the past 100 years, and much of our development has been directly linked to our dependence on our automobiles.

Go back even further in time and note that only the wealthiest (royalty, upper class) owned land.  Everyone else leased from (were taxed by) rich land owners.  While that has changed over time, land is still relatively expensive in much of Europe. On the other hand, our immigrant ancestors came to America and were encouraged to gobble up large tracts of land.  Western expansion was a giant "land grab", with large parcels of land given freely to those brave enough to settle it. 

Culture.  Europeans seem to embrace a more simplistic style of living.   Homes are small but functional,  cars are small and economical, and the people seem to have a different attitude toward space.  However, it may not all be by choice.  Recent surveys in the UK indicate that residents there want larger homes, more space,  and newer construction. However, Great Britain is one of the only countries without national minimum  space standards for new homes.  Thus, builders continue to build what is "traditional" and more importantly, more profitable, which translates into smaller homes.  In the US, we crave space.  Average home prices have grown from an average of 800 square feet in the 40's to over 2000 square feet today.  A typical wish list today includes large kitchens, open concepts, great rooms, and large master suites.  Space, space and more space.  Americans want comfort and are willing to pay up for it.  In Idaho, we also crave outdoor space with large front yards, back yards, patios, decks, greenbelts, and other "open spaces" in our subdivisions.

Economics.  Another key factor to home sizes is financial.  In the US we are blessed with more discretionary income than much of the world.  Tax rates Europe are significantly higher than in the US.  Therefore, the average European has less to spend on building, buying, heating and maintaining a larger house.  In addition, new construction in some European countries is limited and new home construction is highly regulated, making the development of single family homes substantially more expensive.  Also, fuel prices in Europe are much higher than in America, resulting in higher construction and heating costs -- thus encouraging smaller homes to heat (and also resulting in smaller, more fuel efficient cars). 

Whatever the reason, it is apparent that we put more of a premium on space in the US.  But what about within the US?  It seems the further west you look, the more space we have and want.  Of the ten states with the largest average home sizes, six are in the West -- Idaho, Utah, Colorado, Wyoming, Montana, and Washington.  Note that Idaho, Utah, Washington, and Colorado are all at the top of the list of fastest growing states as well.  Coincidence?  I think not. 

While we were travelling this fall we fantasized about retiring or buying a second home in some foreign land.  But after a couple of weeks of small, spartan rooms with two single beds pushed together and phone-booth-sized showers, along with tiny econo-box rental cars, we welcomed driving home from the airport in our big truck to our comfortable home on a big chunk of land.  Yes, we  love our space, and that is the very reason we call Idaho home.   

Welcome to Idaho -- Now be a good neighbor!

Idaho has become an extremely popular place to live.  There is an average of 1000 people per month moving to Ada County alone.  That does not include the growth in the surrounding counties.  Largely, I am pro-growth, but it is certainly a double-edged sword.  Population growth means more money being infused into our local economy resulting in better health care, better schools, more shopping options, and higher property values.  On the other hand, it also results in more traffic, longer commutes, more congestion, and higher property costs.  The fact is, our beautiful state is changing -- like it or not.  The one change that I hate to see is not physical, it is attitudinal.

People move for a variety of reasons.  Some move for job or business opportunities, some to be closer to family, and some for a different quality of life.  For a long time, Idaho was a well-kept secret.  Many years ago as I travelled to other parts of the country and people asked where I lived, the conversation went something like:

 "I live in Idaho."  "Iowa?"  "No, Idaho."  "Isn't that somewhere in the Midwest?"  "No, it is in the Northwest, next to Oregon and Washington."  "Oh, yeah, there are lots of mountains there and  everybody rides horses, right?"

The days of Idaho naivety are long gone.  It seems everyone knows all about Idaho and usually knows someone who has moved here.  Our little secret is no longer a secret.  "Best Places to Live" lists, friends moving here, word of mouth; however people are hearing about us, they are hearing -- and listening.  We are the fastest growing state, at three times the national rate!

One of the things that we hear over and over from new Idaho residents is how nice everyone is here.  Ask someone who is new to our area what they like about it, and one of the frequent comments is, "people are so friendly!"  It is one of the things that we take for granted, but it is an attitude that, in part, draws people to move here.  So what's the problem?  It seems that many of our thousands of new residents forget why they move here shortly after unpacking their moving boxes. 

For example, driving here is starting to feel a lot more like driving in So Cal every day.  I have been cut-off, flipped off, honked at, and yelled at more this past year than ever before.  I get it, more traffic = less patience = less tolerance.  It also seems that people in my neighborhood are getting less "neighborly".  One evening a couple of weeks ago, we decided to light up our fire pit and eat our dinner outside around the fire.  We live in a rural neighborhood in Star and enjoy spending time in our back yard.  Anyway, I went inside to get a beer and heard someone banging on the front window.  I went to the window and a woman was screaming "you have a fire in your back yard!".  I replied, "Yes, I know.  I started it.  It is in our fire pit, and we are sitting around enjoying it."  She seemed agitated but walked back up the street to her house (one of our new neighbors).  About 10 minutes later we heard fire trucks being dispatched from Star.  Sure enough, they rolled onto our street after about 15 minutes and stopped in front of our new neighbors house.  We watched as she gestured toward our house, the firemen shined flashlights in our direction, then got back in their truck and returned to the station -- presumably after informing her that is was OK for us to enjoy our fire pit! 

I was actively involved with a homeowners association a few years ago and was amazed at how quickly new members jumped in, ran for office and then tried to change how things were done.  A regular comment, was "my HOA in (fill in the state) did things this way, so we need to do it that way here."

The question that comes to mind; what are people moving away from?  It seems that there is a rush to change the things that made people want to move here in the first place.  Understandably, the larger the population, the more we lose the "small town feel".  I just wish we could maintain the small-town attitude.  I love living in Idaho.  If you love it too, can I make a couple of suggestions?  Be a good neighbor.  Be a courteous driver.  If you like how friendly people are here, be friendly in return.  We all know that the landscape of our state will continue to change.  Let's not change the attitude.

Idaho Schools - Better Than You Have Heard?

Do Idaho Schools get a bad rap?  You may have heard the ads, particularly at election time, about how poor our schools are in Idaho.  I don't think anyone is naive enough to believe everything stated as "fact"  in political ads.  There is an old adage that figures lie and liars figure, and that is certainly true during a heated election.  While I certainly agree that our schools need attention, lately  I have been questioning whether things are as bleak as the ads make it sound.  Recent ads make claims that Idaho ranks 48th in education.  Where do those numbers originate?  Are they accurate?  It seems that the source of this ranking is Education Week, an independent news organization that covers K-12 education. 

Let's look behind Education Week's numbers.  First of all, for 2018 Education Week has Idaho at 45th, not 48th.  Not stellar, but let's dig deeper.  Their rankings are based on three factors:  Chance for Success, School Finance, and K-12 Achievement.   So where does Idaho score in these areas?  In Chance for Success, Idaho ranks 36th nationally; in School Finance the ranking is 49th; for K-12 Achievement, Idaho ranks 24th.  So, Idaho does a poor job in spending money on our schools and teachers.  A corresponding study indicates that Idaho is near the bottom in average wages,  so is it surprising that we are near the bottom in teacher pay?

There are a number of other publications that rank schools nationally.  US News and World Report, which also publishes Best States rankings annually, ranks Idaho Education as #30.  Specific underlying US News rankings has Idaho at #25 in PreK-12 Education, #5 in College Readiness, #23 in NAEP math scores, and #13 in NAEP reading scores. Certainly not at the top, but not at the bottom either. 

So what about the Treasure Valley?  Those of us with kids in school who live here or are considering a move here want to know how it affects us personally.  Recent studies have confirmed what most people would suspect -- affluence vs. poverty has a big impact on schools.  Idaho's rankings are directly affected by the economic strength of individual areas within the state.  The State of Idaho Department of Education recently identified the lowest-performing and highest-performing public schools.  Not surprisingly, of the 29 schools on the low-performing list, 23 are designated as Title 1 Schools, a designation for those schools with a high number of low-income students.  Most of these schools are located in rural areas of the state.  The only schools on the list from the Treasure Valley are "alternative schools" for students struggling in a regular public school environment -- Crossroads Middle School and Pathways Middle School in Meridian, and Riverview Academy Alternative School in Caldwell.  Conversely, the State Department of Education identified 44 of the top high schools in the state, based on scoring in 90th percentile in math and English scores, graduation rates, and advance education opportunities.  West Ada School District which serves Meridian, Eagle and Star had the highest number of top performing schools in the state.  What's the bottom line?  Money matters!  As the Treasure Valley continues to grow and prosper, the school in Southwest Idaho will continue to improve. 

 Personally, we moved to Idaho for a better environment to live and raise our kids.  Walking onto the campus of my daughters Southern California middle school, surrounded by a chain-link fence, and monitored by guards, made me realize that it was not where I wanted her to be.  That is not an indictment on California schools -- many are among the best in the country.  However, there is a reason Idaho continues to be on most "Best Places to Live" lists.  We have never regretted our move to Idaho.  Our kids passed through the Idaho school system with one common result: they received an education commensurate with the effort they put in.  We now have one studying in New York, one studying abroad in Germany (through BSU), one studying business at U of I, and one graduating from high school in May with plans to attend U of I.  Not too bad for such a "low-ranking state". 

In my opinion, a child's education begins and ends at home.  If we are relying on the public education system to fulfill all of our children's education needs, we may be disappointed in the result. That said, we have plenty of room for improvement, both statewide and nationwide.  We need to spend more money on our schools, and provide better incomes for our teachers.  I understand the purpose of the political ads, the surveys, and the "Don't Fail Idaho" ad campaigns.  We need to focus on education, and that focus most often comes in the form of more money.  But I am confident that as we grow, we will improve.  Incomes in Idaho are rising and more tax-payers are moving in every day.  With growth comes progress.

What's the take-away?  While Idaho schools definitely have room for improvement, they certainly aren't as bad as advertised.  And it goes without saying that you can't believe everything you hear on a sponsored political ad!

City Profile -- Payette

This month we profile the city of Payette.  Located on the western edge of the state along the river of the same name, Payette is a sleepy community of about 7500 people (the 2010 census lists 7433 residents).  It is the county seat of Payette County, the smallest county in Idaho, which also includes the cities of Fruitland and New Plymouth.  Located on the west end of the Treasure Valley, Payette is 60 miles (one hour drive) from downtown Boise.

History

The first  settlement in the area was established at the mouth of the Payette River as a work camp for the construction of the Oregon Short Line Railroad.  Originally named "Boomerang"  the site was set up with sawmills to cut railroad ties from logs floated down the river.  After completion of the railroad in 1884, the settlement was moved up the river to its present site.  In 1891 Boomerang was renamed Payette in honor of Francios Payette, a French fur trader who was one of the first explorers of the area and was later the head of the Fort Boise trading post for the Hudson's Bay Company. 

Payette grew steadily in the early 1900s, and by 1920 had approximately 2500 residents.  An excerpt from History of Idaho Gem of the Mountains published in 1920 stated "Payette has two strong banks, two weekly newspapers, a canning factory that ships about seventy-five carloads of canned peas and fruits every year, a sawmill, brick and vinegar factories, a plant for evaporating fruit, two flour mills, waterworks, electric light plant, thirteen churches, four public school buildings, a public library and claims the finest Young Men's Christian Association building and civic center of any city of similar size in the United States.  According to statements of the railroad company, Payette ships more fruit and poultry than any other point on the Oregon Short Line in Idaho. 

 Payette County was partitioned off from Canyon County in 1917 and the city of Payette was named the county seat.  After the early "boom" of Payette, growth slowed. After slow, steady growth until 2009, the population of Payette county peaked and has remained relatively stable over the past ten years.   Today the largest employers in Payette county are utilities, schools, and fruit packing plants (Partners Produce, Dickinson Frozen Foods, and Seneca Foods). 

Homes in Payette

Payette has been developed steadily over the past 120 years with "spurts" of growth in the 40s, 70s and 90s.  A breakdown by age of existing homes shows:

            Decade Built                           Number of Homes Built

               pre 1920                                           507

               1920s                                                161

               1930s                                                185

               1940s                                                425

               1950s                                                254

               1960s                                                176

               1970s                                                468

               1980s                                                78

               1990s                                                348

               2000s                                                254

               2010 to present                                92

As illustrated, there is a fairly even mix in ages of homes since the early establishment of Payette.  There is some limited new home construction, both in-fill and small custom home developments, but it is very slow compared to the rapid growth in the Western and Central Treasure Valley over the past nine years.  Homes in Payette range in size from small one-bedroom bungalows to large, stately, historic homes, to ranch-style homes on acreage. 

Like so much of the Treasure Valley, there is a definite shortage of inventory in Payette.  As of today, there are only 18 active listings ranging in price from $48,000 to $369,000 with sizes of 720 to 3600 square feet.  There have been 132 homes sold in Payette year-to-date, with an average sale price of $158,046 and an average of 44 days on the market.  Payette homes are selling at an average of $100 per square foot. 

Personal View of Payette

Due to Payette's early success and growth in the first quarter of the 1900s, the city has a number of beautiful, quaint old homes, many of which have been lovingly restored.  We had the opportunity to buy and sell a historic home in Payette last year, the original mayor of Payette's "mansion".  We ended up selling it before completing a renovation on it, but the current owners have done an amazing job of restoring it and bringing back much of its original glory.  We really like the "feel" of Payette and continue to look for another project there.  It has much more of a historic presence than its neighboring cities. 

Due to its location, Payette will likely continue to be a "sleepy" community.  The average age of its residents is higher than the state average as it is a popular community with retirees.  Also, the lack of major industry makes it a bedroom community for those working in Ontario or other neighboring areas.  Residents of Payette also tend to shop in Ontario due to its close proximity and lack of sales tax, so Payette does not have an abundance of shopping centers.  We spoke with a Payette Chamber of Commerce representative a couple of times while we were there and were told that the city is not aggressive in bringing in new industry, preferring the slow pace that currently exists. 

In summary, Payette is  a great little city with tons of historic charm, but with little growth.  If you are seeking a quiet, home-town atmosphere, a little off the beaten path and outside of the high-growth areas of the Eastern and Central Treasure Valley, Payette may just be the place for you!

Check our property listings for current homes for sale in Payette.

Flipping in Boise -- A primer on flipping homes in Idaho (or most anywhere)

So you think you want to flip a house...

You've been watching Flip or Flop and you say to yourself "that looks easy; what a fun way to make money!"  Maybe you have some construction knowledge or an eye for design and want to try your hand at renovation.   We get it, we were bitten by the flipping bug about six years ago.  We often get questions about flipping houses, so we are sharing some of the things you will want to consider before buying that fixer-upper.

Flipping can be an exciting, stressful, rewarding, and fun career or hobby depending you your level of involvement.  Before you get your Chip & Joanna Gaines on, there are a number of questions you should answer:

Where do I find properties? A wise man once said "you make money on real estate when you buy it, not when you sell it."  That seems counterintuitive, but the truth is if  you a buy a piece of real estate right (ie. cheap to the market) you are already ahead of the game.

v  Enlist the help of a good real estate agent - find an agent that knows what you are looking for.  Agents see properties as soon as they hit the MLS, and sometimes before.  Good properties don't last long, particularly in hot markets such as the one we are currently experiencing, and a good agent can often find just what you are seeking in a property.

v  Go to Auctions - Bank owned properties (REOs), estate liquidations, and even some conventional sellers use auction companies to sell properties.  There are different types of auction companies, depending on the type of property.

§  Online Auctions - Banks tend to use online auctions for bank owned properties.  Sites such as Auction.com, Hubzu.com, and Xome.com are some of the national companies.  There are also local online auctions depending on your area.  Most of the properties sold on these sites have a reserve.

§  On-site Auctions - Local Auction companies hold auctions, often on the front lawn of the property, for estate sales or even some traditional sellers.  Sales may be held as "absolute" which means no reserve, or "owner confirmation" which means that the seller must approve the high bid.

v  Attend Foreclosure Sales - When properties go through the foreclosure process they are often sold at foreclosure sales.  These may take place on the courthouse steps of the county courthouse where the property is located.  Alternatively, the bank may utilize an auction company to hold the foreclosure sale at a hotel or other venue.  NOTE:  Foreclosure sales require 100% payment at the time of sale.  Payment is usually made via cashier's checks at the time the bid is awarded.

v  Detective Work often Pays - Knock on doors, talk to neighbors, and let people know you are looking.  Drive through neighborhoods and look for houses that look neglected or vacant.  Many flippers send out postcards or mailers offering to buy houses. 

Where is the money coming from?  There are a couple of adages that hold true in buying distressed properties-- 'Cash is king" and "He who hesitates is lost".  In this market if you find a good target property, time is of the essence.  You need to make a decision quickly, and present the best offer possible.  Sellers always prefer cash offers, void of inspection contingencies or other conditions.  If you are planning to finance the purchase of a flip make sure you have a pre-approval letter but understand that you may be less desirable than a cash / quick close buyer.

How do I decide on a house?  So you have a target property or properties in mind and you are trying to decide whether or not it makes sense to put together an offer. 

v  Determine your budget- make certain that you have enough money or credit available to complete the job.  Novice flippers often get in over their heads and run out of money before the job  is completed and are forced to unload a property with no gain, or even a loss.            

v  Estimate your costs before you buy - it is better to walk away from a prospective project than to lose money on it. 

Ø  Write an estimate - We go room by room and write an estimate sheet for each area.  If you aren't sure what something might cost, or if there are unknowns, enlist trades.  Get to know a good plumber, electrician, roofer, carpenter, drywall hanger, tiler, flooring specialist, etc. , and have them give you estimates. 

Ø  Determine how much you are willing to do yourself - Are you planning to do all of the painting?  Do you have carpentry skills?  Maybe you have always wanted to try your hand at setting tile.  Obviously, the more work you can do the less you need to pay someone else to do it.  Less labor cost = more profit.  However, understand that an expert can do things better and more quickly than a beginner, and often it is well worth the expense to hire things done.

Ø  Create a materials list - For items that don't involve trades, go room by room and determine the cost of each item.  Be as thorough as possible.  Don't forget small things such as hardware, lighting, etc.

Ø  Add 25% - Whatever number you come up with for the estimated total cost of the project, add another 25%.  Notice that on your favorite flipping show they almost always exceed their budget; and they are experienced at this!  You will very likely run into unforeseen expenditures, higher than expected bills from trades, and items you left off your estimate. 

Ø  Figure out your projected sales expenses - It costs money to sell a house.  If you are using an agent plan on 6% commission (3% for each side), plus about 1% for typical closing costs.

Ø  Determine your desired profit - You are in this to make money, not just for the "fun and excitement", so determine your break-even and then add in what you expect to make for your trouble and hard work.  I know flippers that won't touch a project for less than 30% profit.  I prefer to determine a dollar amount.

Ø  Determine the projected market value - Look at comps (comparable properties) in the area of the prospective project to determine an approximate sale price once you have turned that dump into a castle. 

v  Pull the trigger - If your projected sales price exceeds all of your planned expenses and profit margin, put together your best offer and get it under contract. 

What type of renovation should I do?  Now that you have a house, decide what you want your project look like when you are done.  Some of these decisions need to happen during the budgeting process if you are doing major renovation.   Am I doing major renovation or cosmetic updates?  What work will require permits?  Are there items that require lead-time (custom cabinets, etc.)? 

v  Know your market - How long are homes in your area sitting on the market?  What types of homes are in demand?  Is the market in the area cyclical?  What is the current inventory?  These are all factors to consider when determining how extensive (or time consuming) a project should be.

v  Determine the time table - Will your project take three weeks or six months?  Generally, the longer a project takes the more it costs.  Carrying costs such as interest (if you are using credit), taxes, insurance, and utilities all add up and eat into potential profits.  On the other hand, if you know that home demand and prices spike in the Spring and you buy the project in the Fall, you may decide to take your time and take advantage of the better market. 

v  Know the trends - Styles change.  What was popular in homes 20 years ago or even 2 years ago is different than what is popular today.  Closed-off rooms have given way to "open concept" floor plans.  Glass tile has been replaced with subway tile.  Hardwood floors have supplanted carpet.  Visit model  homes.  Tour your local "parade of homes" to see what home builders are doing.  See what colors and styles are popular now, and use them in your renovation.

v  Identify your buyer pool - If you are renovating a large custom home in an upscale neighborhood your potential buyers are far different than a first time buyer of a small 3/2 in a tract subdivision.  In a budget-friendly, small, entry level home shower inserts, vinyl floors, and off-the-shelf cabinets might be fine.  However, people will often pay-up for better finishes, and they will expect them as the price-point increases.  However, be mindful of the neighborhood.  It is good practice not to over-improve nor under-improve, and it may hurt you when it comes time to sell.

v  Renovate for the masses - So you've always wanted to do a feature wall with gold-inlay wallpaper, or you have always liked the idea of purple back splash tile with ducks and geese on them.  It is true that there is no accounting for taste.  However, don't let your personal tastes cloud your judgment!  Example:  We passed on a house a couple of years ago that could have been a good flip, but opted for another property.  It was scooped up by a first-time flipper at a good price, so we kept an eye on the renovation.  The flipper put a substantial amount of money into the house including some VERY taste-specific design ideas.  Bottom line -- it was ugly!  The house sat on the market for over a year and required multiple price reductions (in a hot market) to get it sold.  The lesson:  appeal to the largest possible pool of buyers.  Just because you like some quirky design idea doesn't make it appealing to others. 

How do I get it sold?  Your frog now looks like a prince and you are ready to cash in. 

v  How  to price your home - There are a couple schools of thought as it applies to pricing a freshly renovated home.  First, recognize that it is now one of the best -looking homes in the neighborhood and price high.  It may take a while to sell, but your profit might be better.  The downside is that it may linger on the market, become a stale listing and require price reductions.  Second, know that you have a great house, but price it more moderately.  The idea is to spark tremendous interest and potentially drive the price up with multiple offers.  The downside here is that you may risk selling it too cheap if you underestimate the value. 

v  Staging is almost always worth it - Face it, a home always looks more inviting if it has furnishings.  It may be a hassle and an additional expense, but we believe that staged homes sell faster and at a higher price.

v  Hold an open house - Your neighbors have been watching your progress and they will want to see it...and it is fun to show it off.  Also, people talk.  We have pre-sold houses before the flip was completed to people doing a drive-by in the neighborhood. 

If you have done a quality renovation and your project is fairly priced it will sell, and in this market it will likely sell fast.

We love flipping houses and we love talking about flipping houses.  If you  have any questions or would just like to share your experiences feel free to comment on our blog.

You can check out some of our recent flip/renovation projects, including before and after pictures at https://www.allredblack.com/flips/  

One of the cool things about travelling to other parts of the world is seeing the architecture and construction of old buildings.  The Unites States is such a "young" country, there really aren't any buildings that date more than a couple of hundred years old, particularly in the west.  In Boise, our oldest buildings were built in the late 1800s, so it is difficult to have an appreciation for construction that pre-dates the settling and formation of our country. 

We try to make a trip to Europe one of our annual events.  It is awe inspiring to experience the scenic beauty and areas steeped in history while travelling in "the old country".  Every city has buildings, churches, cathedrals, and often castles that are hundreds of years old, some dating back more than a thousand years.  Even though many of these structures have been damaged and often destroyed in wars and other battles, there are countless examples of buildings that have survived intact for hundreds of years. 

Since we make a living renovating and restoring homes, it is always fascinating to see different styles of construction and the types of materials used.  As a people, we have become such a throw-away society, particularly in the US.  We largely buy things knowing that they will be replaced within a few years.  Appliances used to last 15 to 20 years -- now it seems that you are lucky to get 5 years before they break down.  Computer chips have made things easier to use, but at the same time more disposable.  Likewise, our construction methods have changed. 

Throughout history, humans have used the natural materials available to us.  From mud huts, to adobe buildings, to stone pyramids, to ice igloos, we build with what we have.  In the US, where we seem to have an endless supply of timber, we have historically framed homes with wood, then used siding, etc to cover the exteriors.  But, like most everything else these days, the quality of home construction overall seems to have diminished.  As an attorney in California, I was actively involved in construction defect litigation.  During the 80s and 90s, large builders threw up thousands of homes with little regard for quality.  With the primary focus of maximizing profits, builders cut corners, used inferior products, and relied on their insurance carriers to pick up the bill when things went sideways.  As a result here have been changes to the laws regulating builders, and some of those issues have been addressed.  However, the adage that "they just don't build things like they used to" certainly holds true today. 

As flippers, we see all types of construction.  The "bones" of many homes built in the past 40 years often may be inferior to homes built many years earlier.  Why?  It all comes down to money.  As building materials have become more and more expensive, less costly alternatives have become viable options. The wood siding of the 40s and 50s, and brick homes of the 60s and 70s have largely given way to vinyl or fiber board siding.  This is not to say that standards have not improved --  we have become much more energy efficient, with utilization of better insulation, heating and cooling systems, and roofing materials.  But will the homes we build today stand the test of time? 

We were fortunate to have the opportunity to travel through Italy recently.  While walking through the Roman forum and later the streets of Pompeii, I was struck with how well preserved the buildings were.  Many of these structures date back to the 7th century BC, nearly 3000 years ago.  The artwork on the walls is still visible, as are the tile mosaic floors.  The stone walls are intact, including marble and travertine steps and walkways.  It truly is remarkable that the ravages of time, weather, wars, and conflicts have not wiped away all evidence of how people lived.  In other parts of Europe, residents live in castles and other buildings that are often date more than 500 years old, and some date more than 1000 years (obviously with some modern renovation over time).  Is it a function of better materials or better construction?  Fine stone is so commonplace in Italy, along the northern coast of Tuscany it is common to see a jetty made entirely from boulders of Carrara marble.  Travertine boulders litter the shores of Croatia and its many islands.  To think of the difference in building materials over the past hundreds of years, it is reminiscent of the Three Little Pigs and their homes of straw, sticks, and bricks.

In the US, it seems commonplace to have little regard for the history of homes.  If it is old, we often tear it down and build new.  At the very least we gut and modernize.  Flipping has become a cottage trade, as everyone wants new, but with "character".  We put old-style elements in new home construction (ship lap anyone?), or put new modern touches in older homes. 

So will our homes today stand the test of time?  There will always be a trade-off between quality and price.  And as my real-estate-expert wife always reminds me, "there is a price point for every buyer", from first time buyers to ultra-luxury home purchasers.  In most cases, it is true that you get what you pay for.  But does the difference in price reflect better quality of construction?  Does a high-end custom home have better bones than a basic tract house?  Will any of our homes still be standing 500 or more years from now?  Only time will tell!

Idaho designated as the fastest growing state?  No surprise here!

According the US Census Bureau, Idaho jumped to the top of the growth chart for the period of July 1, 2016 to July 1, 2017...not much of surprise to anyone living in the Treasure Valley!  On any given day, it seems that one in five cars has an out-of-state license plate.  Okay, maybe that is an exaggeration, but there is no denying the increase in traffic on I-84,  State Street, Chinden, and Eagle Road over the past year.  New home communities are popping up everywhere, particularly in the open fields of Meridian that were once farmland.

Idaho grew 2.2% for the 12-month period ending July 1, 2017.  That doesn't sound like much, but it equates to about 37,000 more people, and we were the only state with a growth rate above 2%!  Where are people landing?  Seven of the ten fastest growing Idaho cities are right here in the Treasure Valley.  One through five, in order of growth percentage are Star, Meridian, Kuna, Middleton, and Eagle.  Caldwell and Nampa come in at numbers eight and ten respectively. 

Why the migration to Idaho? First, it is not just Idaho seeing the growth, it is the west in general.  Nevada, Utah and Washington made the top five in percentage growth, with Oregon and Colorado finishing in the top ten.  But Idaho finished first, and those of us that call this beautiful state home have a pretty good idea why.  Boise and Meridian are repeatedly at or near the top of "best places to live" lists, so the people that track that sort of thing have a fairly good grasp on why as well.

·         Employment - Idaho's unemployment rate is 2.9%, fifth lowest in the country

·         Cost of Living - US News and World Report puts Idaho at seventh lowest

·         Low Crime Rate - Idaho comes in at fourth safest state per US News and World Report

·         Quality of Life -  A nebulous statistic at best, but Boise consistently ranks in the top 10

All those things are well and good, but at the top of my list is...THE GREAT OUTDOORS!  Where else in the country are you within an hour's drive of hiking, boating, skiing, rafting, kayaking, fishing, hunting, bird watching,  or just soaking up the 200+ days of sun we average? 

The end result is rapid growth now.  So what about the future?  The Census Bureau predicts that Idaho will grow 1.4% annually through 2025, to a total population of more than 1.9 million people.    That's about 225,000 more people in the next eight years, most of them coming to the Treasure Valley.  That is either exciting or frightening, depending on your viewpoint.   Business owners should be thrilled!  More people means more consumers -- buying food, clothing, entertainment, cars, etc.  More people will need health care, and more people will need services.  The bottom line is that more people translates to a boost in the economy and more jobs.  The downside to growth is more traffic, more congestion, and usually higher prices (open up that old economics book and reference 'supply and demand').

This influx of people into Idaho has one more dramatic effect -- on HOUSING! . If you currently own a home in Idaho be prepared for your home values to rise.  We have already seen tremendous growth and record home values in 2017.  The trend will continue in 2018.  It is certainly a seller's market, and inventories are at historic lows.  On the other hand, it is still a great time to buy.  Interest rates remain low and home prices are projected to rise further over the coming years, so the time is right for first time home buyers  or those needing to move up.  Rents are also rising and there is a shortage of rentals available in many areas, thus it is a great opportunity for accumulating rental properties. 

 Our secret is out ... Idaho is indeed a great place to live (and to move to)!   

Welcome to the Allred-Black Real Estate Blog!

As we kick off our blog, in conjunction with the launch of our new website, we welcome all to read and post comments.  Our plan for this blog is to educate, inspire, and entertain.  While the title of our blog includes "real estate" we will undoubtedly include subjects that stray from just real estate and may include community information, economic trends, area recreation, upcoming entertainment in the valley, personal stories, and opinions on nearly everything.

We hope that it will be as much fun to read as it will be for us to write.  We welcome your feedback and any blog ideas you might have.

Enjoy!