Any Boise folks' thoughts on this write-up?

Question

https://fortune.com/2022/07/20...

From the perspective of an investor, I'm thinking that selling my home in the Boise area now...then buying something less expensive (but hopefully equal to what I have now in terms of size/location) in a year or two is preferable.

Thoughts?

Anna Strausbaugh · Answer

@Aaron Akins it's true we are starting to see prices here in Boise slide a little and as the article states. Boise is still a great market though with steadily increasing rental rates. I'm assuming the house you are referring to is a rental (or are you talking about your primary?). You probably have a great interest rate on it and got it a while ago before prices went nuts, so why not keep it and get great cash flow on it? I'd be interested to hear how the numbers would compare for that property being a rental vs. one you plan to buy with the cash you get from selling it.

I work with tons of investors and the sentiment I hear from many of the long term buy and hold Investors (myself included) is that I wish I had bought more properties and sold fewer of them. Boise is not going to crash, but if it does, just have patience. Because the values will return to these peak levels one day and you'll be glad you have the interest rate on that house that you do and years of cash flow from it. Having patience with market fluctuations is the key to being a good long term buy and hold investor. Don't freak out about short term equity losses (and trying to sell fast to squeeze out what equity you still can) or currently high interest rates, because in the long run, it will all work out and you will see those amazing returns that real estate has historically shown.

Chris Davidson · Answer

@Aaron Akins going on the premise you believe values will drop and you can split the difference and pocket a little money I think you are taking on more risk than possible reward. If values and rates don't drop you sell and can buy less in a year or two. If values drop and rates don't it will come down to numbers on if you made a good decision. If both drop you win, but one of three of those is a clear win.

Instead if you believe this will happen you can hedge your bet with little money down. Go take out at least 2 year HELOC lock in your equity position have the capital available. If the market conditions you are betting on happen buy, and rent out one of the houses and ride the wave until values return. If your premise doesn't happen you spent closing cost on a HELOC values went up or stayed flat and you didn't have to draw on the HELOC. If it does happen buy another house, use the HELOC house as a rental and enjoy those rising rental rates while you picked up a "cheaper" house.

There is more than two sides to a coin. Play slow and smart limit down side in increase upside. If you want to dive deeper or meet up for coffee shoot me a DM.

As to the article I think the best part is the last paragraph where the FED is worried about inflation. Everyone is, but I haven't seen a time when inflation came and prices dropped on average goods. Luxury possibly but median homes values dropping YoY while inflation goes high doesn't seem like a feasible long term condition to me. I think we are seeing the opposite of the rate rush we saw early this year late last year and things will stabilize when people begin to accept these rates are now the norm.