Repoman brings you the best buys in Boise Idaho homes & real estate

Dans Market Monitor- Boise Idaho Areas

     
Treasure Valley Housing Market Update For July 1st, 2010  
 
In a normal market, supply & demand and levels of foreclosures and new construction play a large role in the rise & fall of home prices. With formerly record short sales and now record foreclosed home inventory in the Boise area, plus the artificial and temporary effects of the tax credit, this market has been anything but normal for the last 5 years, including the frenzy before the boom ended. We all know that home prices will rise again, but it will take time. I know this is not good news for my fellow property owners. The best news I can offer is- this may be the bottom, but for buyers- it is a GREAT time to buy! 

Median Home Prices By County

Boise home prices are at the lowest level in over 5 years. The median price in Ada County was stable in the first quarter, but has continued to slide in the second quarter, dropping another $10,000. 

Canyon County median prices dropped $5,000 in the first quarter and $1,000 in the second.

Be careful applying median prices to any particular home- some have fallen more than others, especially in higher price ranges, skewing medians. 

Monthly Solds By County



Looking backward at solds, the effects of the tax credit are already waning. The best forward-looking indicator, pending homes, have fallen 43% from April to June in the Treasure Valley.

New Construction Levels in Boise Area

After the boom, bubbles of unsold new homes contributed to price weakness in the Boise area, but have diminished.  Builder confidence has been low, evidenced by steadily falling production. The lengthy development process means slow builder reaction to the market.  This can help drive appreciation in an upturn. 


Tables based on MLS active listings on the first day of month and includes only new stick-built single-family homes listed new-never-occupied, under constr or to-be-built. Excluded from this table are new homes with acreage, new condos, new townhouses and all new manufactured homes.      

Foreclosure Saturation in Boise Idaho Metro Area 

I am still seeing pages and pages of default notices in the local paper. We see those defaults in housing markets first as short sales, then foreclosed homes. As of July 1st, short sales represent 28.3% of all homes listed for sale, falling slightly from the month before and for the 3rd time this year.  The percentage is not as bad as it sounds, since a third of the short sales showing active have offers- see the next charts below. 

Short sale sellers are racing the clock to avoid foreclosure and are often priced well below market for fast liquidation. These fire-sale asking prices affect buyer's perceptions, but may not be real, since the lienholders must approve the sale and most counter higher when ready.  

Bank-owned foreclosed homes, also known as REO's, now represent 10.94% of all homes listed in the Boise-Nampa Metro, up from 9.87% in May. REOs are systematically reduced until sold as-is and have been selling for a large discount.  

 
 


The Fundamentals of Real Estate Values- Supply & Demand

Pending homes are a leading indicator on the market. Homes under contract represent next month's sales. Supply is expressed in months to sell inventory at current pace. According to NAR, a 6-month supply is a balanced market.
 Inventory  1-2 months  3-4 months  5-6 months 7-8 months  9-10 months 
 Price Variance  double-digit appreciation  single-digit appreciation stable   singe-digit depreciation double-digit depreciation 

 

There's no mistaking the effects of the tax credit here!  As I expected, we're seeing a spike in supply similar to last December, which is a little disconcerting in mid-summer.  The tax credit simply delayed the inevitable market trend.  
 
This table covers all single-family homes in the Boise-Nampa Metro, new & existing, including stick-built, homes with acreage, condos, townhomes, manufactured homes on rented lots and with land in the MLS on the first day of the month.
 
 
 

Ada County, Idaho 

Including the cities of Boise, Meridian, Eagle, Star & Kuna, here's an overview of the supply & demand balance in the county: Active, Pending and Supply (number of active divided by number pending equals supply in months). 



Boise, Idaho

The Boise home market, always the strongest in the valley, will be the first place we see appreciation in home prices. Boise finished the first quarter strong after a weak start, but the trend has slowed now that the tax credit has expired. The number of foreclosures in Boise has grown in the 2nd quarter, but remains near the lowest percentage of foreclosures in the valley.  With prices at 5-year lows, low overall supply and diminishing defaults, a little bump in demand from in-movers would get the ball rolling. 
 

These tables cover all single-family homes, new & existing, including stick-built homes, homes with acreage, condos, townhouses, manufactured homes on rented lots and manufactured homes with land in the MLS on the first day of each month.   

Meridian, Idaho 

Perfectly located in the path of growth and aptly named in the center of the valley's population, Meridian has a very bright future. Supply is way down, but over 40% of all listings are short sales or REOs.  It will take some time for prices to rise, but I would not make the same bet on interest rates. If you are considering buying or investing in Meridian, now is the time. 

 


 

Eagle, Idaho 

 Eagle is showing remakarbly stable supply, after a tumultous few years.  Eagle is one of the higher-priced areas in the Treasure Valley and low rates and great deals are attracting buyers.  There are many luxury homes in Eagle priced below what it would cost to build and at a fraction of previous values! 

 

Star, Idaho 

Star looks great based on supply near boom levels, but over 43% of all homes listed are short sales or REOs.  Prices are way down and the deal are good on big beautiful move-up homes.     



Kuna, Idaho 

Kuna has many starter homes and supply has plummeted due to the tax credit. The percentage of foreclosed homes to all listings in Kuna is only 6.4%, the lowest in the valley by far. The number of short sales has also been falling.  I am hopefully optimistic about Kuna, being one of the lowest priced areas in Ada County.  I also own a rental there- so maybe I'm biased. 

 
 
 


Canyon County, Idaho

I'm not sure the recovery has started in Canyon County yet. The median existing home price is still falling and the percentage of foreclosures is still rising. Nearly 44% of all homes listed are short sales or REOs, with REOs making up nearly 12% of all homes listed. The tax credit expiring has sent the market in the opposite direction with rising supply and slowing sales.


This table is based on MLS data on the first day of each month and includes all new & existing single-family homes, including stick-built homes, homes with acreage, condos, townhouses, manufactured homes on rented lots and with land.


Nampa, Idaho 

With Nampa's low home prices, the tax credit really heated-up sales here, but you can see the trend has reversed. Nampa has the highest percentage of foreclosures in the county. Now over 46% of all listings are short sale or REO. If you can't wait 4-6 months on a short sale, then check out the plentiful REOs, now over 11% of all listings. 

 


 

Caldwell, Idaho 

Caldwell, home of the most affordable prices in the Boise metro. With super-low supply, prices should be climbing, but for high percentages of short sales/REO, now nearly 44.5% of all homes listed. You can find positive cash flow here on newer homes as rentals.


 

Middleton, Idaho 

Home prices in Middleton got out of hand during the boom, but being farthest out from Boise, were the last to rise and will be last to feel the recovery in home prices. The good news is- supply is low again.  The stage is set for recovery.  All we need is increased demand and jobs. 




Thanks for your interest. Yes, this is all my work.  I serve the following areas for real estate for sale including homes, condos, townhouses, manufactured, acreage, land, lots, horse property, luxury homes, executive homes: Boise, Meridian, Eagle, Star, Kuna, Nampa, Caldwell, Middleton, Mountain Home, Idaho City, Horseshoe Bend, Emmett, New Plymouth, Fruitland, Payette, Weiser, Homedale, Marsing, Melba, Bowmont, Ada County, Canyon County, Gem County, Treasure Valley, Southwest Idaho.

Dan Rowe ABR CRS GRI   (208) 866-3481