Idaho

Last week, the Boise, Idaho real estate market was named by national press as one of the metro market areas most likely to see significant home price appreciation in 2012. In my opinion, this is largely due to what is going on currently with our housing supply market. From February-December of 2011, Boise saw a 50% drop in our number of available homes for sale. This came on the heels of 6 straight years of declining new construction sales, and 3 years of foreclosures pushing home sales to rock bottom. The ultra low, foreclosure-fueled prices not only discouraged many existing homeowners from listing their homes, but also caused a bit of a buying spree amongst those with available capital to purchase homes. Now the foreclosure supply is dwindling, showing a 60% drop in the last year, and our overall housing inventory is nearing a record low. What does this mean? It means that 2012 will, just as the national press predicted, more than likely see an increase in housing prices as buyers compete for the relatively low available supply. So, if you're one who has been waiting to put your home on the market until prices started to recover...this could be your year!

It is a sad day in Boise today because Micron CEO Steve Appleton was killed in a plane crash this morning shortly after takeoff at the Boise Airport.

He was flying his experimental single engine Lancair which crashed around 9 a.m February 3, 2012. He was the only person onboard and was in contact with the radio tower requesting permission to turn around.

Steve Appleton done a lot for Boise since he graduated from BSU on a tennis scholarship. Micron has been a huge factor in the Boise economy. Shares of their stock were halted on the news.

Steve was fortunate to have survived a previous plane crash in 2004, but wasn’t so fortunate this time. Idaho lost another great pilot back in August of 2011 with the passing of Greg Poe.

Those two are probably already up in heaven doing stunts in the planes above the clouds.

What a grand experience I had first-hand this week at the KROC Center in Coeur d’Alene Idaho. Our company, Keller Williams Realty Coeur d’Alene, had their annual Vision Meeting breakfast at the KROC center. The meeting area for our breakfast consisted of three interconnected rooms (the River, Osprey & Cedar) merged into a single large meeting area. The resulting comfortable and roomy area was arranged with ample space with crisp tablecloths on the tables.

The breakfast (catered by the Kroc Center) was served buffet style. We had scrambled eggs, a wonderful potato dish (there were 4 or 5 different kinds of potatoes), bacon, sausage, biscuits & gravy and lots of fresh fruit. It was a very nice breakfast.

But back to the meeting rooms, there three large viewing screens strategically arranged to provide visibility from anywhere in the room. So it didn’t matter where you sat, you never missed a thing; the sound was excellent and like I said before, you could move easily between the tables without bumping into others.

The crowning touch was knowing that the fees associated with renting the facilities flows directly back into the community.

As REALTORS® in most parts of the country would know, the completion of home sales are strongest in the late spring and summer months as compared to the winter months. January and February are two months with the lowest number of home sale closings because few buyers shop for homes between Thanksgiving and the New Year.

The below graph clearly illustrates the seasonal trend of total completed sales. The peak months can see as much as twice the sales activity seen during the weak months.

The data frequently reported in the media and as reported by NAR for monthly sales is not the raw count of sales but seasonally adjusted figures. That is how all economic data are reported. It would be foolish and not meaningful to say sales are tumbling or jobs in beach towns collapsed in December, if in fact it is a very normal seasonal pattern. And the seasonally adjusted data has been showing a slight improving trend in home sales this past November and December.

Still, from the homeowners’ and practitioners’ points of view, the seasonally adjusted data do not necessarily mean an easy home sale or a higher commission income in winters’ months.

Here’s a USA Today article on how to sell a home in winter. You may not agree with all of these suggestions and/or you may have your own special method.

NAR Home Sales Data Can Put the Market in Perspective

Note: This is the first part of a three-part series. Part two will be posted on February 7th, 2012.

Introduction
Concerns about existing home sales, prices, and trends splashed across the national media can be overwhelming to the potential buyer. Buying a house is a big, important decision—and Realtors® have been mentioning that some buyers are reluctant to take the plunge because of all the negative publicity. Taking a tip from Dragnet’s Joe Friday, “All we want are the facts…,” NAR’s Existing Home Sales (EHS) statistics can show the facts.

• NAR’s national numbers for the housing market can show the potential buyer the overall, summary market trends.
• Since all real estate is local, the Realtor® can graph their local area sales and price information next to the national numbers—putting the local market into context. The objective is to give the potential buyer confidence in where the local market is headed and an understanding that the national data may be good or bad, but the local expert—the Realtor®–can help in understanding the home purchase.

This is the first of three articles discussing the use of sales, price, and inventory data. Taken together, the data at the national and local levels should provide the potential buyer an improved view of the market in order to make a realistic offer.

Home Sales—Actual and Trends
Monthly home sales fluctuate—causing the media and the potential buyer—to think of the home sales markets as uncertain or on a rollercoaster. However, a review of underlying market trends based on 6 and 12 month rolls (1) currently shows a home sales market that has been reasonably stable over the past four years. The Existing Home Sales market has fluctuated in recent years in a sales range somewhat above 4 million homes.

Home sales are strongly dependent on jobs. No one can guarantee the outlook—but the economic recovery is expected to generate additional jobs. In presenting information to a potential buyer, a graph of local sales coupled with the national information—both on a rolling basis and a month-by-month basis—puts overall sales trends and market performance in context.

On a monthly basis home sales appear to be gyrating and possibly declining.

However, considered on a four year basis—the current market for home sales as a rolling average are actually reasonably stable.

What Does This Mean To Realtors®?
The market overview based on a four year trend of sales appears to have been steady at the national level. Of course, all real estate is local. That is why a juxtaposition of local sales numbers with the national numbers can build confidence in where the market is headed—whether up or down. Both monthly and 12 month rolling data are relevant.

1. A 12 month roll is the sum of sales in the past 12 months; the roll generally will have a different value each month as one month of data is added and one month of data leaves. This makes the 12 month roll a trend line.