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Mike Turner

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What Impact are Foreclosure Starts having on the Boise Housing Market?

03-01-12
Mike Turner
A foreclosure start occurs when a homeowner falls 3-4 months behind in their mortgage payment, and the mortgage company files a notice with the county. Starts don't always end in foreclosure, but they're a good indicator of how many foreclosures will eventually end up on the market. Boise foreclosure starts dropped sharply compared to the national average--down 34% from 2010 to 2011. That still leaves us at a level nearly double what it was before the 2007 market crash, but also represents steady, healthy recovery. And where are the foreclosures happening? 87% of them are on properties priced below $200,000, and 75% on properties below $160,000. These include shorts sales, bank-owned properties, homes slated for auction, and HUD-owned houses. These still account for over half of the monthly home sales on average. However, foreclosures in such a low price range have created an entire under $100,000 market that simply didn't exist in Boise 7-8 years ago. With that much action happening in smaller numbers, the median house price of all homes was bound to get pulled down. These extremely low-priced homes are being bought up rapidly. The inventory of foreclosure starts has dropped 71% in Ada County and 81% in neighboring Canyon County. As we continue to purge the lowest price homes and work through these necessary steps--including foreclosures and their subsequent purchases--we will see home prices begin to rise slowly but steadily again in 2012.
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Boise Real Estate Market Update: 2012 New Construction Rebound

02-14-12
Mike Turner
2012 is shaping up to be a big rebound year for new construction home sales in Boise, as evidenced already in the 29% median price increase over the last 18 months. Why this increase is in part due to the price raise in building costs, there are more factors at work. 1. The tax credit which was offered in February-June of 2010 was a huge price influence. It encouraged a lot of consumers, most of them first-time home buyers, to purchase a large group of homes in the lowest price range ("starter" homes), therefore driving down the overall median home price. The You Tube chart shows how the market price corrected itself after the credit expired, and how prices have continued to steadily climb afterwards as the buyer pool for new homes now consists of more move up- and higher end-home consumers. 2. The number of building permits applied for in Ada County hasn't been this low since 1988 meaning there aren't many new, unoccupied homes ("spec" homes) available. That, coupled with already low existing home inventory, creates a scenario where buyers with little to select from will likely choose to build instead. 3. The number of builders currently working in the Boise area is down 75% wince the housing bubble of the mid-00's, with only about 150 active. More new home demands will greatly benefit these active builders and hopefully get more back up and running, and creating jobs. In short, home supply has been decreasing for the last six years while home demand has been increasing for the last three, creating a gap that looks like 2012 and new construction are perfectly poised to close.
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Boise Housing Market Update: 2012 Looks Hopeful to be the Year of the Comeback

02-08-12
Mike Turner
The last of the 2011 data for Boise’s real estate market keeps rolling in, and for the most part things are looking up in the Treasure Valley. Recently I mentioned how Boise, Idaho was in the national spotlight, named as one of the few U.S. metro areas that should see a home prices increase in excess of 4% percent this year. Economists might actually be right on this prediction as the year over year home price data actually shows Boise up 3% already in January. I’m adding my prediction that market bottom for Boise will be named Jan or Apr of 2011--nearly a year behind us. So, at least we are off to a good start. Other good news from the 2011 data shows home sales are already up 13% year to date, and pending home sales are up 17%--reflective of the growing demand for Boise area homes. Another bright spot is new construction pending sales are up 54% compared to Jan of 2011. This is probably the statistic I am most excited about since an increase in new home sales means more jobs for local contractors. However, what is really setting the Boise market apart from other cities across the nation is our extremely low inventory of available homes for sale--a number that keeps shrinking. Currently, Ada County’s supply of homes for sale is down 61% since the peak. Similarly, Canyon County is down 68%, which means 2/3rds of the market has been bought up. Buyers are scrambling to get to what is left of the lower-priced homes, aware that this “comeback year” may just be the end of the buyer’s market we’ve had over the last several years.
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Boise Real Estate Market Update: Housing Inventory at Record Low

02-03-12
Mike Turner
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!
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National Report Projects Boise Housing Market to Rebound

01-31-12
Mike Turner
On Monday, January 30th 2012, FISERV Case-Shiller Home Price Index reported U.S. home prices will fall another 2.7% by the 3rd quarter of 2012, but will rise in 2013 by 3.8%. The CEO of FISERV, David Stiff, said that out of the 380 metro areas analyzed they are projecting a few places to actually see a 4-6% increase in home prices for 2012. Boise, Idaho was named specifically as one of those markets. Excited by this news I went to the FISERV website and found that they are currently projecting Boise, Idaho to see home prices increase 5.9% by the 2nd Quarter of 2012, and rise 7.6% in 2013. Other regional cities don’t have such a rosy outlook. FISERV predicts both Phoenix and Las Vegas will drop over 10% by the second quarter of 2012. So why is Boise projected to rebound so much better than most US cities in 2012? No doubt the prediction is based on Boise being one of the few Metro areas in the nation experiencing increased home buyer demand coupled with historic lows in number of homes listed for sale. Even with a relatively high percentage of foreclosures still on the market, the low overall inventory of homes for sale is inching home prices up as buyers compete for the best deals. These positive housing projections for Boise Idaho reflect what local analysts at Front Street Brokers are forecasting as well--stating that in addition to increasing demand and shrinking supply, Boise is also experiencing above average population growth and an unemployment drop below the national average. All this positive attention for Boise Housing Market might just mean an early spring in Boise after all.
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