2019 Idaho Real Estate Blog

The next evolution of Idaho Real estate and new homes for sale- Main Idaho Real Estate Insights
Idaho Real Estate is shifting again- I am making a prediction.

The problem we are recovering from was demand increased so dramatically it drove appreciation to an unsustainable level. In the interim developers were creating new communities to meet the demand and buidlers were aligning themselves with lots so they were not locked out of the market.

One of the popular marketing trends in 2005 was builder teams. Subdivisions were exclusive to certain builders and the consumer was forced to select a builder from the building team. Recently, due to real estate market conditions many lots became avaialble and no one was buying lots including builders because there was no demand and builder teams disappeared.

My prediction is the next shift is going to be builder teams again. As builders are able to purchase lots at prices less than they could develop lots for, they are going to start locking up lots again. It is already happening. I know of several builders that are using bulk lot prices to create a competitive edge. The price and value they can build for compared to otheres who are buying one lot at a time is thousands of dollars difference.

For a while at least we are going to see subdivisions that are good subdivisions but fallen to market conditions, being acquired by larger builders who can afford to lock themselves into great lot prices.

This will be a great opportunity for the consumer who wants a new home but can't afford a premium lot price. These builders will be a ble to build at prioes that compete with distressed property as well.

Dream big in 2009,

Trey Langford
Founder

 
Posted by tlangford at 8/30/2009 10:29:00 PM
Comments (1)
Re:The next evolution of Idaho Real estate and new homes for sale-
I agree but I think those buying lots and holding are years early.

Anyone who looks at real estate history knows it never bounces back quickly. I think I have convinced you we had a big bubble and a quick look at how RE bubbles played out in Cali, Fl, Japan etc shows a big dump fallowed by a slow bleed for 10 years.

Detroit is actually a interesting model, (a bit extreme but..) they have experience with a huge supply demand imbalance and have had home price less then lot development for some time. Run a search on Detroit homes under $50K.

While we are not Detroit we have a huge supply problem still. Not just with listed inventory but bank owned shadow inventory and owers just waiting for the 'turn'. If you do n't believe me look at rental rates and vacancy...there is little demand for housing. I would love to plot residential sq ft versus the population because I think you would clearly see us 20-25% higher than a normal period.

Heres my prediction:
Home and rental occupancy rates in TV continue to fall for 2 years
Pricies are flat thru fall and then decline again at a slow rate for the next 4 years and stay flat (decline in real terms) for 6 years
Unemployment increases thru 2010 and Boise breaks 10% by year end
Mcmansion subdivisions which were built in the last 4 years increasingly decline, with more crime, high vacancy,
Increasingly demand grows best in near city and rural areas with people either wanting to be close to jobs or be self suficient/away from city problems...suburbs struggle and especially large houses which cost too much to maintain
Boise inmigration slows as jobs are as few as other places and coastal migration seeks low cost areas as Boise has become less affordable and their costal equity is lower
Icreasingly homeowners rent rooms and kids stay home squeezing demand further while builders continue to build although at lower rates
Default rates of buyers from 2008 and 2009 'post bubble' are much higher than expected in the segment putting down less than 20% (most)

To me this is still time to deleverage personally (although I havent had debt in years) minimize expenses and preserve capital. Great bargins and fantastic returns await those with cash, however IMHO that time is not now.
Posted by on 8/31/2009 1:48 AM

Michelle Penick, Build Idaho Client Real Estate Services

Michelle Penick

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