Boise Idaho Real Estate Report- When will it be normal? Main Idaho Real Estate Insights
Welcome to our quarterly national, local, and home building and related industries economic analysis and forecast for Ada and Canyon Counties. This analysis is of the 1st quarter of 2010.

Idaho Real Estate Report

The 'Normalcy' Report

View Report including Charts, Analysis and conclusions

The normalcy report is a new type of economic analysis; one based on the normalcy theory of economics and normalcy index. This new theory and index increases the clarity with which CEO’s see the economic landscape over traditional methodologies. As a colleague of mine said, “its not going to endear the hearts of academia or economist, but it does tells us what traditional economic theory cannot, which is where the economy is relative to the new normal, what the new normal looks like, and how long it will most likely take to reach full normalcy.”

By knowing where the national and local economies are relative to normal, as well as, the key economic measures for a particular industry; business owners and CEO’s in that industry can make more accurate business projections, manage risk, and communicate to their partners, investors, lenders, and employees what’s really going on in their environment and what it means to them and the company.

The recovery has begun. This analysis indicates the national normalcy index is improving rapidly and now stands at 86.6% of normal. The Ada and Canyon county’s economies normalcy index is trending at 36% below normal. The homebuilding and related industries index for greater Treasure Valley is 50% of normal. The national economic normalcy index is projected to reach normalcy by the end of the 1st quarter of 2011 and full normalcy, by 2nd quarter of 2013. The local economy will trail these dates by one year. Homebuilding and related industries will achieve normalcy by the end of the 1st quarter of in 2014.

The Ada/Canyon County Homebuilding and Related Industries Normalcy Index is comprised of 21 key performance measures; six national, five local, and ten specific to the homebuilding industry. On the following page is the Ada/Canyon County Homebuilding and Related Industries Normalcy Index.

The recession has hit the homebuilding, banking and related businesses sectors of Ada and Canyon Counties economy’s harder than most. To help in the recovery, we will be providing this quarterly report free of charge to the owners, CEO’s, and industry leaders in homebuilding, land development, banking, and related businesses, until the market returns to normal.

The bottom line is the homebuilding and related industries sector of the Ada and Canyon county economies have two to three years of tough times to go. Yes, the future is exceptionally bright. In five to seven years there will be more demand than the industry can handle. Its true, nearly all of the key economic indicators have bottomed and most have improved, with the exception of foreclosures. The level of notices of default continue coming in a record levels. Although the latest declines in unemployment are encouraging several other key indicators remain at their all time worst levels.

That’s the bad news. The good news is even as bad as it is, and its bad, the homebuilding and related industries sector of the economy is still a $300,000,000 to $350,000,000 dollar a year industry in the Treasure Valley. Companies have had to reduce their workforces by 40% to 60% and wring every non-essential dime out of their operating budgets, but those who are able to realign their business models and adopt pro-active business development strategies, can and are cash flowing and in many cases making a profit.

The bottom line is the homebuilding sector of the Ada and Canyon County economies are trending at nearly 1,800 units and $350,000,000 in annualized revenue today. It will get better, but both economies together have lost over 24,000 jobs. It won’t be normal until the Ada and Canyon Counties add these jobs back and realistically this is two and half to three years from now.

Posted by tlangford at 5/12/2010 7:50:00 PM
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Comments (1)
Re:Boise Idaho Real Estate Report- When will it be normal?

The new normal???

Okay, nice use of public data in graphical form, but drawing artificial lines and calling it the new normal is not analysis.

Stock market new normal is here? PE, dividends all above historical trends...so new normal is overpriced?

same with oil, etc... I would disagree, but I dont even have a foundation to see how the normal was derived.

So I have a very open track record of calling things on this site since 2007 or so and I must say not to badly...

This is not the new normal...it is unsustainable...

more than 10% of GDP is now supported by gov borrowing, debt above 2007 levels...that is unsustainable...

Corporate risk has been transferred to soverign risk. We are all Greece. We are in for more deviation going forward NOT a new normal...

Debt growth will either result in massive future austerity and rapidly rising rates and capital or currency debasing moves which will drive commodities like oil violently

and the whole world is in on this ponzi scheme. Watch Greece ...the euro and the dramatic pain. Even if we delay following course, the interum will be dollar ampreciation with slowing imports...

okay enough babble. NO NEW NORMAL...I dont buy it

Will homes be built, etc-- yes, but I would not bank on this analysis
Posted by on 5/12/2010 10:18 PM

Samantha Dunn, Idaho Real Estate Agent

Samantha Dunn



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