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Boise Idaho Real Estate Market Lessons forgotten

Main Idaho Real Estate Insights
After the market crashed, Boise Idaho Real Estate analysts noted several issues that had happened as the market ramped up that were unsustainable. Three years later, we have forgotten what we learned

Boise Idaho Real Estate Perspective

Real Estate is a moving target and one of the things that complicates it is that there are so many players. There are thousand of real estate agents, hundreds of builders and dozens of deveopers, each acting as its own entity. As the market crashed, industry professionals talked about what had gone wrong. While this is a thesis in itself, for the purpose of this post, we will focus on three

  1. Price of homes had reached unaffordable levels. The average price of a home had risen too far above what average wages could afford so something was going to have to give.
  2. We were building more than we needed. While builders were building as fast as they could to meet demand, the real # of people who were buying homes to live in them smaller than the investoer #'s.
  3. The third lesson was that we did not need to build McMansions or starter castles. People discussed how we needed to right size homes so that affordability and livability increased.

I wonder if we have already forgotten those lessons? New construction sales are ramping up quickly again and the land grab is in full swing. as a matter of fact, smaller buidlers are getting squeezed out.

Home values are on the rise. With demand increasing rapidly, suppliers and service providers are increasing their pricing plus lot prices are increasing, which has made homes more expensive. Here is an interesting perspective- Have you read over the last three months how Boise has been recognized as one  of the best real estate recovery towns? Do you know what that means? It means that prices are going up.

Demand is on the rise. Builders only try to build to demand but currently, as homes come to market, if they meet home buyer expectations, they are purchased very quickly and with full price offers or better. Currently there is not a scurry of investors buying home to resell but if the flurry of activity continues, we coudl see investors get back into the market. One lesson that builders should have learned last time is that investors hurt their business.

The third lesson that I find interesting was how big homes had gotten and how "we" decided that homes did not need to be so big. Yet, today I would say we are building them big again. If you visit the Boise Idaho Parade of Homes starting this weekend, you will see that new construction is building them  as big as they can, to some extent.

What do you see happening in the market?

 
Posted by tlangford at 5/2/2012 10:19:00 AM

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