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There are fewer houses for sale than a year ago, so it's a seller's market for now Main Idaho Real Estate Insights
Joe Estrella
The Idaho Statesman
Joe Estrella>

The Idaho Statesman | Edition Date: 02-12-2006

There are far fewer homes for sale in the Treasure Valley now than there were a year ago, and real estate experts say that's a formula for continued increases in home prices.

But new statistics show some 284 new housing subdivisions representing more than 30,000 future single-family home sites are currently in the regulatory pipeline throughout the Treasure Valley, promising relief from higher prices for developers and consumers.

According to Intermountain Multiple Listing Service statistics cited by Boise real estate broker R. Gail Heist during the recent Franklin Building Supply Annual Economic Forecast, Ada and Canyon counties had a combined 1,559 new and used homes for sale on New Year's Day 2006 41 percent fewer than on the same day in 2005.

The lower inventory of existing homes will keep home prices trending upwards at least for now, Heist said.

"As long as we continue on this current growth pattern of new business and population, and with fewer houses in inventory, the upward pressure for home appreciation will continue," Heist said.

According to BuildingCredibility.com, a new Web site under development at the Boise State University TECenter in Nampa, there were 20,354 lots recorded in Ada County and another 9,733 lots in the pipeline in Canyon County at the end of 2005.

And the numbers keep increasing.

The Community Planning Association of Southwest Idaho reports that as of last month 24,091 lots had received preliminary approval in Ada County alone. Those lots sit on 12,447 acres of land, the equivalent of 19 square miles, or roughly the size of the city of Eagle.

That figure does not include an undetermined number of lots in Ada County that have not reached the preliminary approval stage yet, or the 8,286 lots green-lighted in 2005.

"The number of lots approved last year is miniscule compared to what's in the pipeline right now," says COMPASS planner Nicole Prehoda.

COMPASS' most recent figures indicate there were 9,733 lots awaiting approval in Canyon County as of Aug. 31, compared with the 3,078 lots approved during all of 2004.

Observers predict thousands of lots will begin showing up on the market by mid-year, setting off a chain of events that will benefit both developers and consumers.

Developers will have more options from which to chose, helping to slow skyrocketing construction costs that have sent area home prices soaring.

That, they say, will keep Southwest Idaho from suffering the same fate as overheated real estate markets like California and Nevada, where many consumers can't afford to buy a home.

"Those lots will bring a leveling off, not a downturn in the market," said Thomas Fassino, development analyst with Kastera Homes in Eagle. "And that means sustainable growth."

Other developers agree that home costs in the Treasure Valley can't continue to climb at the same rate they did in 2005, when housing appreciation rates in Ada and Canyon counties rose 17 percent and 21 percent, respectively.

"That supply of new lots needs to hit the market, because incomes are not going up that fast. At this rate we'll run out of buyers," said Don Hubble, owner of Hubble Homes,. His company recently paid $165,000 an acre for land in north Meridian that had been appraised for $125,000. Hubble said the land would have sold for $65,000 an acre a year ago.

At $165,000 an acre, three homes built on that ground immediately cost $55,000 apiece, before infrastructure and building costs are added.

The Office of Federal Housing Enterprise Oversight recently reported that in the third quarter of 2005, Idaho was 12th in the nation in terms of housing appreciation rates at 9.38 percent.

But despite operating in one of the hottest real estate markets in the nation, Hubble says current land costs mean that his company will only build 860 new homes this year, an increase of just 15 percent over 2005.

"If we had more lots available, we'd build more homes," he said.

If enough lots come on the market soon, landowners will no longer be able to demand a premium for their property, and in some cases "would have to bring their asking price down," Hubble added.

"If it's a choice between $165,000 an acre, and going down the road and paying $125,000 an acre, that's an easy decision," Hubble said.

Fewer homes, higher prices

Some of the areas with dramatic decreases in housing inventories included:

Northwest Meridian, where the 247 homes for sale at the start of 2006 was 41 percent less than on Jan. 1, 2005.

West Boise, where there were 32 homes for sale at the start of 2006, compared with 89 a year earlier, for a drop of 64 percent.

Kuna, where 45 homes were on the market last month 63 percent fewer than at the beginning of 2005.

Nampa, where 253 listings on Jan. 1 represented a 55 percent decrease from 12 months earlier.

The largest draw-down in housing inventory in the Valley was a decline of 69 percent in extreme northeast Nampa, where there were 50 homes up for sale at the start of 2006, compared with 162 a year earlier.

Nampa home prices, which have made the area attractive to consumers unable to find affordable housing in Boise or Meridian, don't need the additional price pressure that comes with a shrinking housing inventory, said one area real estate observer.

"If you didn't buy last year, you're in big, fat trouble," said Coldwell Banker real estate agent Dorie Wick. "I had two houses sell last year for about $116,000 and $118,000, which are now selling for anywhere from $158,000 to $170,000. It's like Boise, where five years ago you could sell houses for $115,000 all day long. That market is gone."

Wick said the people currently at risk are first-time homeowners and the 20-year-old couples just starting out and searching for an affordable home.

"I'm wondering if we're going to have those first-time buyers anymore," she says.

Small businesses add price pressure

Heist said many of the homes purchased in recent years were the result of as many as 20 new small businesses relocating to the Treasure Valley each month during that time, each bringing three or four families with it.

Among those small businesses was Vision First LLC, a real estate land development company formerly based in Vancouver, Wash., that relocated to Eagle in 2003.

"We wanted to be in a more central location for the intermountain region, and we thought Boise was going to be an area of tremendous growth for the next 10 to 20 years," said company president Randy Clarno.

Clarno said his business brought eight new families to Idaho since 2003.

"They all love it here, and they all purchased homes," he said. "And they're telling other family members, who are also moving here."

 
Posted by tlangford at 1/6/2015 2:30:00 PM
 Tags: Boise Idaho
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